(4 years, 4 months ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
The Chief Secretary to the Treasury (Steve Barclay)
I beg to move,
That this House has considered the economy.
It is a privilege to open this economic debate, and to do so hot on the heels of a statement from the Chancellor that places the Government’s plan for jobs at the heart of our recovery. The past few months have tested our economy in a way that few of us, if any, have experienced before. Never in our history have a Government ordered businesses across the country to close for an extended period, and never have a Government asked so many people to halt normal activity so completely. Shops closed, offices emptied and productions lines juddered to a halt as millions worked from home.
From the onset of this pandemic, the Government worked to ensure that our frontline public services would get whatever funds they needed. To date, £49 billion has gone towards the NHS, local authorities and others working to protect us from the virus, but our public servants were not alone in that endeavour. The very fact that so many of working age were willing to stay at home, protect the NHS and save lives is a sign of the cohesion and compassion that still exists within our society.
Chris Bryant (Rhondda) (Lab)
If the Minister does not mind me being a bit cheeky, I want to ask about the money that we need in the Rhondda to deal with the floods earlier this year. Some £67 million is needed by my local authority. Half of a tip fell into the river, and £2.5 million is needed to take away the 60,000 tonnes and to make the tip safe for the future. It is vital that the Government recognise that the Coal Authority is a Westminster responsibility, and the money must be found so that we can make people’s homes safe.
Steve Barclay
When it comes to speaking up for his constituents, I do not think the hon. Gentleman has ever held back, whether or not he is being cheeky in doing so. He raises a very important point about the investment in flood prevention. That is why the Chancellor set out a number of measures as part of the infrastructure package, and I will come on to say more—[Interruption]—if he allows me to get into my speech, about how we are accelerating a number of projects with that in mind. Given the history of coal and some of the tragedies that have happened in the past in Wales, we are very cognisant of the need to take action on such schemes. Again, that is being looked at by the Secretary of State for Wales, and I have been in discussions with him on that.
Let me now make some early progress. The Government were clear that we would stand by those whose livelihoods were in jeopardy through no fault of the own. We said we would do whatever it takes to protect and preserve the businesses and jobs on which our national prosperity and resilience ultimately depend, and we meant it. The House will be familiar with the scale and scope of our economic response, which has included business rates reliefs and grants for the worst-hit sectors, uplifts in welfare support for families struggling to make ends meet and more than £70 billion of business loans and guarantees approved to date. Meanwhile, the coronavirus job retention scheme and the self-employment income support scheme have preserved many millions of jobs and livelihoods across England, Scotland, Wales and Northern Ireland, demonstrating once again the shared strength and resilience we derive from our Union.
Steve Barclay
I know the hon. Gentleman is a passionate defender of the Union, and I give way on that point.
Jim Shannon
We are very much better together. The Minister and I know that, and everyone else in the House knows that as well, even my friends to my left.
One of the things that concerns me is the aerospace sector, and the manufacturing base in particular. We have the possibility of losing 600 jobs at Bombardier in Northern Ireland and some 45 jobs at Magellan, which is a smaller contractor in my constituency. Within this process—and I thank the Government for all the moneys they have made available—will there be extra help for the aerospace sector, particularly for small firms and for the apprentices in those small firms?
Steve Barclay
As the hon. Gentleman knows, the Chancellor addressed that issue in his statement earlier. Indeed, he wrote to the industry in March setting out the terms on which Government support would be offered, including the requirement for firms first to look at what support they could receive from their own commercial backers and shareholders. On individual firms, what discussions take place is a matter of commercial confidentiality, but the Chancellor indicated both his engagement in that issue and that of the Secretary of State for Transport.
All in all, the United Kingdom’s economic response to covid is one of the most comprehensive and generous of any Government’s in the world. The past few months have been hard for everyone, particularly the many families whose loved ones have lost their lives. But thanks to our collective grit and determination, the tide was turned and the infection rates fell, and we are now in a position to reopen our economy in a way that is safe to do.
John Redwood (Wokingham) (Con)
As one who thinks it is exactly right, as a one-off cost, to spend and cut taxes at the moment to promote economic recovery, I accept that we have to borrow to do that. When will we be getting some revised numbers on what the borrowing might amount to?
Steve Barclay
There are two issues within that. First, there are the revised numbers from the Office for Budget Responsibility, which has set a timescale for when it will set those out. Then there is the more substantive issue, as the Chancellor set out in his statement, of seeing the plan for jobs in the context of three phases. The medium-term recovery that we need will be set out in the autumn with the Budget and the comprehensive spending review. Again, that will be an important milestone in this three-phase approach.
Steve Barclay
I will make a little progress, and then I will happily give way to the hon. Lady.
These interventions have come at a considerable cost to the public finances, but I have no doubt that they were the right thing to do. The Bank of England, the OBR and other external forecasters have all highlighted that the cost to the economy would have been significantly higher were it not for the swift and decisive action that the Government have taken. Nevertheless, the pandemic has caused a profound shock to both the national and the global economy, the consequences of which will be felt by businesses and individuals for some time to come. Even as we step out of lockdown, a great deal of disruption and uncertainty remains. Many businesses have yet to reopen their doors. Up and down the country, people are worried about whether their jobs will be secure when they return to work.
Wera Hobhouse
Bath is an international spa city, and the wellbeing and beauty industry is very much part of our local economy. Some industries have been worse hit than others and unfairly treated, particularly the beauty industry. When will there be an announcement that the beauty and wellbeing industry is open for business again?
Steve Barclay
The hon. Lady highlights an extremely important sector, not least in terms of its profile. Many women work in that sector, and often those incomes are extremely important to their households as well. At Treasury oral questions yesterday the Chancellor expressed our desire to get those sectors up and running as quickly as possible. The hon. Lady will know that we have already taken significant steps to support them, not least through the £10,000 and £25,000 grants that were offered, which included many within the sectors that she highlights.
Today the Government made it clear that we are ready to take further action as necessary, just as we have done throughout this crisis. That is why the self-employed income support scheme will open for a second and final round of grants between 17 August and 19 October. Likewise, the job-retention scheme has been extended until the end of October, with new, more flexible terms to support people back to work. But with the best will in the world, no Government can reasonably save every single job in these circumstances; nor can the furlough scheme, successful as it has been, last indefinitely.
Lilian Greenwood (Nottingham South) (Lab)
Of course the Minister is right that the furlough scheme cannot continue forever. However—I listened to his response to the hon. Member for Bath (Wera Hobhouse) about the beauty sector—surely we need different approaches to the sectors that have been able to reopen and those that are currently still closed. Surely the sectors that are still unable to open, and potentially may not be able to open for quite some time, such as theatres, music venues and beauty therapists—a range of sectors—need something more flexible. Why has he not considered something more flexible with regard to the job-retention scheme?
Steve Barclay
We have been flexible. The hon. Lady mentioned theatres: we announced a package of £1.57 billion-worth of support as part of the flexibility of which she speaks. People also seem to ignore the fact that we are only halfway through the furlough scheme. It runs until October—we are four months in. The intention, as part of this second phase, is to reopen the economy, including these businesses. As the Chancellor set out, we do not think it is good for people to be away from the labour market for an extended period because skills atrophy, and that is not in their interests.
Steve Barclay
I will make a little progress and then of course come back to the hon. Lady.
Now is the time to move to the next step in our economic response. Later this autumn, the Government will deliver a Budget and spending review, but today we set out our plan for jobs. As the Chancellor said, this is not a time for ideology. We are driven by a belief in the nobility of work and the power of opportunity. Most of all, we are motivated by the desire to do what is right for the British people. Where jobs are at risk, we will work to protect them, and where jobs are needed, we will help to create them.
Steve Barclay
Given the hon. Lady’s persistence, I will, but then I will make some progress.
Emma Hardy
On the issue of protecting jobs, the Minister must be aware of the situation facing the caravan industry in Hull and the East Riding. We are asking—this is supported cross-party, by Conservative Members as well—for specific support to protect the caravan manufacturing industry in our area. All the industry is asking for is an additional four months of support to keep it going until spring. We know that more staycations will mean a boom in caravan sales. Will he please look at specific support for this vital industry?
Steve Barclay
Again, we have taken measures with specific support, as my right hon. Friend the Chancellor set out. That is why we are cutting VAT for campsites and the tourism sector from 20% to 5%. That is part of it, but as the Chancellor also said, if we extended as the hon. Lady suggests, others would say, “Another month, another month, another month”, and people would be away from the labour market for a long period, which would not be in their interests.
Karin Smyth (Bristol South) (Lab)
Bailey of Bristol in my constituency is a world-class manufacturer, and I totally echo the point made by my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) that these businesses are not talking about forever. They are clearly talking about getting through to the spring. That is not that long, and it is a big investment. Please will the right hon. Gentleman reconsider?
Steve Barclay
Again, this was covered extensively in the earlier debate. First, the furlough is already in place for an extremely long period, until October. That is eight months, and we are only halfway through it. Secondly, other measures are being put in place, including measures to incentivise employers to bring those on furlough back. It is not right that people should stay on furlough for an extended period of time—[Interruption.] Nor have the Opposition set out exactly which sectors they want it extended for, or how that would apply in areas such as the supply chain. We would simply get an indefinite period in which that scheme would be —[Interruption.]
Madam Deputy Speaker (Dame Rosie Winterton)
Order. The hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) has made her point. Yelling at the Minister is probably not quite the way to proceed.
Steve Barclay
Thank you, Madam Deputy Speaker.
We will also ensure that those who have sadly lost their jobs are supported back into work as quickly as possible. We will do that by expanding work search and doubling the number of work coaches, so that jobseekers will benefit from high-quality personalised one-to-one support. We will also invest £32 million of new funding over two years to expand the National Careers Service, and we will prioritise support for young people who have not only had to contend with disruption to their education but must now enter the workforce at an extremely difficult moment. The £2 billion kick-start scheme will create hundreds of thousands of new fully subsidised quality jobs for young people aged 16 to 24 who are claiming universal credit and are at the highest risk of long-term unemployment.
There will be new money to invest in schools in England, including tripling the number of sector-based work academy placements and traineeships, and giving all 18 and 19-year-olds the opportunity to study targeted high-value level 2 or 3 courses when no employment opportunities are forthcoming. Furthermore, we will introduce a new youth offer for young people on universal credit, in the form of 13 weeks of intensive support, including referral to work-related training or apprenticeships together with tailored support and coaching for those who need it.
The Government’s immediate focus is on jobs, but our recovery is also an opportunity to renew our commitment to the UK’s long-term prosperity. Six months ago the Government were returned to office by an electorate tired and frustrated by deadlock and delay. Thousands of people in dozens of constituencies lent the Conservative party their vote for the first time because we promised to leave the European Union, unleash the potential of the economy and level up investment and opportunity across the United Kingdom. Those commitments have not changed, and this Government are determined to repay the trust placed in us by bringing about meaningful change to people’s lives.
Last week, the Prime Minister outlined how the United Kingdom could bounce back from this crisis, stronger and better than before, with new jobs and new industries in every region. Together with the plans set out by my right hon. Friend the Chancellor today, this means we will bring forward £8.6 billion of capital investment in infrastructure projects that will support thousands of jobs. That includes more than £1.5 billion for hospital upgrades and maintenance this year, and as the Prime Minister announced last week, we will allocate £1 billion to begin rebuilding schools in England, £142 million to modernise courtrooms and £83 million to invest in the prison estate. Meanwhile, we are working to put in place a new generation of roads, railways and fibre-optic cables to bind the country closer together and unleash the economic potential of the regions.
Tim Farron (Westmorland and Lonsdale) (LD)
It is important that the right hon. Gentleman’s focus is on jobs. Will he reflect on the fact that the hospitality and tourism industry—the fourth biggest employer in the country and the biggest employer in Cumbria—is now effectively in the middle of three winters in a row? The VAT cut is very welcome. However, 69% of hospitality businesses are not able to open fully, so, with goods and services that they cannot trade, they will get no benefit whatsoever from a tax cut. Does he agree that it is therefore right to invest in a wages and grant package to see the industry through to spring next year, so that it can come out fighting once the demand returns?
Steve Barclay
It is to address that exact reason that the Chancellor did not simply announce a VAT cut to help that sector. It is also why the eat out to help out programme is particularly targeted. Demand is key to those businesses being able to restart and take back people who are furloughed. It is predominantly and disproportionately the young who are most affected within that sector, and that is why the measures are targeted to help those who would have been most scarred economically if they lost their jobs at the start of their career.
The commitment to levelling up across the regions, including in Cumbria—in a way I am sure the hon. Gentleman, who is a proponent of localism, would support—is not just about the big-ticket projects such as High Speed 2 and Northern Powerhouse Rail, important though those are. It is every bit as much about numerous smaller-scale projects: the trunk roads, the local bus services, the flood defences—projects that rarely make national headlines but are every bit as transformative at a local level. That is why the Government have announced more than £100 million for local road upgrades. It means that we can proceed with much-needed bridge repairs in Sandwell, we can set about upgrading the A15 in the Humber region, and we can provide £10 million to support tackling bottlenecks in the Manchester rail network to bring about a faster, more reliable journey for thousands of passengers.
Our commitment to levelling up is directly linked to another of the Government’s totemic ambitions—that of achieving net zero carbon emissions by 2050.
Steve Barclay
I can anticipate the intervention and I will make a little progress first. Over the past 30 years, the United Kingdom has reduced its carbon emissions by more than 40%, but now the time has come to accelerate our efforts—and I am sure the hon. Lady agrees at least on that point.
Caroline Lucas
Yes, I would love him to accelerate his efforts, but the truth is that the £3 billion earmarked for green recovery is dwarfed by ongoing Government funding for fossil fuels, whether it is the £27 billion road-building scheme or blank cheque bail-outs for aviation, so does he agree that we should have not one penny more spent on propping up the fossil fuel economy, not just for climate reasons, but because investment in the green economy has a much higher return on investment and is much more labour-intensive?
Steve Barclay
I fear that that is almost the same question that the hon. Lady put to the Chancellor earlier. I know that she and I will disagree on the commitment we have to the road-building programme, because on the Government side of the House, we see that as key to driving productivity and helping jobs, and it is an issue on which many of my colleagues campaigned at the election and their electorates sought to see improvements. However, we have a commitment to the green agenda. That is what the Chancellor set out in his statement, and that is the record that we are building on through measures that include the £1 billion decarbonisation of public sector buildings, which I am sure is a scheme that she would welcome.
Our quest for net zero has the potential to build on proven regional economic strengths and create many more high-skilled, high-quality jobs. It will spur innovation and exports and, most importantly, it can deliver clean and resilient long-term growth. As part of the £8.6 billion of capital investment, the Government will invest £3 billion to decarbonise the United Kingdom and, in doing so, protect or create thousands of green jobs.
Steve Barclay
The hon. Lady has already had one go, but she can have one more and then I will come to my conclusion.
Wera Hobhouse
The Minister is extremely generous, and I am very grateful. On the issue of cross-party support, I know that hydrogen is very much in the Government’s heart as a way for the economy to recover and to get to net zero. Why is there no hydrogen strategy, and why has not there been an announcement today about anything to do with the hydrogen industry?
Steve Barclay
One of the advantages of coming after the Chancellor has spoken for two and a half hours is that many of the same issues come up a second time. He was asked about this, and he said that we have a commitment and he was not going to pre-empt any future announcement from the Prime Minister. Given that that was the Chancellor’s response, I can say that I am certainly not going to pre-empt anything from the Prime Minister, but we recognise the issue. That is an area on which, as the Chancellor covered earlier, the Prime Minister will make any subsequent announcements.
We have announced today £2 billion of green homes grants, which will save energy and, just as importantly, save households money on their bills. Finally, our £40 million green jobs challenge fund will invest in shovel-ready natural capital projects, such as creating new parks and open spaces, cleaning rivers, restoring peatland and helping to plant many more trees during this Parliament. Taken together, these measures will help to ensure that the future is not only more prosperous but happier, healthier and greener too.
Covid-19 has tested our economy to the extreme. The challenges we face in rebuilding are great, but the opportunities are greater still. We can build back better than before, with stronger public services, a new generation of infrastructure that brings our country together and new jobs and opportunities in every region. It will not be easy—it will take all our ingenuity and commitment—but as the Chancellor said earlier today, it is not this crisis that will define us, but our response. The resilience, compassion and determination shown by the British people has carried us through the hardest months, and now, this same sense of collective purpose will drive our recovery too.
Madam Deputy Speaker (Dame Rosie Winterton)
It will not have escaped anyone’s notice that many Members wish to contribute to the debate, so there will be an immediate four-minute time limit on Back-Bench speeches. I call the shadow Minister, Wes Streeting.
Wes Streeting (Ilford North) (Lab)
It was a joy to read in one newspaper this morning that the theme of the Chancellor’s statement today would be jobs, jobs, jobs, which had a pretty familiar ring to it, as did the reports that the Prime Minister wants to bring about a green industrial revolution. In fact, I half expected the Chancellor to open his speech this afternoon by promising an economic policy for the many, not the few. These are truly extraordinary times, but in the end, history will not measure the Chancellor’s success in newspaper headlines or column inches. It will be measured by the unemployment figures. It will be measured by the strength of the recovery, and it will be measured by whether he is able to build back better, build back greener and build a brighter future for every part of our country after a decade of failed economic policies.
Just as these are extraordinary times, this is no ordinary recession. The shutdown of our economy—essential to saving lives—has delivered the biggest contraction of economic activity in living memory, with a record fall in GDP measuring three times that which occurred during the financial crisis. Every community has been affected. Between March and May, an additional 1.6 million people claimed unemployment-related benefits, bringing the total to just under 3 million. We have seen the largest quarterly fall in vacancies since records began in 1971, and 22% of businesses reported turnover down by more than 50%. While the impact has been felt across our country, we know that it has not been felt evenly. Some in our services sector have been hit particularly hard, with the latest Office for National Statistics figures showing a fall in output in accommodation and food of 92%, compared with 20% in professional services.
Tim Farron
The hon. Gentleman is making a very good series of points. He is right to say that there is an inequality in the support. The Chancellor has failed today to provide support for the hundreds of thousands of newly set up small businesses, self-employed people and directors of small limited companies who are still excluded from support. Is not today the day that the Chancellor should be supporting those people and helping them to keep going, ready to meet the recovery?
Wes Streeting
I strongly agree, and it will not surprise the hon. Gentleman that I will come on to make exactly that point.
For some people in secure jobs and on decent pay, the lockdown restrictions have been an opportunity to clear the credit card or build up savings, but for so many others—particularly the young and the low-paid—the labour market shock has been severe, and so has the impact on their pockets. Behind every one of these statistics are people—families and communities who have played their part in getting our country through this crisis, keeping our supermarkets stocked and essential services running; caring for us when we need it, from the brilliant staff who work in our NHS to the dedicated, often disgracefully low-paid and, this week, it seems, maligned staff who work in our care homes; and, with some notable high-profile exceptions, doing everything that was asked of them, staying home to save lives, looking out for their neighbours and volunteering in their communities. It is a truly national response, and it is not over yet. Coronavirus is the biggest crisis of most of our lifetimes. A resurgence of the virus remains the biggest threat to lives and livelihoods at the present time. And the health of our economy cannot be separated from the health of our country. That is why the Government’s failure to put in place an effective track and trace system is so concerning. The Chancellor did not mention it this afternoon, but he knows as well as we do that, without it, the risk to public health and to our economy are that much greater.
Lilian Greenwood
Does my hon. Friend share my concern that while the measures to protect and promote the hospitality sector were very welcome, some people might choose not to go out to restaurants and cafés for reasons that are less about being able to bear the cost of buying meals out and more about their concern as to whether they will be putting themselves and their families at risk by doing so?
Wes Streeting
My hon. Friend is absolutely right, because, as events in Leicester have shown, the virus has not gone away. Local lockdowns, or, God forbid, another national lockdown in the event of a second peak, would deliver a knockout blow to so many businesses struggling to get back on their feet, and as my hon. Friend has just alluded to, those businesses will continue to struggle unless the public are given the confidence they need to go out and start spending money again.
Since the start of this crisis, the Government have been too slow: too slow to take the threat of covid-19 seriously; too slow to lockdown; and too slow to ramp up testing. Our criticism of the Government’s approach to track and trace is not unreasonable; this is not mission impossible. Today, the German embassy in the UK is tweeting to invite British citizens to download its Corona-Warn-App before visiting Germany, and British people are replying to the German embassy here in London asking if they can use it here in the UK. We are not even demanding the world-beating track and trace system the Government promised; we just want a system that works.
In a spirit of national unity and common purpose, we sought to work with the Government wherever possible. We have helped expedite emergency legislation through the House, and we have supported many of the measures taken to respond to the health emergency and to the economic crisis. Where Government have fallen short, we have suggested alternative approaches, and to be fair to the Government they have been prepared to listen. They listened when they introduced the job retention scheme, which we had called for and the TUC helped design, and later when the Chancellor came back with support for the self-employed that has been a lifeline to so many.
In the same spirit, we called on the Chancellor to take immediate action to tackle youth unemployment, and we pointed to the future jobs fund introduced by the last Labour Government as a model. Today’s kick-start announcement is exactly that, and we welcome it. In fact, the greatest compliment I can pay to the Chancellor from this Dispatch Box is that in announcing the kick-start scheme earlier he sounded like Gordon Brown and Alistair Darling. Maligned by the Conservatives at the time, history has been kinder to them than the Conservative Opposition of the day were; their leadership is rightly recognised by the Chancellor today, and that is to his credit.
But I do want to impress on the Chief Secretary the following point before he returns to the Treasury. The success of Labour’s future jobs fund was in no small part thanks to the hard work of the third sector and local authorities in delivering it, all of which are now in a far worse position than they were when the financial crisis hit. They have already stepped up in response to this crisis. Charities have been on the frontline of responding to covid-19, at the same time as the virus has plunged so many of them into financial crises of their own. They are at the heart of community resilience, public service delivery and tackling some of the biggest challenges of our time; we need them to come through this crisis and out the other side, so that they can help our country to do the same.
Councils were asked to do whatever it takes, whatever the cost, and they did. They have delivered food parcels to those shielding and made contact with those isolated and at risk. Their workers have kept essential services running at personal risk to themselves, and they have delivered Government grants to the businesses that need them with remarkable speed and efficiency. We have also seen endless examples of their creativity and ingenuity throughout their crisis response. The Mayor of London has worked closely with London boroughs to get rough sleepers off the streets and into safe harbour, and they are working together now to end rough sleeping for good. My own local council procured step-down accommodation for covid patients leaving hospital in order to delay the immediate discharge of those patients into care home settings to help control the spread of the virus. The Mayor of Greater Manchester, Andy Burnham, provided a loan to a local business to help it scale-up PPE production during the national shortage. While the Government dithered and delayed over supports for arts and culture, the Mayor of Liverpool City Region, Steve Rotheram, was already delivering it through his music fund and film and TV development fund. Councils such as Staffordshire County Council and Brighton and Hove City council have provided additional support to community groups and third-sector organisations, recognising the important role that they are playing in the crisis response.
Today, those local authorities are in far worse shape after a decade of cuts from Conservative Government and the double whammy of rising costs and lost revenues as a result of this crisis. The Secretary of State for Housing, Communities and Local Government promised to reimburse them, but so far he has failed to deliver and, after a decade of Tory cuts, they cannot afford to pay for the opportunity to sit next to him at the next Conservative fundraiser in the hope of a favourable decision coming out of the Government.
Wes Streeting
The Economic Secretary to the Treasury said that it is cheap. I am not sure that a seat at a Conservative party fundraiser is particularly cheap, and it is certainly a price too high for lobbying the Government, but there we are.
Let me turn now to the comments made by Torsten Bell, the chief executive of the Resolution Foundation. He said that the £2 billion kick-start scheme is “a very welcome return” to the approach of the future jobs fund, but he notes that creating those opportunities will be a huge delivery challenge. He says that it will need loads of these jobs to be created by local authorities, and he is right. The success or failure of the kick-start programme will depend on the strength of local government to help deliver it, so it is time for the Government to put their money where their mouth is and fund local government properly.
Jim Shannon
The shadow Minister is right about the role for local government and the important role that it plays. My local council of Ards and North Down has a very clear economic plan. With low rates and with the highly skilled employment that we have, the opportunities are very clearly there. All we need is that investment. I know that the Government have given so much on the Barnett consequentials and that is really important, but it is also important that we have strategy that works for both the Northern Ireland Assembly and for here as well.
Wes Streeting
The hon. Gentleman makes a really important point. Of course, the devolved Administrations can provide their own policy responses, but we know that decisions taken here on public spending have a direct impact on their ability to respond accordingly, too.
We have said throughout this crisis that we would not criticise for criticism sake, and beyond the kick-start future jobs fund announced today, we welcome the attempt to make sure that the furlough scheme gets people back to work, instead of making them redundant through the jobs retention bonus. We are glad that the Chancellor included provision to get people into training and apprenticeships in his statement, and we welcome the additional resources provided to the Department for Work and Pensions to help get people back into work. In so far as they can, we hope that the cut in VAT and the limited “eat out to help out” scheme will be of some assistance to our tourism and hospitality industries, but this falls far short of what we called for and what was promised. We were promised a new deal, but the Chancellor’s big announcement was a meal deal. The Chancellor said that we cannot have endless extensions to the job retention scheme, which was echoed by the Chief Secretary, and that we cannot allow furloughing to go on forever. We agree. We have never argued otherwise. This straw man argument does a real disservice to the concerns coming from those employers and industries that face the biggest and longest hit as a result of covid-19.
Bim Afolami (Hitchin and Harpenden) (Con)
Does the hon. Gentleman not accept that, as the Chancellor confirmed, there is still a Budget to come later in the year and that the announcements today were not the sum total of everything that the Government will do? He should continue the constructive tone that he has used in part of his remarks and say, “Now we should work together on both sides of the House to see how, in the autumn Budget, we should extend things and see what needs to happen once we understand the economic situation at that time, which will be different from what it is today.”
Wes Streeting
The shadow Chancellor has always been willing to work with the Chancellor and we would be very happy to engage with the Government in terms of the flexibility that we are calling for in the sector-by-sector approach. In fact, as the Government did in establishing the job retention scheme, we would encourage them to sit down with employers and trade unions to look at what support is needed, for how long and across which sectors to make sure that people come through this crisis. The challenge with what the hon. Gentleman describes is that for too many businesses it will simply be too late. When there are some businesses that are still shut down through no fault or choice of their own, it is completely unreasonable for them to see Government support beginning to wind up before they can actually open their doors to business. The public health response and the economic response have to go hand in hand. I would have thought that point would be obvious to the Government.
Part of the Government’s challenge is demand and getting consumers spending again, as we have heard, but many of the challenges are also supply side, where a cut in VAT or a £10 discount on a Tuesday night is neither here nor there. Beyond tourism and hospitality, we have seen job losses across a range of sectors in recent days and weeks. The Chancellor offered nothing for manufacturing, including for companies at risk in aerospace and automotive industries, and nothing for the businesses whose doors are still closed. We fear that the Chancellor’s refusal to accept a more flexible and tailored sector-by-sector approach to business support and job retention is a failure of judgment that will be reflected in higher unemployment figures. I would be delighted to be proven wrong on that point.
In his statement, the Chancellor said that people need to know that although hardship lies ahead, no one will be left without hope. I am afraid, as we have already heard, he offered no hope whatever to the excluded, those who have consistently fallen through the cracks of the Chancellor’s support for employed and self-employed workers. Instead, they remain forgotten. Some of this is about choices and priorities. It is not clear why many of those facing the greatest financial hardship were offered no direct financial support in what the Chancellor announced today. Those who will benefit from the cut in stamp duty will, by definition, be better off.
Richard Fuller (North East Bedfordshire) (Con)
I am very pleased that the hon. Gentleman is moving on to this group of people. He has just been talking about extending existing programmes from which they are excluded. In addition to wanting to extend those programmes, what does he want to happen to those who have been excluded, so that that sense of being left behind no longer continues?
Wes Streeting
It seems to me that people who have been excluded require exactly the same sort of assistance as people who have been included, which is direct support to protect their incomes. We would be very happy to sit down with the Treasury to discuss how to bring that about.
Turning to climate change, the Chancellor promised a green recovery with concern for the environment at its heart. What we actually got today was a scaled-back ambition that fell well short of what the Committee on Climate Change and climate change justice campaigners were looking for. The Conservative manifesto promised £9 billion for energy efficiency. Today the Chancellor announced just £2 billion, which is about a fifth of what they promised people before the election. If the crisis has taught us anything, it is that there is such a thing as too late. It is this decade to 2030 where action will really count if we are to prevent catastrophic climate breakdown —not the next 30 years to 2050, but the next 10 years to 2030—so where was the green new deal? A green industrial strategy will get our country back on track to meet its climate obligations in the longer term, but it can also be the shot in the arm our country needs in the shorter term, creating new jobs and delivering improvements to our quality of life.
Lilian Greenwood
I thank my hon. Friend for giving way. He has been very generous. We should have a three-point test for the Government’s infrastructure investment: does it involve local firms and deliver better local jobs? Does it provide opportunities to upskill local people? Will it reduce carbon emissions and ensure that this is a green recovery that gets us back on track to zero emissions?
Wes Streeting
I know you are watching the clock, Madam Deputy Speaker, but the good thing about that intervention is that I no longer have to repeat those points in my speech. I agree entirely.
Wes Streeting
I am afraid I must begin to draw to a conclusion. I remember Madam Deputy Speaker as a Chief Whip and she is not afraid to crack it.
The Chancellor has taken measures that most people would have thought unthinkable from a Conservative Chancellor. In his statement this afternoon, he said his response to this crisis would be unencumbered by dogma. We welcome that approach and we hope that others in his party were listening. In recent weeks and months, we have seen the penny drop for the champions of small state, free market, low tax economics about the limitations of their blinkered ideological dogma. As they look to the future, perhaps they might reflect on their past failures, because if we are to build a better country in the aftermath of the crisis, we have to be honest about the state of the country as we entered it.
The ideological dogma that underpinned the last decade of Conservative economic policies has made this a lost decade—a decade of low productivity, stagnant wages, rising poverty and mounting debt, the slowest growth since the war and, perhaps the most damning indictment of all, child poverty rising on their watch. More children in this country are living in poverty—and not by accident or because of factors beyond the Government’s control but because, as the Chair of the Government’s own Social Mobility Commission said,
“welfare changes over the past ten years have put many more children into poverty.”
People may not talk of their own life experiences in terms of a failed economic model or a broken social contract, but they experience it when their bills rise faster than their wages, when their public services are not as good as they were, or when they hit glass ceilings because of their class, gender, race, religion or disability. Those people who have stared into the grim reality of Britain’s social insecurity system—many for the first time in their family’s living memory—and have contemplated what life would be like on universal credit can see that broken system, too. Those living outside London and the south-east can see it, and clearly resent the concentration of so much power, wealth and opportunity in one corner of our country. Even within our capital city, between the glittering lights of the City of London and Canary Wharf, those families crammed into temporary bed-and-breakfast accommodation can see the injustice under their noses. People may not always talk in terms of paradigm shifts, but they know that after this crisis, we simply cannot return to business as usual.
The Chancellor said he wants to
“heal the wounds exposed through this crisis”,
but the wounds were already there for anyone who wanted to see them. This has got to be a turning point for our country—one that tackles injustice and gives everyone a stake in success; that fixes our broken social care system, so that never again are older and disabled people left as dangerously exposed as they have been during this crisis; one that addresses the social insecurity experienced by people in precarious work and builds resilience for the challenges ahead posed by technological revolution; one where we seize the opportunity to make the recovery a green recovery with the green new deal that our country needs; and where we argue with renewed vigour and conviction that global problems require global solutions, and where we play our part in rebuilding the institutions needed to provide safety and security in a dangerous world.
For the sake of our country, I hope the Government rise to the challenge, because ours is a great country, full of promise and opportunity, one of the richest countries in the world, with world-class universities, entrepreneurialism and successful business, groundbreaking science and technology, world-renowned arts and culture and a vibrant civil society, and that is what we are fighting to save. But this is also a country of staggering inequality, intolerable poverty and wasted potential, and that is what we are determined to change. As history has shown us, when the country provides the call for change, it is in a Labour Government that they find the solutions.
John Redwood (Wokingham) (Con)
I have declared my business interests in the Register.
We need a job-rich recovery. I therefore strongly welcome the measures that the Chancellor has announced today. Some of those measures will save jobs. Some of those measures will create or stimulate new jobs. The Government are right to worry that we have lost too many jobs already over the closures and they are right to worry that we might lose more in the days ahead. They are right to make the changes they are making to the furlough scheme, to encourage as many of those jobs as possible to return, and they are also right to say that we cannot carry on with a furlough scheme indefinitely; there has to be a test of whether there is still a job there. If we roll it on for too long, there will be no real job left, and it becomes just a different kind of benefit, delaying the time when that person can retrain or find a better prospect for their work.
What do we need to extend this jobs recovery? First, we need plenty of money and credit around, so that it is available for the business to pick up and the incomes to rise. The new Governor is a welcome breath of fresh air. As I have mentioned before, the previous Governor went in for extreme austerity, which slowed the economy needlessly. The new Governor has corrected for that and made a very big boost at the beginning of this crisis, which has been extremely helpful. I see no need for the Bank to go to negative interest rates. I do not think the Swedish experiment with them was particularly helpful, and the Swiss experiment is specific to the pressure on the Swiss franc, which we do not have on the pound. I do not think we need to go to negative interest rates, but I would say that the Bank is in danger now of going rather slowly on the quantitative easing and loosening. We see that in some of the figures coming out.
If we compare our figures with those of the United States of America and the Fed, we see that the Fed is doing twice as much or more than the Bank of England, proportionate to the size of the economy. Some might think that perhaps the Fed is doing a little bit too much and the US might end up with some inflation, but we are in danger of not doing enough again, and I hope that progress will be made in getting the right adjustments.
Sir Edward Davey (Kingston and Surbiton) (LD)
Does the right hon. Gentleman agree that while it is right that the Bank of England is doing quantitative easing, how that money is spent ought to have more democratic input? That money could be used for the sorts of investment we need now for jobs and tackling climate change.
John Redwood
The money is used to maintain the price of Government bonds so that the Government can borrow on very low interest rates as much money as they want. Investments are therefore determined by this House and the Government, so I cannot quite understand what point the right hon. Gentleman is making.
The Government are right to borrow a lot of money for six months or so, to get us through the crisis and to speed the recovery, but it has to be a one-off. We cannot live like that. One needs to earn a living, but this is a one-off crisis. The markets are such and the Bank of England’s intervention is such that the Government can borrow a lot of money very cheaply and quite long term. That is the best we can do, and it is the right thing to do to try to save jobs and create new jobs.
This week, we have had the summer forecasts from the European Union for the economies of the European Union, and it has still done a UK forecast. It is worrying, because the forecasts say that the French, Italian and Spanish economies will lose more than 11% of their economic output and income this year. They say Britain will be in high single figures—a bit better than those three—although not as good as Germany, which has come through it the best so far. However, the figures are not acceptable, and most people feel that the United States figures will be considerably better, because the US response to this crisis has been on a far bigger scale, both fiscally and in terms of monetary policy, than the European response. The UK needs to be closer to the American example in this case, because this very severe hit to major economies requires something very big to try to carry them through and rescue those jobs.
I hope that the Government will look at the opportunities for sourcing more in the United Kingdom through its purchasing programmes as we leave the European Union. I am all in favour of strong competition, value for money and good pricing, but I think we have had examples of our not having enough national resilience. We found that we could not buy the things abroad that we needed for our health service, because we were relying on others’ goodwill and they needed it for themselves. We are finding that buying things from China comes with all kinds of difficulties. We will find, if we go down the route of importing more and more electricity, that we have strategic weakness in depending on Russian gas, which is the main source of continental energy. I urge the Government to use their purchasing intelligently to give us resilience and more British jobs. Value for money and competition are good, but let us make sure that the purchasing goes to home purposes, just as they do in other countries abroad, where they look after themselves first.
Alison Thewliss (Glasgow Central) (SNP)
First, I want to say that with the Government and the Chancellor there is always a catch. Nothing is quite so shiny once we pull back the label and see what is underneath. I enjoy looking through the statement, picking around for the detail and the unanswered questions that many in this House have raised and did not have answered.
The Prime Minister’s so-called new deal was neither new nor a deal sufficient for the challenge ahead of us—“Build, build, build” was plagiarised from President Duterte of the Philippines—so I have no hesitation in repeating the calls we have made for an £80 billion stimulus to protect household incomes and grow the economy.
Just as the clinical impact of covid-19 has varied over different geographical areas, so too will the economic impact. It has been a global crisis with very localised effects, and the economic response should reflect that. That is why Scotland’s First Minister has proposed that Scotland should have greater financial powers, for example, over borrowing, so that we can shape our own targeted response to this pandemic, meeting Scotland’s specific needs. The potential benefits to Scotland are clear. Where we have had the power, the Scottish Government have spent £4 billion on covid-19 and more than £2.3 billion to help businesses, well above the Barnett consequentials. The Scottish Government, however, are operating with one hand tied behind their back. According to the Fraser Of Allander Institute, the Scottish Government can borrow up to £450 million per annum for capital investment, with a cap of £3 billion. On resource spending, they can borrow up to £600 million per annum, with a cap of £1.75 billion, but only for forecast error and cash management; they cannot borrow to fund discretionary resource spending.
The fiscal framework could not have envisaged covid-19 and must now be reviewed, as a matter of urgency, to allow the Scottish Government the flexibility to respond to this crisis. It is not just us calling for this; the Northern Irish and Welsh legislatures are also calling for this flexibility for their own needs. The Government would do well to listen to these requests, because they are made on a cross-Government, cross-party basis and with good intent at their heart.
I want to talk about some of the choices the Government can make quickly to help recovery in Scotland. Glasgow has five higher education institutions: the University of Strathclyde, Glasgow Caledonian University, the Glasgow School of Art, the Royal Conservatoire of Scotland and Glasgow University. This week, the Institute for Fiscal Studies published a new report warning that the higher education sector faces losses ranging between £3 billion and £19 billion and that several universities could be at risk of collapse due to the pandemic, yet there is nothing in the statement about this looming crisis.
The Government need to think about how they want to help this vital sector recover and support innovation. At the very least, it would be beneficial to have the graduate work visas extended to those already here on a tier 4 visa and the maintenance of home student fees for EU students. This would be a lifeline post-covid for cities such as Glasgow and for universities across the UK.
Local government is also struggling in Scotland. The hon. Member for Ilford North (Wes Streeting) put well the challenges facing local government across the country in the context of dealing with coronavirus and a decade of austerity orchestrated from Westminster. More money to support local government would of course be welcome, but also useful would be the demand from the Convention of Scottish Local Authorities for a 12-month payment holiday from the Public Works Loan Board, which would be instrumental in helping local authorities manage the constraints arising from covid-19. I urge the Government to consider this.
Local authorities, along with other employers, would also benefit from a reconsideration of the winding up of the furlough scheme, which NIESR has said would result in a 2.5% reduction in the UK’s GDP—a not insignificant sum. I think it would be a grave error to wind this scheme up too early and have repeatedly made my feelings clear on this. Businesses cannot be left to fail. We have seen awful news this week of job cuts across sectors and industries but primarily from businesses in tourism, hospitality and retail, which have suffered the most.
Tim Farron
The hon. Member is making a really great contribution. She is right to focus on businesses in hospitality and tourism. For many of them, the Budget in the autumn will simply be too late. Thousands of businesses and tens of thousands of jobs are at risk this month as the furlough scheme is rolled back from August. Does she agree that sector-specific support for things such as hospitality and tourism could save thousands of jobs and that the Chancellor should provide such support—indeed, should have done so today?
Alison Thewliss
I agree with the hon. Member. Not all industries are in exactly the same position. Some cannot open now. Some will not be able to open for some months. As hon. Members said earlier, some might not open fully until next year. The International Monetary Fund has said that the UK’s GDP could drop by 10.2%, and the scale of the response must meet the scale of the challenge we face, or we could be looking at years of unemployment and hardship across the UK.
Simon Jack, the BBC’s business editor, made a very interesting point about the scale of the challenge facing business and the gamble that business are now taking. As he said, the calculation facing business owners is: are they prepared to pay 5% of the wages of furloughed workers in August, 15% in September and 24% in October, plus £1,560 from November, to get a £1,000 bonus in January? It will depend on demand that the Chancellor is trying to stimulate with food discounts and VAT cuts. It is a gamble for many businesses, and we can see from all the job cuts in the past week, that gamble means people losing their jobs now.
Jim Shannon
It is about not just businesses but charities. The Government have said that £750 million is for charities, but unfortunately they are not helping those charities involved in research and clinical testing. Without the clinical testing, we do not have the medicines that can save lives, which will help this community in the future.
Alison Thewliss
The hon. Gentleman is absolutely correct to make that point.
We are all aware that the crisis will inevitably see an increase in public debt, and my ears pricked up at the Chancellor’s mention of the medium-term public finances being put back on a sustainable footing. That better had not mean more austerity, because after the 2008 crisis we saw that the contractionary policy does not work. It spread misery and hardship, and does more long-term damage to the country’s fiscal position. As we move out of the reactionary emergency policy and into more deliberate methods of restarting and rebuilding the economy, a more radical approach from the UK is needed. Growing the economy and tackling the inequalities we have seen during this crisis must be the priority over deficit reduction.
The past few months have seen measures that would not have seemed possible only a few months ago. Although some of the Chancellor’s announcements today are welcome, we need that bigger, bolder and fresher thinking. We cannot rely merely on the private sector to stimulate the economy; the Government must take the lead. The Chancellor’s statement made mention of the green recovery, vouchers and other types of ideas. Let me expand on what I said to the Chancellor about what Germany has done through the KfW Development Bank, which has changed the whole conversation about energy-efficiency in its buildings. The Chancellor could start to do some of that, not by way of vouchers, but by a cut on VAT on building repairs, as that would encourage people to invest in their properties, in energy-efficiency measures and other types of such activity; it could make a real, lasting difference, rather than just being a voucher.
We support policies such as an employment guarantee for young people, and we welcome a temporary cut to VAT to boost consumption, with low rates for the hospitality and tourism sectors. We hope that that will be sustained beyond the six months, if required. Policies such as a 2p cut to employers’ national insurance contributions would also protect jobs and reduce the cost of hiring staff. We also want to see a national debt plan to deal with the debt that businesses and individuals are suffering, in a way that promotes fairness as well as economic recovery. That would mean working with lenders to ensure that loans, mortgages and rent holidays could be extended to those experiencing financial hardship as a result of the crisis and that alternative payment plans are put in place to help prevent people from losing their homes.
I would be keen to see the pilot on no-interest loans for people on particularly low incomes, which has previously been considered by the Treasury, because it would provide alternatives to high-cost credit, which is exploitative and predatory and ruins lives in my constituency and elsewhere. The reason people are often forced to turn to that high-cost credit is the shameful five-week wait for universal credit, which has been named as one of the biggest drivers of food bank usage and rent arrears in recent years. We could be forgiven for thinking that it is just part of the system, so inflexible have the UK Government been on this issue, but it is a choice and they could change it if they wanted to do so. I very much urge them to do that and to look at the fact that there has been no increase in legacy benefits, because many of the people affected have not seen an uplift and are struggling. The Government need to make the choice to spend the money, cut the wait and lift families out of poverty. The single most effective policy in reducing child poverty would be to increase UC payments, and Scottish National party Members are calling for an increase of £20 a week in UC and child tax credits as part of any stimulus package. Such an increase is supported by the Joseph Rowntree Foundation, Save the Children and many others, and we need to make sure that these families are not left behind as a result of this crisis. The Government should also look at the position for those people who are not entitled to that—people with no recourse to public funds—many of whom have been left with nothing.
The policies put forward today are attractive to those who have disposable income, but we have not seen many policies for those who have very little income. For families in Scotland it is too often the case that the Scottish Government have been the grown-ups in the room, presenting a clear and focused strategy for delivering economic growth, while tackling inequalities. It is unfortunate that we have had to look at a Government down here lurching from scandal to scandal to self-inflicted crisis. It is little wonder, therefore, that over the past week we have seen in the polls a majority for independence, at up to 54%. It is no wonder that the Government seem so rattled by that, because it is clearly a direction of travel, so perhaps they would like to reflect on those polls when considering the support given by the UK Government to the people of Scotland.
Karin Smyth (Bristol South) (Lab)
I was in the Chamber when my hon. Friend the shadow Chancellor spoke earlier and it was obvious that the Prime Minister was visibly irritated by her comments, particularly those on public health and test and trace. However, as was echoed by my hon. Friends the Members for Ilford North (Wes Streeting) and for Nottingham South (Lilian Greenwood), we cannot separate the public health crisis, and the way in which the Government responded to it, from the response needed to the economic crisis. I am not an economist, but I have spent a lot of time in the health service and I know that we cannot rebuild the economy unless we build that public confidence. We saw last weekend that people start going back to places only when they know it is safe to do so.
At the beginning of this crisis, with my experience working in emergency planning in the health service, I thought the Government would revert to the usual tried and tested processes that were in place and that they would trust local government public health officials to trace people properly, as they know how to do. I have been totally shocked—I will admit, perhaps naïvely—at how incompetent the Government have been with their national imposition around the entire system, which has failed us so badly and led to so many excess deaths. Only belatedly are they turning to local government and that local public health expertise that does exist. Local government needs proper funding to continue to do that work to get a proper system in place so that people have the confidence to go back and support the economy. We cannot separate the two.
What we have had today is not a strategy for the future; it is not ambitious. I want the Government to succeed in putting the economy back together. I have three young people at home. I am desperately worried about the future for young people. Bristol South was devastated by the recession in the 1980s and people still bear the scars of that loss of jobs and loss of security, as well as the impact on people’s physical and mental health. I want the Government to do much better.
Most businesses in Bristol South are small and medium-sized enterprises and there are many freelancers. They are not getting the support that they need. Women are more likely to be in shut-down sectors, particularly in retail and hospitality. Women—in fact, all families—cannot work unless there is decent child care and social care in place. The Women’s Budget Group—
Nadia Whittome (Nottingham East) (Lab)
My hon. Friend may have been about to make the point that analysis from the Women’s Budget Group shows that over 2 million jobs could be created in the care sector, which is more than are being created by any of the Chancellor’s schemes today. Does she agree that the Government should meet with the Women’s Budget Group to address this clear oversight in their policy making?
Karin Smyth
I am grateful for that intervention. That is exactly the point that I was going to make—more than 2 million well-paid jobs in this sector. In Bristol, social care makes up 13% of employment and it desperately needs supporting. The Minister has left the Chamber, but he commented in relation to another question that women’s income is quite important to families. It is not the 1950s. It is not pin money that women are earning. They are supporting their families and the gentlemen in the Treasury need a bit of help on the real economy as it affects women, which we are ready and willing to offer.
I want to focus my final comments on the further education sector and adult skills and training. They seem to be a bit hidden with respect to what we have seen today, and I am still trying to understand the detail, particularly as it affects apprenticeships. I am co-chair of the all-party parliamentary group on apprenticeships and I have long supported the Government’s work in this area, working very closely with Ministers. Again, I want to see the apprenticeship system succeed. It is a ladder of opportunity for my constituents who are the least likely in the country to go to university. Please do better.
I have written to the Education Secretary suggesting an approach by Bristol City Council to retain some levy funds so as to be able to support public sector recruitment for apprenticeships. I would like an answer quite soon. Also, I would like to understand from the Government today whether we can clarify what impact the kick-start programme, which we do welcome, will have on businesses if they take on apprenticeships. If that could be addressed later, I would be very grateful.
It looks like colleges are getting some money, but it is a long way short of what they have been losing. City of Bristol College is hugely skilled in blended learning, supporting the most vulnerable and the least skilled youngsters, as well as those with greater skills, in our economy. We want further education colleges to succeed. They are ready to help with catch-up, training and adult skills, but they need to be properly funded to do that.
I would also like to know what the Government have estimated the regional economy of the west of England to be. We have been a net contributor to the Treasury in the past; we seem to be falling behind. When will we understand what these proposals mean for the west of England? At the start of this crisis, the Government said they would support local government. Bristol City Council is £76 million in debt. We need the Government to do better. Please support Bristol.
Robert Largan (High Peak) (Con)
We face a unique economic challenge that requires bold action, and that is exactly what we have seen from the Chancellor today. It is important to recognise that we are able to take such measures to save jobs now only because of the difficult decisions that have been made over the past 10 years. If we had listened to the Opposition, I dread to think what state our public finances would be in and how much more limited our room for manoeuvre would be in this crisis.
Let me be clear: this is not a choice between economic growth and public health. The two are intrinsically linked. Poverty also leads to excess deaths. Economic growth does not guarantee progress, happiness or personal fulfilment, but the absence of growth makes those things so much harder to come by, and the most vulnerable inevitably end up suffering most.
The Government are absolutely right to focus on infrastructure investment as a key part of creating jobs and stimulating economic growth across the whole country, particularly in places such as the High Peak. The truth is that over the past few decades, Governments of all parties have failed to invest properly in transport infrastructure outside London and the south-east. If we are serious about creating jobs and tackling regional inequality, we have to invest in transport infrastructure in places like the High Peak. The rest of the country is not less productive than London because the people are less intelligent or do not work as hard; it is because our public transport systems are decades behind the capital’s.
There is so much potential to be unlocked and so many projects that would make a huge difference. Let me put forward a few suggestions. Let us build the Mottram bypass and the trans-Pennine tunnel to solve the long-standing congestion problems around Glossop and remove the road bottleneck between Manchester and Sheffield. While we are at it, let us upgrade the Hope Valley line and improve the rail links between Manchester and Sheffield. These are two of our country’s major cities and the transport links are simply not good enough. I am prepared to bet that if senior civil servants were commuting to work from places such as New Mills, Chinley or Bamford, that line would have been upgraded decades ago. We badly need to upgrade Manchester Piccadilly station to remove the bottleneck that holds back the entire northern rail network.
We need to connect communities that have been effectively excluded from the public transport network. The people of Gamesley were first promised a railway station more than 50 years ago. Building Gamesley station would create jobs, get cars off the road and transform the life chances of people in one of the most deprived areas of the country.
Infrastructure is more than just transport. We need to turbocharge the roll-out of fast and reliable broadband, especially to rural areas like mine; we need to get on and build new urgent care centres at Tameside Hospital and Stepping Hill Hospital, and push ahead with plans for a new major health centre in Buxton; and we need to repair the dam at Toddbrook reservoir near Whaley Bridge, hopefully with a new hydro scheme and a circular path.
I am aware that I have just rolled off a list of ambitious projects. To deliver them, we need more than just political will; we need to get the nuts and bolts of delivery right. I have talked about bottlenecks in our transport network, but to solve them we need to address the bottlenecks in our construction industry and our planning system. It might not be as glamorous or exciting as the big money announcements, but it is just as essential. We need to make certain we have the skills and the people in place to build the infrastructure, and the supply chains to get them the materials and machinery they need. Therefore, I wholeheartedly welcome the Chancellor’s announcements on training schemes and apprenticeships, but we should be thinking more carefully about how they can be targeted to the industries that we need to build infrastructure.
To sum up, the next few months will be extremely difficult. There is no magic wand or silver bullet and we will not get everything right, but I am confident that if we work together, we will get through this.
Ben Lake (Ceredigion) (PC)
Diolch yn fawr, Madam Deputy Speaker, for calling me to speak in this important debate.
It is a pleasure to follow the hon. Member for High Peak (Robert Largan). I agree with him that some of the measures in today’s statement were bold. I would highlight the cut in VAT to 5% for the tourism and hospitality sectors. That is, of course, a long-standing Plaid Cymru policy. I never thought I would stand in this place and thank a Conservative Chancellor for the temporary implementation of Plaid Cymru policy, but there we are. I do thank him nevertheless.
I also put on the record my support for the measures on youth employment. They are particularly important for Wales, where employees under the age of 25 were almost three times as likely to be working in sectors that were shut down than those of any other age group. Of course, 18% of female employees worked in shut-down sectors, compared with 14% of male employees. In welcoming those measures, I note that the fundamental challenges facing the UK economy, including low productivity and regional inequality, have been exacerbated by the covid-19 crisis.
To address those long-term problems, I pressed the case for a review of existing tax reliefs and further innovation funding during the Finance Bill debate. Today, I fear that an opportunity has been missed to increase R&D credit, as well as to review reliefs such as the enterprise investment scheme to ensure that taxpayers’ money is adequately supporting private investment in the marginalised areas of the UK. I note only that 46% of public R&D funding is spent between London, Oxford and Cambridge.
I had hoped to see some measures to address that issue. What is more, the statement might have talked a little more about the future shape of the economy. Despite the ravages of covid-19, we have an opportunity to facilitate a green transition and to address some of the fundamental issues of the pre-covid economy that I mentioned earlier—low productivity, low wages and low growth.
What I would argue is the long overdue support for home insulation is another measure that I welcome. In doing so, I say to the Minister that I hope the measure will utilise the fantastic nature of Welsh wool, particularly given the difficulties that the British wool industry is facing.
With research showing that just 1% of the global fiscal response to covid-19 is going to green projects, today was a clear opportunity for the Government to set out their environmental credentials and to lead by example. Instead, the £3 billion promised pales in comparison with the example of Germany, where a third of its €130 billion stimulus is targeted directly at lowering emissions. I am conscious that the Chancellor suggested in his speech that a third phase to the economic response will focus on efforts to rebuild the economy, so I very much hope that such issues will be addressed at that point.
To conclude, the Chancellor explained that the current phase—the second phase, which we are addressing today—is about jobs, and measures on jobs being placed at the heart of the economic recovery. In that respect, I note that economic recovery is intertwined with the success of containing any outbreaks of the virus. As such, we need to explore ways to introduce targeted furlough schemes and business support schemes to support local lockdowns, which recent events suggest will become the norm.
My concern is that with statutory sick pay at less than £100 a week at the moment, many people will face a difficult decision if they are asked to self-isolate—a choice between doing the right thing for public health and putting enough food on the table for their family. That is an unnecessary risk, which could undermine not only the efficacy of local lockdowns but any wider economic recovery. I hope that the Minister and the Government will give further consideration to those points.
Mark Eastwood (Dewsbury) (Con)
Even before the Government’s announcement today, they had already put in place an unprecedented support package for businesses, employers and employees, which has provided a vital lifeline throughout the coronavirus emergency. By the beginning of June, the job retention scheme had safeguarded 12,900 jobs in my constituency alone. Nationally, more than 1.1 million employers have used it to protect more than 9.3 million jobs. The self-employed income support scheme has paid out more than £10 million across Dewsbury, Mirfield, Kirkburton and Denby Dale.
Those essential schemes were put together at a rapid pace, and it is testament to the dedication of Ministers and officials that they are being delivered. I also thank Ministers for listening to my voice and those of Back-Bench colleagues, recognising the limitations of the business support fund and implementing the local authority discretionary grant scheme, which has allowed local authorities to provide targeted support to those businesses that had slipped through the gap.
I welcome all the measures announced by the Chancellor earlier. I particularly welcome the focus placed on skills and apprenticeships, a key part of my election campaign. The measures announced in his statement will be a huge boost for apprenticeships. Clearly, we must avoid the risk of young people losing out on skills development at such a key stage of their lives. The measures announced earlier see off that risk, both safeguarding and incentivising apprenticeships. Alongside the kick-start scheme, high-quality traineeships and more places for level 2 and 3 courses, this shows the Government’s commitment to our young people and to boosting skills. I will continue to provide my support to Kirklees College and other local organisations to promote skills and apprenticeships. The national skills fund announced in the Budget earlier this year will be a significant scheme to assist people in retraining and adapting post covid-19. I urge the Government to ensure that it has a timely delivery, to provide long-term skills support.
We are not yet through coronavirus. Some sectors of the economy remain closed until they can reopen in a covid-secure way. The Chancellor indicated that there will be a third phase, when we will rebuild. Once we are free of coronavirus, we will need a programme as ambitious as the announcements today. It will need to focus on giving more flexibility to businesses, boosting jobs and local infrastructure. I hope to work with Ministers to secure key infrastructure investment across my constituency, looking at the feasibility of the Flockton bypass, essential improvements to Mirfield railway station and much-needed upgrades along the Penistone line. I will continue to work closely with businesses and the self-employed in my constituency to minimise the impact of covid-19 and ensure that they prosper after this pandemic has passed.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
There is no doubting the magnitude of the economic challenge that we face as a country. The north-east too often gets the worst deal when trouble hits, with lost jobs, declining investment and public sector cuts. Our region went into this crisis with the highest level of unemployment in the country, and I can only see things getting worse. The northern TUC estimates that almost a third of jobs in our region are currently supported by Government schemes, so there are a huge number of jobs at risk. With 71% of children living in families with little or no savings, the impact could be devastating.
Today, I was hoping for reassurance that things could be different. There are certainly measures to welcome. The kick-start scheme, like Labour’s future jobs fund, should hopefully help young people starting out in their careers. The green jobs drive should help to deliver skilled, well-paid, sustainable jobs. However, I fear that the Government’s ambition simply does not meet the scale of the challenge. Just as they were too slow to act on public health in the early days of this crisis, leading to many more devastating deaths than we should ever have seen, I am concerned that this is just not enough now to ensure that we can grow out of this crisis.
It is the poorest households that have seen the greatest loss of income already. The jobs that are most at risk are in the sectors with lower pay where young people and women make up most of the workforce. We cannot let this crisis entrench regional, intergenerational and gender inequalities even further. It is crucial that the Government do more. We need short-term support for businesses that will continue to struggle. A one-size-fits-all approach is leaving too many people falling through the gaps. The package for the creative sector is welcome, but we also need a longer-term strategy as venues remain shut and capacities limited.
Transport investment will be vital to unlocking the potential of the north. A commitment to get Northern Powerhouse Rail, High Speed 2 and upgrades to the east coast main line shovel-ready and started in the north would unlock thousands of good-quality jobs. The kick-start scheme for young people is welcome, but we need to see reskilling opportunities for older workers and action to address poverty and income inequalities, including a real living wage and reforming social security. The long-promised review of business rates and online taxation is desperately needed for our high streets and town centres, because their long-term transformation has been accelerated by this crisis. I want to put in a special plea for business rates relief for our regional airports. It is a major fixed cost that is simply not reflected in the current passenger numbers or the projected numbers for quite some time.
I also want to touch on support for new parents. I know that it is not hard-hat and shovel-ready stuff, but frankly, thousands of new mums have been left completely overlooked during this crisis. Their maternity leave period has seen isolation, with a lack of health visitor, mental health and medical support and peer group and family help at this vital time. If not addressed, that could impact them and their children for years to come. They are now having to go back to work—many without access to childcare—and they risk being targeted for redundancy. That is no way to treat new parents or the children they are bringing up in this world. I implore the Chancellor to look seriously at the Petitions Committee report on these issues and at the reasonable request for the additional support that new parents now desperately need.
The cost of doing nothing now will be far greater than that of providing the right support. People have made huge sacrifices to get us through this health crisis. The north-east is now looking for the Government to deliver on their promises in return.
Jacob Young (Redcar) (Con)
I direct Members to my entry in the Register of Members’ Financial Interests. As a former apprentice in Teesside’s chemical industry, I welcome my right hon. Friend the Chancellor’s statement, as he takes the necessary steps to restart our economy by supporting, creating and protecting jobs.
Four months ago, as a country we all sat down and watched the Prime Minister announce the national lockdown. Businesses closed their doors, not knowing when they would reopen. Employees went home, not knowing whether they would have a job to return to. Families sat with their children, not knowing when schools would return.
The Government recognised the scale of the sacrifice and delivered an unprecedented level of support for workers throughout Britain. In Redcar and Cleveland alone, more than 20,000 people were helped through the coronavirus job-retention scheme and the self-employed income support scheme. I accept that the system is not perfect and that some people were not able to get the same level of support, but those two schemes alone are recognised as some of the most generous globally.
If we consider the cut in business rates, the mortgage holidays, the coronavirus business interruption loan scheme, the bounce-back loans, the uplift in universal credit, the future fund, the sick-pay rebate, the tax deferrals and the £30 million-worth of small business grants given to Redcar & Cleveland Borough Council, we can see that this is a Government who are determined to support businesses and working people with whatever it takes. Now is the time to get things back on track.
Following on from the plan for jobs that my right hon. Friend announced earlier, there are three areas in which I think we can start a jobs revolution. The first is focused decarbonisation. Before the lockdown, between January and March this year renewables soared to make up 47% of all UK electricity generation—up from a mere 6% 10 years ago. Our new normal is greener, but there is still more to do. The announcement on the green homes grant is a fantastic first step, and in the Budget earlier this year the Chancellor had already committed £800 million to support carbon capture, utilisation and storage, but I urge him to go further in his autumn Budget. Investment in hydrogen technology can decarbonise our hard-to-abate sectors such as transport, domestic heating and industry, creating and securing hundreds of thousands of jobs in the sector.
Secondly, the Chancellor and I share a love for free ports. However, the process for developing our free port strategy could end up being long and complex. By fast-tracking Teesside as a free port pilot, without the need for the lengthy competition process, we will start to create new jobs now and benefit from free port status immediately after 1 January 2021.
Thirdly, we need to reform public procurement to help to support local businesses and ensure that UK jobs are supported. We are embarking on a decade of build, build, build, and one of the largest pieces in the jigsaw will be HS2. However, we already see parts of HS2 being made in France when British fabricators have the capability here. This is not a cry to buy anything with a Union Jack printed on it—we should of course protect the public purse and strive to deliver value for money—but we must always consider the economic, social and environmental impact of choosing to support UK jobs. By seizing such opportunities, we can be at the forefront of a global transition and lead the way to a new, healthier post-covid economy.
To conclude, the last time this country was asked to make a national effort on this scale was during world war two. After so much destruction, the areas that the Government needed to rebuild then were obvious—roads, infrastructure and buildings—and left little room for innovation. This time it is different: this time we have the ability to decide our own spending priorities on the back of this crisis. I know that everyone in this House will seek to play their part in helping the country to rise to this challenge of new proportions and ensure that no one is left without hope.
Owen Thompson (Midlothian) (SNP)
There were lots of bribes and a lot of bluster in today’s statement, but very little on what will actually tackle the issues at the heart of society and expose those issues exaggerated by covid-19: the deep poverty and inequality endemic in society. The virus itself may not discriminate, but we know that the economic as well as the health impacts have been far more acutely suffered by those in poverty.
A recent Social Metrics Commission report found that 65% of those in work and in deep poverty have seen reduced hours or earnings, have been furloughed or have lost their jobs, compared with 35% of those who are comfortably above the poverty line. Families who are already struggling with in-work poverty and who cannot afford to lose their household income are those who are being most badly hit. They need hope. They do not need a meal deal; they need a new deal—no matter how much the Chancellor might like a cheeky Nando’s.
Covid-19 has caused a surge in the need for the UK’s welfare safety net, but that has been brutishly decimated over years by the UK Government’s austerity policies, described by a UN report as causing a
“systematic immiseration of a significant part of the British population”.
Covid-19 has made millions more reliant on that broken system. Recognising the impact of poverty, and taking steps to eradicate it for all, should be at the forefront of any response.
We also need to look again at the coronavirus business interruption loan scheme, and get the money flowing through to the businesses that need it. Uptake at the start was pitiful, and although some effort was made to improve the scheme—and some effort to massage the figures, some would say—too many companies are still being left without any support. Many are just surviving and cannot take on the weight of crippling additional debt, especially with the sky-high interest rates that some companies are offering for loans, with full Government accreditation. Instead of a hand up, many smaller businesses are being left to be hocked by unscrupulous lenders. The Government need to commit to turning those loans into grants instead of debt, to protect jobs and to ensure the survival of those businesses.
I want to give credit where credit is due. I certainly welcome the 5% VAT cut for hospitality. The Scottish Government have also called for a youth jobs guarantee, so I very much welcome today’s recognition of the need to centre on young people in the economic response. Young people from Midlothian’s youth platform recently met virtually with me to discuss the findings of a survey that they undertook to share the experiences that young people have faced through lockdown. It was worrying—I will be honest about that—and it showed the deep level of anxiety that young people felt about their futures, about jobs, about apprenticeships, and about their education. Many are in households where parents have lost their jobs and were struggling just to pay their bills, so it is hard to feel positive about their prospects. Action to help young people to see opportunities instead of struggles is certainly much needed.
Those who are excluded from the support so far have also been missed yet again today. There was an opportunity perhaps to recognise those who have been forgotten, although I accept that the Financial Secretary to the Treasury said yesterday that they had not been forgotten. I can only conclude that, if they have not been forgotten, it is an intentional act to exclude them.
I would have thought that this was an opportunity for working together respectfully, and for the four nations approach; yet a support measure that could have genuinely helped a lot of these people was universal basic income. When I asked the Department for Work and Pensions what intention it had of considering the findings of a study on that, it simply said that it was not even going to look at it. Inequalities need to be tackled. This was a chance for the Government to do that, and unfortunately I think it has been missed.
Theresa Villiers (Chipping Barnet) (Con)
Almost everything that we want to achieve in this House depends on having a strong economy, whether it is protecting the NHS, putting police on our streets, giving every child the best education or conserving the natural environment. All those things and so many more depend on economic prosperity, so the question of how we pull ourselves out of this covid economic catastrophe could not be more crucial.
The Government’s intervention package, as many have said, is bigger than anything ever attempted in our nation’s history, and it has protected the livelihoods of millions of people, but it cannot last forever. That was one of the reasons why I was one of the MPs pressing from the earliest point to get the lockdown lifted, to allow shuttered businesses to open up once again. With a global economic recession that is probably going to be the worst on record, many businesses and jobs are in peril. I welcome the Government’s determination to invest in infrastructure, better transport, better broadband, better flood protection and better school buildings. They can all play a part in a plan for recovery, and I appeal for London to get its fair share of that investment.
I welcome the pledge to build back greener. Only a few days ago, constituents logged into a Zoom lobby of Parliament, asking for a concerted push to insulate homes and buildings, and the Chancellor has confirmed that that is going to happen.
We will need to train up thousands of people to do such work, and investment in skills needs to be a second key element of our plan for recovery. That will help improve our poor productivity, but it can also be a powerful driver of social justice. The Conservatives are committed to aspiration and ensuring that everyone has the chance to get on in life and go as far as their talent will take them. Giving people of all ages and backgrounds access to the highest quality training and apprenticeships can help us make good on that vital commitment. In delivering those training opportunities, active efforts must be made to reach out to BAME communities to unleash the potential of people who may have been held back by discrimination and disadvantage.
Lastly, I turn to the public finances. The covid crisis has devastated the nation’s balance sheet. Even the driest of fiscal conservatives recognises that we need to spend big when our economy suffers an external shock. With borrowing costs at a historical low, the steep increase in borrowing seems just about affordable. However, it does leave us vulnerable if interest rates rise in the future or if we are hit by a second shock, whether a renewed outbreak or some other unforeseen disaster.
Thankfully, as many have said, the current situation does not require a rush to austerity, but we will need a clear plan for starting once again the painstaking task of repairing the public finances and getting the deficit down to manageable levels. It will take time, it will take work and it will take some hard choices, but the Conservatives have never shirked this task in previous decades. Now, we must rise again to that challenge and ensure that we put the nation’s finances back on a sound and stable footing for the future.
Chris Clarkson (Heywood and Middleton) (Con)
First, I welcome today’s statement and this opportunity to discuss the economy more broadly. Mindful of how many people want to speak today, I will try to keep my comments brief.
Unlike the crack of doom from some of the Opposition, I am delighted that the Government are intending to keep some of their promises at the general election, delivering on jobs and skills, especially for younger people, to drive our economic growth as we recover from coronavirus. I have to say I am overwhelmed by the sheer scope of what was proposed today, which is certainly more than I had anticipated. The measures announced will be widely welcomed not just in my constituency of Heywood and Middleton, but across the whole north-west—not least in my own household, as it now appears that the Treasury is turning every one of my vices into a small act of economic patriotism.
The country faces an immense task in the months and years ahead as we adjust to the new normal, but this Chancellor and this Government are proving themselves more than equal to the task. I know that I speak for many colleagues when I say that the dialogue with the Treasury has been open and reassuring. Reacting to such an unprecedented situation was never going to be smooth or seamless, but it has been heartening to know that, throughout, the Government’s response has been driven by a commitment to keep people safe and our economy strong, based on listening to Members in this House. May I take this opportunity to thank the whole Treasury team, but in particular my hon. Friend the Member for East Surrey (Claire Coutinho), who, according to forward estimates adjusted for the medium term, turns 25 today? I should put on record that I am not an economist and some of my figures may be out slightly, but I am sure she will not correct me.
It is clear that the north-west must be at the heart of this country’s economic recovery from covid. I welcome the measures announced by the Prime Minister on 30 June as part of the £5 billion of investment in capital projects, including the £1.5 billion for hospital improvements and £900 million for shovel-ready projects, which I am sure will include some excellent ones in Heywood and Middleton. Just as my hon. Friend the Member for High Peak (Robert Largan) is always diligent in remembering Gamesley station, I must say that such projects must include bringing the Metrolink to Middleton.
However, whether it is the northern powerhouse, the midlands engine, the western gateway or the southern—whatever it is they have down south: Pret A Manger?—it is clear that this needs to be a national recovery, driven with a one nation approach.
Sir Edward Davey (Kingston and Surbiton) (LD)
I give almost two cheers for the short-term measures announced today, but less than one for the medium and long-term measures. The Chancellor will have to produce a much more coherent economic strategy if we are to deal with unemployment in the medium term and with inequality and climate change, which are still massive challenges for our country.
In the short term, the job retention bonus looks good, particularly on the back of the furlough scheme. The VAT cut for the hospitality and leisure sector is also good, but there was nothing for the self-employed; they have been left behind—they have been excluded—and that is just not good enough. The kick-start programme for young people looks good, but why only six months of training? If we are really going to help young people come back and retrain, we have to give them far more than that. And I do not think that the stamp duty measure is going to be a huge boost to people. For a start, the housing market is already picking up now that people are able to buy again, as demand was already there. Secondly, this tax cut will get capitalised in the price; house prices will just go up, not serving anyone, and that will mainly go to the better-off. I would rather have seen help for renters, help for homeless people, and building homes—that is the way to tackle the housing problem in our country.
When it comes to the medium-term, this package is just not up to the moment. We have a serious economic crisis, the like we have never seen, and it comes on the back of the threats that will be posed to parts of our economy from Brexit. We also have the climate change challenge and the global issues caused by the tensions in trade between China and the US. All these things will dampen the global economy and our economy, and I just do not think that the package we have heard today really amounts to anywhere near enough if we are serious about protecting jobs and getting that green transition.
It is difficult to look at the figures and do a proper analysis, given that there is so little data in this plan for jobs, but it looks like this may be the smallest fiscal stimulus in the whole of the G7. So to put this into context, this is not the massive boost that people are saying.
If we really want a fiscal stimulus, we should be talking about the longer term and about the new industries. I was very proud when I was Secretary of State for Energy and Climate Change that we really boosted renewables. We nearly quadrupled renewable power. We became the world leader in offshore wind. We saw jobs created in declining economies such as those in Hull, Grimsby and Lowestoft, thanks to the policies we put in place on the basis of green jobs. Where is that ambition here? I do not see it. There is nothing on hydrogen, as has been said, and no real push for renewables, no real push to make sure that we bring in investment in nature and environmental improvements as part of the climate change challenge, and very little more on green transport.
I say to the Ministers on the Treasury Bench that what we wanted above all, for short-term jobs and long-term benefits for the climate and the economy, was a home insulation package that was much bolder. There is a former Prime Minister who used to say, “Education, education, education,” and I say, “Insulation, insulation, insulation.” I want jobs in every village, town and city across our country. That will be the way to really make sure we do not have a blight on our economy and a blight on young people, and really get a grip.
Caroline Lucas
The right hon. Gentleman is making a powerful case. As well as insulation, does he agree that we need to make sure we have zero-carbon homes going forward? Some 2 million homes have been built since the Climate Change Act 2008 came into being that now need to be retrofitted. Does he agree that the Government must bring forward the future homes standard, and that they were wrong to scrap the zero-carbon homes standard?
Sir Edward Davey
The hon. Lady, whom I call my hon. Friend, is absolutely right. I was part of the team that brought in the zero-carbon homes regulation, and two months after we left office the Conservative party got rid of it. It was an outrageous act of climate change vandalism, and nothing has happened on that, so the hon. Lady is absolutely right.
The idea that the Conservatives have a good record on climate change is for the birds. All the advantages actually came from things that the Labour Government did before 2010 and things that the Liberal Democrats did when we were in charge of the Department of Energy and Climate Change, and they tried to undo almost everything when they had the chance. I saw them trying to undo all the great things—not just zero-carbon homes, but they cancelled the carbon capture and storage plans, which they are now trying to put back with the timidity of a mouse. They do not understand how big the challenge is. This is an historic challenge; we have to move our economy from a fossil-fuel based economy to a net zero carbon economy, and we cannot wait for 2050. We now have an opportunity to retrain our young people, and our whole workforce, so that we can deliver this, creating a green industrial base and a regional strategy that brings everybody up. However, I fear that this Prime Minister, this Chancellor and this Government are just not up to the job.
Lucy Allan (Telford) (Con)
It is a pleasure to follow the fine speech by the right hon. Member for Kingston and Surbiton (Sir Edward Davey), although I do not agree with his conclusion. At the start of March 2020, Telford, the town that I am so proud to serve, was coming of age. We had just celebrated our 50th birthday as a flourishing new town with a great future. Historically, Telford is a town that has been among the hardest hit by previous recessions, and it was once an unemployment blackspot, particularly for young people not in education, training or employment. We had the closures of the pits in the east Shropshire coalfield and the deep recessions that followed. Telford has always struggled, but it has always survived and, against the odds, in 2020 it was flourishing as never before. The new Southwater centre had been created, there was a thriving night-time economy with new restaurants and bars, and with new factories and new skills in advanced manufacturing jobs, unemployment was at an all-time low. The town centre’s iconic Plaza office blocks were fully let for the first time, and our huge retail sector was bustling.
Set against this backdrop, it is desperately sad to see that those who had been hit the hardest in the past—those who had struggled the most and triumphed over the odds—have been hit the hardest all over again. Overnight, Telford became a ghost town, a wasteland with bits of litter blowing around the empty streets. The Telford dream was now a nightmare of lost livelihoods, lost opportunities and lost hopes for the future. The futures that people had nurtured and nourished were swept away in an instant. When people stop buying cars, it is not just the showrooms in Chelsea and the production lines in Solihull that suffer; it is also the supply chains, including the people making wheel arches in Telford, as well as their families, their household incomes and the local shops where they spend their wages. They all suffer.
However, Telford has always found innovative ways to survive—adapting, evolving and embracing change, from the coke ovens of the industrial revolution to the state-of-the-art advanced manufacturing robots of 21st-century post-Brexit Britain. We know how to do change in Telford: fundamental change, step change, revolutionary change. Let us be in no doubt that the covid crisis is the stimulus for a new, accelerated revolution involving a new economy with new jobs in tech, data and the life sciences. In the town that was the birthplace of the very first industrial revolution, we understand that by embracing change we embrace opportunity.
Post-covid, none of us can keep doing what we used to do. The world has hit reset, and we must evolve to meet the new normal. We are all being forced out of our comfort zones and doing things differently, and that process is now well under way in Telford. Our history in Telford shows us that by embracing revolution and finding solutions through innovation, all change is an opportunity to be seized. Because of this, we in Telford will survive and flourish once more. I want to take this opportunity to thank the Treasury team for the incredibly agile and responsive support that they have given to workers and businesses throughout the pandemic, and to young people across Telford today. Telford’s economy, and the economy across the UK, could not be in better hands than those of our nimble, responsive and emotionally intelligent Chancellor. My message to the Chancellor is: keep doing what you are doing, because we know you are with us every step of the way. We in Telford thank you for that.
Olivia Blake (Sheffield, Hallam) (Lab)
It is a pleasure to follow the hon. Member for Telford (Lucy Allan), who has spoken passionately about Telford’s tenacity. Today we are debating the state of our economy, which is in urgent need of discussion and desperate need of action. As the Chancellor pointed out in his statement, covid-19 resulted in a 25% drop in GDP in April, compared with February. That is unprecedented. Technically we are not in recession yet, but the writing is on the wall: there is worse to come. We know that we will be living with this crisis for a long time.
Many of the measures that the Chancellor has outlined today are welcome, but they do not go far enough to address either the current unprecedented crisis or the long-term problems that have caused the UK to be one of the G7 economies hit hardest by the coronavirus. Before covid19, we were in no position to weather a financial storm. Ten years of anaemic growth have seen wages stagnate in real terms, and people’s rights at work have been eroded. Take the care workers the Prime Minister has clapped for on Thursdays and then scapegoated on the following Monday—on zero-hours contracts, poverty wages, and often unacceptable statutory pay. This was a problem created in the past 10 years, not six months. In my city, we have seen central Government funding cut year in, year out, with vital services stretched and starved of funding. We now face a £23 million shortfall in the council’s funding this year.
Feryal Clark (Enfield North) (Lab)
Does my hon. Friend agree that local authorities are essential in our recovery from covid, and that local authorities have been abandoned by the Chancellor in this mini-Budget, and by this Government?
Olivia Blake
My hon. Friend makes a very valid point. The work that local authorities have been doing should be commended and rewarded. The Government have made promises that need to be kept in terms of funding, and I will watch to see whether they will fulfil them.
Nothing the Chancellor has said today addresses these issues. We were promised a green new deal. The £3 billion for home retrofits and energy efficiency in public buildings is welcome, but it is not a green new deal. It falls well short of the funding we need to kick-start a faltering economy and deliver the growth and green jobs that are vital for our recovery. We will see Governments across the globe act on a green recovery, and I am afraid that this will be a missed opportunity for the UK to help with a future crisis in the wake of this pandemic. We know that we are not out of the woods yet and we may be facing further hardship as a result of coronavirus. The medium to long-term impacts could be felt for generations. We need the Government to forge a path from which we can emerge with greater opportunities and a greener economy.
I welcome the extended access to funding for apprenticeships, but we cannot escape the fact that our further education sector has been decimated. We need accessible, lifelong learning to help us to pull through this global crisis. I am shocked that the only mention of universities in this whole package is £300 million for infrastructure and labs. That undermines the fact that research in this country is completely down to the amazing researchers that we have. We have seen redundancy processes started at multiple universities across the country, and this will be harmful to gender and black, Asian and minority ethnic representation in early careers. We risk having a lost generation of researchers in this country, and that will serve only to make us weaker in the future and reduce our productivity. It is absolutely vital that we see more from the Government on this.
The scale and ambition of the economic response to the coronavirus must match the scale of the challenges we face. As we come out of this public health crisis—if we do indeed come out of it—building back better requires that we do more than provide a plaster for the damage inflicted on the economy. It means addressing the fundamental problems in our economy—low growth, stagnating living standards, and poor pay and conditions. Unfortunately, the Government continue to offer nothing to address those issues. They say they will follow the science. I may have taken my lab coat off, but I hope I have given some food for thought.
Jerome Mayhew (Broadland) (Con)
We are looking at a really deep recession, with unemployment almost certain to rise vertiginously over the coming months, with a particular impact on the younger workforce. I therefore wholeheartedly welcome the Chancellor’s statement to protect, support and create jobs. That is evidence, once again, that this Conservative Government are not just listening to the people but acting swiftly and dynamically to tackle the economic and social fallout from covid-19.
I also welcome the developing demonstration that this Government are really serious about reshaping the economy to achieve carbon net zero by 2050. We are on a journey of technological development to zero-emission energy and zero-emission land transport, and now is the time to tackle our buildings, which are responsible for 18% of all our emissions. Even with our increased appetite to “build, build, build”, 80% of all buildings likely to be standing in 2050 have already been built. The Chancellor’s £3 billion insulation schemes are a fantastic start, and I look forward to the publishing of the buildings and heat strategy later this year to see how this policy can be further developed.
However, as the Chancellor made clear, our response to the current crisis cannot all be about spending. In the medium term, we need to put our public finances back on a sustainable footing. Baldly, it is likely that ways in which to raise revenue will not be far from the Chancellor’s mind. Anticipating that, we should consider a carbon tax, together with a scheme for broader adjustment payments. Today, the full cost to the economy of carbon emissions is not included in the price of purchase, creating a false exchange. Put simply, when we buy something, we do not know what carbon cost we are responsible for. A carbon tax, which adds in that missing part of a transaction, would remedy that.
Such a tax would make the decision to take advantage of today’s grants for insulation even more attractive, and, rather than costing the taxpayer, could raise significant sums for the Treasury. Its enormous benefits can be summarised as follows: creating an efficient exchange where all the costs of production are reflected in a decision to purchase; creating stronger and more profitable business cases for the new green tech businesses that we want our economy to pivot towards, without having to attempt that by expensive and inefficient Government projects and grants; providing a cash incentive to all of us to reduce our carbon emitting purchases in favour of lower carbon alternatives, thereby assisting the achievement of our legal obligation to reduce carbon emissions to net zero by 2050; and, in addition to all those public goods, generating a very significant income source for the Treasury at a time when everyone else is calling for increased spending. If anything will get the attention of the Minister, I hope that last point will.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
In the last few weeks alone, my constituency has seen Rolls-Royce announce 700 redundancies, Menzies Aviation 160 and Swissport 321, all adding to the toll of expected job losses at British Airways, NCP, easyJet, Jet2, Flybe, BA CityFlyer, TUI, North Air and SSP. I would have included Ryanair in that list, but I am pleased to say that it has just reached an agreement with Unite on temporary pay cuts to stop the job cuts that had previously been announced. Well done to them and let that be a lesson to other airlines. Combined, Renfrewshire will see thousands of households employed in aviation and aerospace thrown into financial turmoil. Across Scotland and these islands, the total will very likely be into six figures. If it is not clear to the Government that aviation and its supply chain is in the middle of its biggest crisis ever, it should be now.
By May, the claimant count in my constituency had doubled in the space of two months and those newly unemployed people had the added stress of looking for a job in an employment market in its worst state since the second world war. I mentioned that I have no doubt the total will rise further. I say that because I see no urgency on the Treasury Benches to save the aviation and aerospace industries. In my Adjournment debate on Rolls-Royce redundancies, the Minister winding up, the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Stratford-on-Avon (Nadhim Zahawi), lauded the company for offering voluntary rather than compulsory redundancies. If that is the strategy, then God help us all. There are many constituencies like mine where airports play a pivotal role in the local economy, yet there has not been a cheep from Government about what support such areas will get to address the particular challenges our economies face. I hope the Chancellor and his colleagues at the Department for Business, Energy and Industrial Strategy can begin work urgently on a plan tailored to communities hardest hit by the devastation to the aviation sector.
I hope they will also take a hard look at the reaction of aviation companies to their employees. We have seen British Airways threaten one third of their workers with the sack, while the other two thirds have been told that they too will face the sack if they do not sign up for lower wages and lesser terms and conditions. I hear that easyJet and other companies, such as Menzies Aviation, are now trying the same bullying tactics. Unlike in most of Europe, these practices are despicable but not illegal. Those workers deserve the same protections as their fellow workers elsewhere. I urge the Government to back my Employment (Dismissal and Re-employment) Bill to make such practices illegal and make sure the law has their back.
It is not just in aviation where coronavirus has wreaked havoc. Alexander Dennis, the biggest bus and coach manufacturer in the country, is a huge success story, but nobody is buying buses just now. Without action, hundreds of jobs are under threat across the industry—another disaster for the local and national economy. The changes in road infrastructure and support for active travel that we have seen in recent weeks mean that there is a window of opportunity for the UK Government to take the bold action required and kill two birds with one stone, accelerating the transition from older, more polluting vehicles to Euro 6-compliant diesels and electric and hydrogen buses, and at the same time guaranteeing a future for manufacturers such as Alexander Dennis.
The Transport Secretary spoke last week about 4,000 buses. This is welcome, but completely lacking in the kind of ambition that we need now. A firm commitment from the Government to order at least 10,000 low and zero-emission buses would be a transformational policy, with the potential to be the biggest boost to public transport in generations, and it will help keep skilled jobs in this country in the long term. I urge the Chancellor to sit down with his colleagues in the Department for Transport to make that programme happen and support not just those jobs, but the accelerated transition to a net zero economy. The aviation sector, the bus industry, coach firms, aerospace and engineering—collectively, the UK transport industry is facing an unprecedented and catastrophic future if action is not taken, and taken soon.
Nickie Aiken (Cities of London and Westminster) (Con)
I begin by reiterating my support for the measures that the Government and the Treasury, in particular, have taken in response to this crisis, and none more so than today, with the financial statement. I know that the Chancellor and his ministerial team and officials have worked tirelessly and undertaken heroic efforts to protect millions of jobs.
Thousands of my constituents have benefited from the support available, whether that is residents supported by the job retention scheme or the self-employed income support scheme. A number of my constituents who are self-employed have written to me asking for more help—particularly those who became self-employed in the last financial year—but businesses have also benefited from the grants, loans and relief that have been made available. I particularly welcomed in my constituency this week the amazing announcement of £1.5 billion for the arts. The west end theatres located in the Cities of London and Westminster and the national iconic venues, such as the Royal Albert Hall, the Royal Opera House and the Barbican Centre, will all now benefit, I believe for the whole nation.
The support offered to the theatres is absolutely necessary, but I am sure that Ministers are aware that the local economy also suffers with the theatres being closed. For every £1 spent in theatres, another £5 is spent in the local economy. The fact that theatres remain closed is a continuing issue for the hospitality sector, and the combination of a lack of office workers and a lack of tourism and international visitors in central London means that many businesses are sadly remaining closed. I am acutely aware of the issues in central London. While UKHospitality suggests that nationally, 45% of restaurants and 53% of bars have opened, in central London only 23% of restaurants, 35% of bars and 10% of cafés have done so. Hotels are also particularly bearing the brunt at the moment, with only about 10% to 15% occupancy rates in hotels, and that is a real issue.
I hope that we remain clear that retail, bars, restaurants and hotels are facing issues in both supply and demand, and I therefore warmly welcome the Chancellor’s announcement today on cutting VAT for the hospitality and tourism sectors from 20% to 5%, which is something that I know that UKHospitality and the W1 hotels—the major hotels in my constituency—will particularly welcome. I look forward to taking part in the “eat out to help out” scheme in August—an excellent, unique idea to help restaurants, and I say thank you to the Chancellor and his team for doing that.
Finally, I offer my constituency support for driving the economy back to its full strength. I will be working very closely with the City of London Corporation to demonstrate that London is seen as a resilient and environmentally and socially responsible financial centre for the future, no matter the developing economic situation and, indeed, our relationship with the EU. The City will host a green finance summit in November 2020, which I know the Minister is aware of. I welcome that initiative and hope that it will meet with the support of the House.
The support offered by this Government has been second to none. I hope that it will not end but continue to evolve as the situation becomes clearer, and I look forward to working with the Government to support residents and businesses in the Cities of London and Westminster.
Matt Western (Warwick and Leamington) (Lab)
It is a pleasure to follow the hon. Member for Cities of London and Westminster (Nickie Aiken) and I support her comments about the arts sector.
I am afraid that throughout this crisis, the Government have not really show enough urgency in addressing the emergency. We saw that with the health crisis, and I am afraid we are now seeing that with the economic crisis as well. That is underlined by analysis done by the OECD, which shows that the UK will have the biggest hit of all developed countries—11.5%, far greater than other nations except France and Italy.
The roll-call of job losses is sobering: Accenture 900, Arcadia 500, Airbus 1,700, Aston Martin 500, BA 12,000, Bentley £1,000. That is just the beginning. People’s jobs, livelihoods, families and communities are all affected—no wonder consumer confidence has crashed.
I welcome the Government’s kick-start scheme for young people, and the support for apprenticeships, but I wanted to hear more about an extension of furlough and the reassurance of its continuing—greater flexibility, and particularly support for the self-employed. I did not hear that today. I also welcome the support for the hospitality and construction sectors. The construction sector employs 750,000, I understand, but we heard nothing, and I was disappointed and surprised not to hear anything, of our manufacturing sector, particularly the automotive sector, which accounts for 820,000 jobs in the UK, 170,000 in direct manufacturing—highly skilled jobs, in a sector that helped us through the health crisis earlier this year. It is crucial. We have seen sales down 50% so far this year—30% down in June—whereas France is down 38% this year and up 1% in June.
The reason for that better performance is that France has put in place a greater stimulus package—or rather, a stimulus package—of £7.5 billion, an amount not dissimilar to that of other countries in Europe. Germany’s is even greater. That must be seen against a backdrop of the support that they had in place for some time for electric vehicles and hybrids, including EV charge points, as has been mentioned. That point was recognised by the Committee on Climate Change, which has estimated that we need 29,000 rapid charging points in this country. We have 3,000 at present. France has four times as many. Perhaps one of the most concerning aspects is that the Chancellor has perhaps not recognised the signal that that sends to the global industry.
The Chancellor also referenced fixed costs, and business rates have been mentioned widely this afternoon. Our business rates are 60% more than in, say, France and other countries, which is a huge disadvantage to our businesses. Likewise, our energy costs are 68% higher than the European average, putting our businesses at a huge disadvantage to our European neighbours. It is not just businesses that are affected; there are also costs to home owners and residents.
I do recognise and welcome the green recovery, but £2 billion compared with France’s £14 billion or Germany’s £36 billion is a pittance. I would have liked to see much more ambition in that sector. I would also have liked to see moneys for sectors such as our nurseries and money for our local authorities, which are hurting so greatly.
I welcome the support for young people, for the hospitality and construction sectors, but I wanted more for manufacturing; we need it. We need to safeguard all those high-quality, valuable jobs in sectors such as automotive. Confidence is low in this Government, but seriously, our public confidence in the economy needs restoring. Today was an opportunity to put the key in the ignition and get the economy motoring again. Instead, I am afraid that the Chancellor has stalled.
Caroline Nokes (Romsey and Southampton North) (Con)
It is a pleasure to contribute to this afternoon’s debate. I pay tribute to the measures that the Chancellor announced. My right hon. Friend has worked incredibly hard to ensure that we get the economy moving again. I do not see an economy that is stalling; I see some real efforts to put drive behind it and make sure that we can come out of the pandemic in good shape.
However, we do need to build the economy for women as well as men; for young, as well as old; for those from all parts of the United Kingdom, all ethnicities and all religions. Surely part of levelling up means that we must make it better for absolutely everyone. If covid has taught us one thing, let it be that when we pull together, we can get real action and the strength of community that all of us have seen in our constituencies.
I absolutely welcome the news on apprenticeships, which are such a key part of making sure that young people get into their first job and develop a trade, and are able to progress in their lives. I absolutely endorse the measures that the Chancellor has announced. But this has to be about reaching across the age range and across the gender divide, so we need more to help those women who might come out of this pandemic in worse shape than they went into it. We need to help them retrain, upskill and find new parts of the economy that they can work in. I pay tribute to the Government’s record. We went into the pandemic with female employment at a record higher—higher than it had ever been in my lifetime—but we must not see that go backwards. We already know from the Institute for Fiscal Studies that woman were more likely to be furloughed during covid and are more likely to be in parts of the economy that remain shut down.
It would be remiss of me, after a week of discussing this subject, if I did not draw the Minister’s attention to the beauty industry, a sector that remain shut down. It employs 370,000 people, the vast majority of whom are women. They have asked me to point out, time and again, that they are the entrepreneurs. They are the women who have learnt a trade, built their own businesses and gone on to employ others. They have taken risk by renting premises, and in some instances they are still having to pay rent while those premises remain shut down. I do not speak just for beauticians; I speak for those practising complementary therapies, and for yoga instructors, dance instructors and those working in sectors that help our wellbeing, ones that we may well want to turn to when lockdown is finally relaxed in its entirety. I was cheered by the comments of my right hon. Friend the Prime Minister earlier today when he gave some indication that we might expect an announcement—we hope, fingers crossed—later this week. It is high time that these people were given something to work for—an opportunity to start building their client list back up and an opportunity to make appointments. If not, I respectfully ask the Minister that he make some representation asking for additional fiscal support for them, because they are really struggling and want some hope.
In the 45 seconds I have left, I wish to echo the comments of the hon. Member for Warwick and Leamington (Matt Western) on childcare. I lobbied Treasury Ministers before this statement to say that we needed help for that sector. I appreciate that the sector has had support from the 33 hours offer, but the sector goes into the relaxation of lockdown having to make social distancing changes in premises and possibly having to reduce the number of spaces that can be provided. That means women may well not be able to go back to work if they cannot find the childcare they need. With schools not open until September, this industry is close to crisis. I just leave that thought with the Economic Secretary.
Madam Deputy Speaker (Dame Eleanor Laing)
After the next speaker, I will reduce the time limit to three minutes, but Emma Hardy has four minutes.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
Thank you, Madam Deputy Speaker. It is a pleasure to follow the right hon. Member for Romsey and Southampton North (Caroline Nokes). I echo the speech she has just given and her comments on the need to support the beauty industry, for which she has been a fantastic advocate, working across the relevant all-party group. She has my full support on that.
I also want to pay tribute to the people of Kingston upon Hull West and Hessle, who have made huge sacrifices during this pandemic. I want to thank all the key workers and everyone in the city for their kindness, commitment and compassion. I also wish to draw the Minister’s attention to the Social Market Foundation report that put Hull as No. 1 in the top 10 of areas that are severely impacted economically by covid-19. Households have already been struggling after a decade of cuts and austerity, and the number of UC claimants has already increased. Before we can talk of levelling up, we must protect what we already have.
The good news is that the Chancellor could use this as an opportunity to build back better, build back brighter and improve the lives of everyone across the city and in Hessle, if he so chooses. We could look to clamp down on poor working conditions and poor tax practices, and encourage businesses to hit environmental targets. Our city does not want charity; we want the help to help ourselves and fulfil our huge ambitions, including that of being the green energy capital of the UK. The alternative is yet another lost decade.
I will give the Minister a very short list—or a very long one, but in a short time—of areas in which he needs to consider investing. I start by inviting him and everyone to join in my love of the caravan industry. We are looking at 2,627 jobs in manufacturing. I am sure that he is already fully aware that Hull is the caravan-building capital of the United Kingdom, and that 90% of static caravans are built in Hull and the East Riding. On this issue, I speak with cross-party support. The hon. Member for Beverley and Holderness (Graham Stuart), the right hon. Member for Haltemprice and Howden (Mr Davis), my hon. Friends the Members for Kingston upon Hull North (Dame Diana Johnson), and for Kingston upon Hull East (Karl Turner) and I speak with one voice when we ask for specific support for this industry. I heard what the Minister said about not extending furlough, but something else needs to happen. I accept that furloughing cannot go on forever, but as I tried to explain in my earlier intervention, we are talking about an additional four months. This industry will be booming again come springtime when people want their staycations and their caravan holidays. All it needs is help to get over the winter hump. I say to the Minister to please look at that again.
I was disappointed with the reply to the letter on Hull Trains. How can it be that we are looking at potentially losing our direct rail link from Hull down to London after only having it for 20 years through open access? This would not be happening in any other part of the country, and it is appalling that this has been considered for the City of Hull and the wider area, all because it happens to be open access and therefore cannot access the same support. I have here a letter that was written on 30 June to the Minister of State for Transport, the hon. Member for Daventry (Chris Heaton-Harris), the reply to which is extremely disappointing. If we want private-sector investments in our city then we need that direct rail route. We cannot end this crisis in a worse state than when we first started, so please look at that again.
Let me also mention beauty therapists, tattoo parlours, yoga studios and everyone else across the city. The Deep, which is the only aquamarine submarine aquarium in the United Kingdom—all are welcome to visit when it reopens—requires support as well. It provides specialist world-leading marine research. It needs additional support to get going. I also want to briefly mention Charles Cracknell and the forgotten young people whom he represents. Young people doing start-ups have been let down and have fallen through the gaps in the system. I shall continue my list, I am sure, through written questions and letters to the Minister and hopefully I shall receive some good responses.
Daisy Cooper (St Albans) (LD)
I shall use my three minutes to talk about three of the essentials in life: jobs, homes and pubs.
First, on jobs, before covid, the creative industries were worth £100 billion to our economy every year and were one of the fastest growing sectors. Many of the 3 million who have been excluded from Government schemes are freelancers in the creative industries. The creative industries also lose out on £55 million every year because of how the apprenticeship levy is structured. It is too rigid and does not respond to this flexible dynamic industry. I urge the Government to reform the apprenticeship levy, so that it supports the ecosystem of freelancers who serve the sector as a whole.
Secondly, on homes, I welcome the plan to start insulating homes, but we must also make them safe. I say this as a member of the Fire Safety Bill Committee who has been looking line by line at the first piece of post-Grenfell legislation. We need a much higher level of ambition and funding to make homes not just warm, but safe, and I encourage the Minister to look at creating some of the very first new jobs and apprenticeships in the fire safety sector, so that homes can be warm and safe.
Thirdly, on pubs and restaurants, as the MP for St Albans, I will never tire of saying that we have more pubs per square mile than anywhere else in the UK and I will use every opportunity to remind the House of that. I welcome the VAT cut that has been announced today, but we also need to turbo-charge the business rates review. We must level the playing field on VAT for the long-term between the on-trade and the off-trade. I urge the Minister to keep an open mind on one-off, tailored, bespoke extensions of furlough where it is needed, because some of our pubs are being asked to renew leases for five or 10 years. They need to know that they have the Government support to make it through to next spring. Finally, I urge the Government to publish the long-overdue code of practice for the leased pub industry that has been promised.
Greg Smith (Buckingham) (Con)
It is a pleasure to follow the hon. Member for St Albans (Daisy Cooper). It is rare for a Conservative to agree with a Liberal Democrat on much, but I agree with her on pubs. Even before covid, too many of our pubs were shutting down, particularly in village communities and small towns, with the Bell at Bierton and the George and Dragon in Princes Risborough in my constituency being two examples. I hope that all our local pubs will take part in the “eat out to help out scheme” and that we will all encourage our constituents to use village pubs and town pubs, as well as local shops and businesses. Now that they have reopened, it is crunch time, and if we want them to have a prosperous future, it is vital that we all support them.
I very much welcome the announcements made by the Chancellor today. This is yet another set of unprecedented measures to support our economy, retaining jobs and creating new ones, while ensuring that there are opportunities for young people in particular to enter the workplace and learn the skills they need. It is vital that we get our economy moving again at speed and, as the Chancellor said, return our public finances to a sustainable footing. Jobs are critical to both those outcomes, for the financial security of individuals and families and the flow of revenue into the Treasury. As the Chancellor prepares for the autumn Budget, I urge him to ensure that we keep taxes low on both individuals and businesses, because no high-tax economy has ever successfully come out of a financial crisis.
I have one particular ask for my constituency. We are lucky to have two key hubs of technological innovators that are already creating the jobs of the future. They are part of the Aylesbury Vale enterprise zone, and the sites at Westcott and Silverstone Park are critical for our continued economic growth. It is because of their enterprise zone status that they have been so successful and instrumental in attracting inward investment, but that status is due to expire in March 2021. As businesses consider whether to invest, it would be life-changing for that enterprise zone status and tax relief period to be extended by at least a year, or perhaps through to 2024, to ensure that they can be part of the future prosperity of Buckinghamshire and the wider UK economy.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
We are undoubtedly in unprecedented and challenging times, and although today’s announcements by the Chancellor are welcome, they do not go anywhere near far enough. While the support provided through the Government’s furlough and other schemes has been welcome, there are still as many as 3 million people in the UK who are missing out on an income through no fault of their own and are being left behind by this Government, with many struggling to feed their families. In his statement, the Chancellor said to businesses,
“if you stand by your workers, we will stand by you”,
but he needs to stand by those who are excluded, such as new starters, freelancers and the self-employed people who have fallen through the gaps in the current schemes.
We also heard nothing from the Chancellor about what financial support he will offer to people who are asked to self-isolate as part of the test and trace procedures. For these schemes to work properly, people need to know that if they self-isolate, they will have proper, realistic sick pay or financial support to feed their families. There are businesses in my constituency and across the country that are suffering and may never recover if the financial support they need is not forthcoming. I urge the Government to commit to revisiting the parameters of the schemes now, so that nobody affected will miss out during these most difficult times.
As my hon. Friend the Member for Rhondda (Chris Bryant) said, the floods caused by Storm Dennis in February caused millions of pounds of damage in his constituency and mine and across the country. The Prime Minister committed to me at PMQs on 26 February that funding would be “passported through” to Wales to assist in the rebuilding of infrastructure damaged by floods. The Welsh Government have worked with local authorities, including Merthyr Tydfil, Caerphilly and Rhondda Cynon Taf County Borough Council—the most affected areas—and others to gather evidence on the scale and cost of the damage. That has been submitted to the Treasury for a bid under the UK reserve, yet no answers have been forthcoming from the Treasury.
The floods were unprecedented, and our councils could never be expected to cover the costs without support. While the Welsh Government have stepped in, they have also been subjected to huge austerity cuts from the UK Government, so the support they can offer is limited. Can the Minister give an undertaking this afternoon to provide an update—either here today or in writing later—on when the UK Government will deliver on the Prime Minister’s commitment to support Welsh communities? If the Union is to mean anything, the support must be forthcoming. The strength of our Union is highlighted when we support each other in times of need.
Time does not permit me to go into the next thing that I wanted to talk about, which was the shared prosperity fund, but I will say briefly that we have waited since 2018 for a consultation on how this fund is due to work and what share of it Wales will get. I urge the Minister to take note of that and ensure that we get clarity on the shared prosperity fund as soon as possible. With only four seconds left, I ask the Minister to take note of those comments.
Richard Fuller (North East Bedfordshire) (Con)
It is a pleasure to follow the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones). In a debate whose title is about the economy, too much of it has seemed to be a game of Top Trumps where every fiscal measure announced by the Government is met by a demand for them to do more—too frequently without regard to whether that will help and too frequently with little understanding of how to implement it in any case, so perhaps I can remind the House of two important things.
First, the growth of the economy relies on the private sector—its decisions, its actions and the risk taking by our private businesses and our private sector. The role of Government is to incite and encourage the private sector to act to preserve jobs. Secondly, I remind the House of the limits of Government in the economy. It is well accepted that the role of Government in public health is to mitigate public health risks, not to eliminate them entirely. Therefore, the Government should be on the front foot to reopen our economy at every possible opportunity.
We should also bear in mind the limits of Government in the capacity of international capital markets to accept borrowing. It might be of interest to hon. Members to know that the quantitative easing launched by Governments around the world so far this year is equivalent to $6 trillion—equal to half the amount that was put into public markets between 2009 and 2018.
There is a limit to what Government can do in the economy in fairness to generations to come. We should not be in the role of passing on debts—enormous debts—to future generations to pay off. Furthermore, there is another limitation that we should all be aware of: the competence of politicians and the state in doing what they promise to do. Government work essentially as a big beast with a big foot in a complex jungle. Sometimes, when they put their foot down, that footprint can have big impacts on the smallest businesses in our community.
In my constituency, small businesses are yearning to be open and yearning to grow again. I applaud the efforts of my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) in her campaign to open up beauty clinics and the beauty sector. That is something the Government should be doing as an absolute priority, and it would be welcomed in my constituency.
My constituency has many freelancers and company owner-directors. I say to my hon. Friend the Minister, who has done an absolutely fantastic job in responding to MPs from across the country, please, please, please bear in mind the impact of Government policies on freelancers, particularly in the entertainment and theatre sector, by coming up with a specific date on which the theatre and live entertainment sectors can reopen.
Finally, it is important that the Government move forward on their reforms to how they deliver what they say they are going to do.
Bim Afolami (Hitchin and Harpenden) (Con)
Like everybody in the House, I welcome the Chancellor’s statement, and I think it is worth considering that we have a twofold economic problem here, which we will have to deal with over the next few months. The first difficulty is one of demand, as there is a chronic demand shortage. The Government have done their best to stoke and increase demand over the summer and autumn, and I think those measures will be successful, but there are other fundamental structural problems with the economy that this crisis has shown us.
One is accelerated technological change on the high street in retail, and in automation in the industrial sector. The second is skills. We talk about building infrastructure, building back better and a green recovery. None of those will matter—all the money from the Government will not deal with the problem—if we do not have people with the right skills who can do the work.
The third structural problem we have is within our financial sector, with companies not having sufficient equity, or rather having too much debt, so that when the crisis is behind us they will not be able to grow sufficiently fast. Again, that is a structural problem with the economy.
There are three things that the Government and the House should consider over the coming months. First, while the crisis is here, we should maintain a loose fiscal policy and loose monetary policy. That is very important, because there needs to be sufficient demand growth over a sustained period of time for businesses to expand with confidence and not think that it will be pulled away in a couple of months’ time. For them to expand with confidence, there needs to be sufficiently loose monetary and fiscal policy. If they can do that, spending will grow robustly enough for there to be demand to create private sector jobs without subsidy from the public sector over the medium term.
The second thing we can do is adapt our financial system to make sure we can get more equity into businesses and reduce the debt burden. I have proposed certain things in work I have done. The Chancellor referred earlier to my work “Unlocking Britain”, which discussed how we can recapitalise the SME sector. Something like that needs to happen within our financial system so that we can reduce the debt burden for companies to give them equity so that they can grow.
The third thing, which connects with skills directly, is that we need to improve the ability of labour—people—and capital, money, to move from sectors and companies that are declining into those that are growing and have the potential to power forward our recovery. Those are the measures that the Government need to consider in the months to come.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
I add my voice to those who have pled for more attention and assistance to be given to freelancers. As the hon. Member for North East Bedfordshire (Richard Fuller) said, they are one of the most significant remaining pieces uncared-for sectors in our economy, which requires urgent attention.
Earlier, I welcomed the cut in VAT for the visitor economy. It is disappointing that it is only for six months at the moment. I do not wish to appear ungrateful for that, but the opportunity we have with those six months is that we will have substantial data to know what the effect is. When I was in the Cabinet, we cut the rate of spirits duty by 2p. Despite the Treasury predictions that that would bring in a much lower take for the Treasury, in fact the cutting of the duty brought more revenue at the end of the day. Studies in the past—I confess that I can occasionally be sceptical of studies of this sort—would claim that the take from the visitor economy would be greater with a lower rate of VAT. We will now have the data against which we can measure those claims, and I hope that work will be done in the Treasury.
It seems that the debate is passing on to the next phase, about how we reopen and re-grow our economy. That is difficult in every part of the country, but none more so than the highlands and islands. We need a return to having an economic development force within the highlands and islands with the same vision and purpose that the Highlands and Islands development board had when it was set up by the Wilson Government in 1965. It had access to Government and all the opportunities that could come from the force of the public sector, but added to that, it had the force, vision and experience of business. That was more or less what we got with its successor body, Highlands and Islands Enterprise, but the current Highlands and Islands Enterprise is a sorry shadow of what it used to be.
That issue has been an increasing problem for businesses and economic growth in the highlands and islands for years now, and this is the moment when we have to say, “Enough is enough.” Within the highlands and islands, we need a significant body that has clout and access to Government and can bring the resource of the public sector, but spend it in the way that business and the private sector know is necessary. Without change of that sort, from here and from Edinburgh, we will miss the opportunity to regrow the highlands economy in the way that we know is necessary.
Richard Drax (South Dorset) (Con)
It is a pleasure to take part in the debate. I pay tribute to my hon. Friend the Member for North East Bedfordshire (Richard Fuller), who spoke with such common sense. In the short time I have, I will concentrate on the self-employed, the financial world and all the businessmen and women who risk everything to create the wealth and prosperity that we need.
I repeat from Dorset business to the Front Benchers and the Treasury: thank you very much indeed for all the furlough scheme and the announcements made today. The thanks I receive is unanimous—despite what we may hear in other quarters, not least the media. People are extremely grateful for the thousands of jobs in South Dorset that are being saved and for the millions of jobs that are being saved around the country.
Today’s announcement is especially good news for the young, who face threats from this covid in getting into work—my own children included, of course, who are facing the same problem. I welcome that announcement, and the announcement for the hospitality sector, which in South Dorset in particular has been hit hard, because we rely so much on tourism and hospitality to make the economy go around. I will also touch briefly on taxation and the private sector, our armed forces if I have time, and Dorset Council and police if I have a little more time.
Never, in my view, has there been a better opportunity radically to overhaul the taxation system in this country. It is outdated, punitive and bureaucratic. I welcome the announcements made today on VAT and stamp duty. That is a start, but let us get rid of them altogether. Let us go much further—capital gains tax, inheritance tax. Look where our poll rating went when, if I recall correctly, George Osborne raised the threshold to £1 million. It is people’s money, and we have no right to take money off people unfairly.
The economy will only work if we allow the entrepreneurs, the businessmen and women, the financial sector, the self-employed and everyone else that my hon. Friend the Member for North East Bedfordshire mentioned to generate the wealth that we need. From the Opposition Benches, it is the classic old, “Let’s tax them and tax them.” They simply do not understand, and never ever will, that all those risking their homes, their livelihoods and their families generate the wealth that this country needs to generate the wealth, prosperity and jobs that pay for public services.
Chris Loder (West Dorset) (Con)
Does my hon. Friend agree that in constituencies such as mine, where 97% of businesses are micro and small-sized, such businesses should absolutely be at the forefront of what we do?
Richard Drax
I entirely concur with my hon. Friend and neighbour in West Dorset—I welcome him to his place.
I have time quickly to mention the armed services. The covid crisis has shown how professional, dedicated and truly treasured the armed services are—in addition, of course, to all those who work in the NHS, to whom I pay equal tribute. We must never forget that the armed services need to be funded properly, and in my view 2% of GDP is not enough; we need 3% or 4%. I urge the Treasury to keep fighting on behalf of those whose serve us with such distinction.
On Dorset Council and police, both face huge extra costs because of covid and the hundreds of thousands who descended on our beaches and coves over recent weekends. Dorset Council estimates that it is spending about £50 million a month on covid provision. It has done an outstanding job, and I pay tribute to Dorset Council and to Dorset police for the selfless way in which people have worked over many hours and many weekends for no extra pay. I thank them all.
I will end by saying, we locked the country down once; I recommend to the Treasury that we never, ever do it again.
Rachel Hopkins (Luton South) (Lab)
Today’s statement on the economy is a clear opportunity to confront some of the vulnerabilities that covid-19 is exploiting, including rising unemployment and the ever-present climate emergency. Without greater and targeted intervention, both those intertwined crises will exacerbate class inequalities and severely damage living standards.
After borrowing “Jobs, jobs, jobs”, the Government’s latest strap line is “Build, build, build”, but that is not enough. We also need to “Make, make, make”, with a hands-on, interventionist approach to manufacturing to stimulate growth in our communities. We need bold, innovative solutions to reinvigorate a greener job market.
Two predominant sectors in my constituency of Luton South are aviation and automotive, and they would both benefit dramatically from a targeted economic strategy that roots a green recovery in our communities to ensure that local people reap the rewards of growth in their area. A 21st century industrial strategy requires an end to economic short-termism and a greater focus on the creation of quality, unionised green jobs.
I am a member of Unite the union, the recent report of which, “Manufacturing Matters”, evidences the need for strategic state investment to reinvigorate the UK’s manufacturing base and create new sustainable employment and education opportunities in our communities. In Luton, this could be represented by additional support for Vauxhall to help its transition towards the manufacture of electric vehicles. Such an approach is not radical; the French Government have already adopted a similar strategy.
Green economic growth must be built into inclusive local economies. Anchor institutions must drive the green transition. Local authorities must be empowered to construct green local infrastructure, including clean local transport systems and electric vehicle charging points. This would create skilled green jobs that are fit for the 21st century.
The Government have a unique window of opportunity to accelerate a green transition in the aviation sector. A targeted economic package would protect thousands of jobs and stimulate a sectorial transition towards net zero. Commitments attached to economic support could include strict time-bound decarbonisation expectations and obligations to adopt cleaner fuels and low emission technologies. A green aviation package would save jobs in Luton during the pandemic while creating a thriving, sustainable job market for future generations.
The UK needs an economic strategy that directly lifts people out of economic insecurity, gives them secure, quality jobs and protects our climate for future generations. This will be achieved only through a state-driven industrial strategy; the market will not deliver it. I urge the Government to put people and their living standards first.
Chris Stephens (Glasgow South West) (SNP)
I see the Economic Secretary to the Treasury in his place; I thank him for his correspondence in relation to the credit union sector. Credit unions are a very important part of financial life these days and I hope he will say something about them in his closing remarks.
The parts of today’s package that will help people to go into the hospitality sector and restaurants and buy meals is all fine and well, but we must also acknowledge that far too many people across these islands cannot afford food—they cannot afford to eat—and if it was not for the charitable sector rising up during this pandemic and providing food and meals for many people, there would have been an explosion in the use of food banks. I hope the Minister will also say something about the support that the charitable sector will receive, because it is an important part of what needs to be addressed.
On the Department for Work and Pensions package, I am still hoping we will get an answer today on the increase in the number of work coaches. The Department for Work and Pensions has said that it needs 30,000 additional staff to process universal credit claims and make sure that people are paid on time, so I would like to know if the announcement on work coaches refers to new staff or staff from somewhere else being redeployed. We need to know that and to know genuinely what the package is. We also need to know what training there is going to be for any new work coaches.
I have a real fear and concern that conditionality has been brought back too early, and that is a mistake by the Government. I hope I am wrong, but I think that reintroducing conditionality and the prospect of people being sanctioned from 1 July, as announced by the Department for Work and Pensions, was the wrong move to make.
I join the others from all parties who have mentioned the excluded. I mention in particular my constituent Stephanie Milne, who has written to me. She paid tax for 21 years through pay-as-you-earn and is now self-employed. We must remember that there are people who have been forced to be self-employed. There are people on zero-hours contracts who are not getting any of the support packages that are available. I have a real concern about that; it is the wrong decision.
Lastly, I have received a letter today from David Fulton, the Unite convenor at Thales, impressing on me and the Government how much support is required for the aerospace sector, which is an important sector not just for my constituents but across these islands.
Laura Trott (Sevenoaks) (Con)
It is an honour to follow the hon. Member for Glasgow South West (Chris Stephens).
There is much to discuss about the resilience of the economy, the demand-led recovery and the need for consumption. However, today, I will focus my remarks on women and what else we need to do to safeguard their jobs during this period.
There is no doubt that Government intervention has saved women’s jobs during this crisis. We know that women are disproportionately likely to work in the hospitality sector. We know that parents have been more likely to be furloughed and mothers more likely than fathers. So it is Government action in this area that has really helped women safeguard their jobs and what we saw this morning was that that help will continue.
The jobs retention bonus scheme will be incredibly important to make sure that women’s jobs continue in the aftermath of this crisis. The VAT cap for the tourism and hospitality sector as well as the eat out to help out scheme will disproportionately help women. That is very important and has been overlooked in the narrative we have had to date. So this support will be very important.
What else do we need to do to make sure that women come out of this crisis in a strong position? First, we need schools to go back in September. That is very important, and I am so pleased that the Government have pledged that that must be the case. It must, however, be full-time; we must make sure that all children are going back five days a week, to ensure that mothers and fathers can responsibly go back to work with a commitment that they know cannot be reneged on.
We must also look at whether, in future local lockdowns, we do actually close schools. The evidence is that children are less likely to get the disease and less likely to spread it, so there is a question in my mind, because of the economic recovery, as to whether we need to close schools when we do the local lockdown.
The other point I briefly want to make is about flexibility. The flexibility we have shown during this period has been a lifeline for women and women’s jobs, and I know that many want to see that continue. The model of local hubs, which would enable people to go in and out in a more flexible manner—and which I hope we can pilot in Sevenoaks—will be very important and will help to remodel our economy for the long term.
So I welcome what was announced this morning. It will be hugely beneficial for women in the workforce, and I think we need to ensure that we get schools back and a more flexible economy going forward.
Munira Wilson (Twickenham) (LD)
Although many of the measures announced today are welcome and will help create jobs down the track, there are millions of small businesses and self-employed individuals whose livelihoods are going under today, and these entrepreneurs are the growth drivers of our economy. Today’s statement was a missed opportunity to plug the gaps in the Chancellor’s coronavirus support schemes. The Minister knows very well who these 3 million excluded are. With over 11,000 self-employed in my constituency, I have been inundated with messages from those left out in the cold—heart-breaking stories of ordinary, hard-working people who help to keep our economy and our society ticking, like the single mother of a child with special needs who decided to switch to being self-employed just last year so she could better support her son.
Many of these self-employed individuals and small businesses are in the sectors that will be among the last to recover from this crisis: creative industries, including arts and entertainment; travel; and events companies. Many businesses have inexplicably been asked to remain closed while pubs and others are open. They have already been mentioned today: beauticians in our high streets; complementary therapists; elite gymnastics clubs, such as the Richmond Gymnastics Association; and swimming pools, such as the open-air Hampton pool in my constituency. Not only are these businesses and establishments important to the local economy and at risk of going bust; they also have an important role to play in promoting health and wellbeing.
I want briefly to comment on two sectors. The arts fund announced earlier this week was very welcome, if long overdue and late for many, but it fails to support the highly skilled individuals who make the UK’s world- leading industry what it is: the freelance cameramen and women, make-up artists, costume makers and sound engineers. We cannot afford to lose these skills and small businesses from our economy, and they need support now. Importantly, the arts fund must trickle down to local venues, which are central to our local economies, such as the Landmark Arts Centre, Hampton Hill Theatre and The Exchange in my constituency.
The travel industry will take a long time to recover. Locally, I have a number of small independent tour operators and AITO The Specialist Travel Association, representing 120 members, which employs 4,000 people across the UK. They are not looking for a bail-out. They need a temporary change to the package travel regulations, as many other European countries have done, where Government endorse refund credit notes.
In the short term, these sectors can be enabled to kick-start the recovery now. In the longer term, the Chancellor has talked a good game on green jobs, but his announcement today does not go nearly far enough. We need an ambitious green recovery package that seeks to insulate every home in the next 10 years and massively expand renewable energy and new air quality standards. That is why it is also time that the Government put the final nail in the coffin of any plans to build a third runway at Heathrow.
Robbie Moore (Keighley) (Con)
The Prime Minister and the Chancellor have cast their net wide and far to protect as many businesses and individuals as possible through this covid crisis. Many across Keighley and Ilkley have benefited through the business grants, the furloughing scheme, the business rates holiday, bounce back loans, tax deferrals and much more. I welcome this, and may I use this opportunity to reiterate the words of one of my constituents? Sue Watson Wood, who I saw in Ilkley only last weekend when she reopened her hair salon, Vanilla, told me that the Chancellor’s support provided her with comfort that all would be okay. She specifically asked me to pass on her thanks, so to the Chancellor, on behalf of Sue and many other hard-working businesses across my constituency—thank you.
Tough times require bold interventions, with fiscal policies that drive positive consumer behaviour, and I welcome the Chancellor’s announcements today. I want to see businesses across Keighley, Ilkley, Silsden and the Worth valley thrive, and jobs to be protected. The jobs retention bonus scheme and the temporary cut in VAT for the tourism and hospitality sectors are most welcome. I am sure that the additional boost through the eat out to help out scheme will certainly help.
There is no stronger advocate of Keighley than I. We have some fantastic manufacturing, technology and engineering businesses, passionate people who are proud of what we in Keighley have to offer and young people who just want to crack on and thrive in life. Of course, challenging times lie ahead, but with the Chancellor’s announcements today on supporting businesses to take on trainees and provide apprenticeships, and the introduction of the kick-start scheme, all of this will help.
Of course, I look forward to developing our allocation of up to £25 million from this Conservative Government to invest in Keighley through our towns fund project, focusing on urban regeneration, improving digital and physical connectivity and, perhaps most importantly, improving skills, innovation and collaboration between the education and business sectors. The great thing is that, under good stewardship, we can use these public funds wisely to kick-start, crystallise and galvanise private sector inward investment into our town. Now is the time to level up and, through good projects, we can use good infrastructure schemes to create jobs, jobs and jobs.
I welcome this Government’s agenda and their economic strategy to bring places such as Keighley, which for far too long have sat in the shadows of Bradford and Leeds, back into the light. I use this platform, and I will of course continue to use it, to keep banging the drum for Keighley, Ilkley, Silsden and the Worth valley and to say to businesses, individuals and investors who want to come to my patch—we are open for business.
Zarah Sultana (Coventry South) (Lab)
Shortly before the coronavirus pandemic hit, I visited the home of one my constituents. She had issues with her flat. When it rained heavily, water came flooding through her roof. Mould was growing on the walls and it was causing breathing problems. She was desperate for help. Members from across this House will hear similar things every single day because, before this crisis hit, our economy was failing working people: 14 million people in poverty, including 4 million children.
Key workers, from shop assistants to delivery drivers and refuse collectors to hospital porters, are on poverty pay. They kept our country running through this crisis, but this country has not been running for them, because while working people have faced a decade of public service cuts, stagnating wages and rising rents, the super-rich and big businesses have enjoyed a decade of tax cuts and corporate giveaways. Their wealth has soared while the majority have suffered. This was the economy before coronavirus hit—rigged, unfair and unsustainable, and charging us towards climate catastrophe, with the Government on course to miss their carbon neutral target by 49 years. We cannot go back to that: it is broken, it is rotten and it has failed.
But the Government are not trying to take us forward—they are trying to take us back to that, with announcements that are nowhere near enough to match the scale of the challenges we face. Three million people are still excluded from Government employment support, unemployment is predicted to reach levels not seen since the 1980s, and Coventry and the west midlands are hit particularly hard. Now is the time to rise to the challenges we face, with ambition that matches their scale, to bring about lasting change, rewiring the economy so that it works for all, with a focus on advancing the wellbeing of people, not endlessly chasing GDP figures.
It is with a bold, green new deal that we can build that economy: building green industries and not just preventing redundancies but creating 1 million good, new, well-paid, unionised jobs; investing in green public transport and making it free to help working people and to cut emissions; embarking on an ambitious plan to insulate millions of homes across the country, cutting bills and carbon; and exploring a four-day working week, with no loss of income for working people, stopping job losses by sharing out work. Polling shows that even Conservative voters think that that should be considered. While we do that, we need to take on the billionaires, dismantle the fossil fuel industry, tax the super-rich, and crack down on the tax dodgers.
Now is the time for bold ideas and bold actions. It is time to build a new economy where our resources are geared to meet the needs of the people, not to make profits for the rich.
Chris Loder (West Dorset) (Con)
Today the Chancellor has put forward another excellent set of measures to help the UK, and no more so than in West Dorset, where 97% of our businesses are small or micro-sized. We need urgent attention to our connectivity, with 1.42 megabits per second broadband speed compared with 200 megabits per second here in London, and single railway lines across the county with a three-hourly rail frequency. Our economy in West Dorset could have its sprinting potential thoroughly unleashed, not only by the measures the Chancellor has announced today but with further infrastructure investment.
The current wave of remote working presents an enormous opportunity for West Dorset. It has shown that business and commerce does not have to revolve around London, or, indeed, other cities. People can be even more productive from their kitchen table in West Dorset than in urban office blocks. Why have conditioned and recirculated air from the polluted cities when you can breathe the fresh air of West Dorset? If sustained, this shift in working habits can be the catalyst in levelling up the rural and coastal communities of this nation, creating many well-paid opportunities for local people—but we need fast and reliable broadband that is accessible at home and at work.
Local enterprise partnerships should be coming into their own at this point, but from my experience in West Dorset, LEPs vary in their capability to deliver any economic benefits through infrastructure investment. May I therefore urge the Minister, perhaps along with his colleagues in the Ministry of Housing, Communities and Local Government, to review the LEPs’ deliverability against their remit and, where necessary, drive the radical reform required to deliver the Government’s agenda?
I welcome the Chancellor’s announcements on stamp duty. However, rural economies are not well served by building enormous new housing developments like the one planned for the outskirts of Dorchester. These developments quash the economic potential of building modest numbers of new houses in our villages, which is what will ensure the future of our local schools, shops, pubs, garages and parish churches.
The economic damage inflicted by coronavirus is indeed tragic, but it now presents us with the opportunity to build back better—to stimulate the economy and to address rural isolation, social deprivation and the issues that have challenged our rural and coastal communities for many decades.
Wendy Chamberlain (North East Fife) (LD)
The delivery mechanism for the furlough and self-employment schemes has been responsive to where the support is needed across the whole of the United Kingdom. I am not happy with the way relations between the Government and the devolved nations have often fractured during the crisis, but no matter how one looks at it, each nation and region of the UK has benefited from the financial pooling of resources.
As a Liberal Democrat, I am very much in favour of devolution and the Scottish Parliament, but if all the furlough and universal credit decisions went across the desk of the Scottish Cabinet Secretary, we would get only a Barnett share—Scotland would get only 8.6% of English furlough money, even if demand were greater in Scotland. The other benefit is the speed of response. There has been no waiting for Barnett consequentials to be calculated and no delay while it is worked out how best to deliver the support.
I ask the Government to publish a breakdown of the amount of money that has been paid directly by the UK Government to people and businesses in Scotland. Making those figures visible will help to inform all Members of this House and those in Holyrood when we debate the merits of the United Kingdom.
Having praised the UK Government for a rapid response, I will now talk about things that have been anything but quick. I must express my disappointment at the length of time the Treasury has taken to respond to cases that I have raised on behalf of constituents. To give one example, back in early April I was contacted by a new starter at a small business in Auchtermuchty. His contract started on 29 February, which meant he was ineligible for furlough. As such, he faced having no income and no support. He is one of the excluded that the new APPG chaired by my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone) is looking to support.
On 14 April, I wrote to the Chancellor to raise the specific details of my constituent’s case. I heard nothing back until two months later, when I was sent a “Dear colleague” letter that had already been sent to me in lieu of a specific reply. After chasing up twice, I received a further unsatisfactory response from the Government today during the Chancellor’s statement.
It is MPs who people go to when there is nowhere else to turn. Frequently, it is when people have tried to navigate the often bureaucratic and complex structures of Government agencies and heard nothing in response. I am particularly conscious that we are approaching a six-week recess, during which the furlough scheme will continue to taper off. The Chancellor described this earlier today as a “difficult moment”. It is not a difficult moment, but a difficult few months. The recently announced job losses are clearly just the start.
So yes, swift support from the Government is important, but for those who cannot access support and for those who get in touch with us as Members of Parliament, we need to be in a position to relay those difficulties and problems back to Ministers, and to hear back from them in turn. I hope that the Government can offer some reassurance on this matter.
Suzanne Webb (Stourbridge) (Con)
I will keep this short and sweet, Mr Deputy Speaker, as time is precious and you do not need me to reiterate what we know is a bold and decisive plan—a plan for jobs; a plan with people and their livelihoods at its heart.
The Chancellor has yet again acted with a keen eye to preserving employment and our fiscal and economic capacity. As we recover from covid-19, the No. 1 priority of the Government has always been to protect jobs. Just as the virus scythed through society and did not articulate who it was going for, any economic impact will cut deep swathes. It will not discriminate; it will cut across us all. What we must remember is that this time it is not an endogenous shock triggered by huge imbalances; it is not man-made, as it has been in the past by Labour Governments. This is a slowdown necessitated by covid-19 and we have seen decisive action by this Government, who for the last few months have given us stabilisers to protect our livelihoods and who now recognise that we need to get the economy back into a higher gear.
My No. 1 priority as the MP for Stourbridge has always been to protect jobs. As a youth in the early ’80s, I saw the impact of unemployment on young people. That, combined with my strong belief in the nobility of work, means that I am over the moon about the Chancellor’s kick-start scheme, which will give 16 to 24-year-old youths the best possible chance.
I make an unabashed plug to get nail bars and beauty salons open. They are often run by people who have been on traineeships themselves and who now run their own businesses, proving that traineeships work—they are capitalists at their finest and of the future. Please, let us get them open.
This Government are giving us the tools to enable, facilitate and empower us all. The virus is not of our making, but we must make the best of it. We must be transformational and dig deep in the spirit of entrepreneurism. If you cannot sell it, online is your new high street and your new export opportunity. This is about being entrepreneurial, about foraging for opportunities and of course about jobs, jobs, jobs. This has been at the heart of my recovery plan for Stourbridge. I also welcome the joint announcement today from Andy Street and the Department for Work and Pensions that youth hubs will be set up, helping to join up local employment and training services and to ensure that they are targeting young people. This builds on the already great work being done by our jobcentres across the west midlands.
The Government’s support throughout the crisis has been decisive, and it will be a major factor in how we will come out of this period It is clear from the actions that the Government have taken that they are not a Government who leave people behind. They are a Government who put people and their livelihoods at their very heart. However, this will depend on our shared responsibility to contain the virus and, of course, on whether a vaccine—
Caroline Lucas (Brighton, Pavilion) (Green)
Three minutes: so just three short points.
First, I want to add my voice to all those urging the Government to plug the gaps in the self-employed support scheme. In Brighton this is a massive issue, particularly in the creative and arts sector. Of course we welcome the funding package that was announced earlier in the week, but we need to fund the people who work in that sector, not just the bricks and mortar and the infrastructure, so I ask the Government: please listen to all those people on both sides of the House who want to see those gaps plugged and also please take a sectoral approach to the furlough scheme so that it can be maintained in those sectors that cannot yet safely open.
Secondly, the statement as a whole was, sadly, far too much about propping up the housing market, ignoring renters and creating low-paid jobs. It is about consumption at any cost and it is doing far too little on climate and nature.
Thirdly, the so-called green recovery is a drop in the ocean of what is needed. Yesterday, the New Economics Foundation released a new report that showed that by investing £8.6 billion a year in whole-house retrofit, we could create more than half a million jobs, reduce household emissions by more than 20% and cut affected household bills by £418, all within the remainder of this Parliament. That is what an energy efficiency programme worthy of the moment would look like.
It is a similar story for nature. There is some recognition of the challenge, but a complete failure to grasp the scale required. The £40 million for nature-restoration jobs might sound good, but let us compare it with the last 10 years of cuts to our nature agencies. It is a sticking plaster that will not arrest the decline of our natural world. In 2009, the core funding grant to Natural England was £212 million; 10 years later, it was just £60 million. That is £150 million less for nature protection each and every year, which is more than three times the total allocated to the green jobs challenge fund today. The sums announced are so out of step with the challenges we face that some are even questioning their lawfulness. The Prime Minister and the Chancellor will no doubt have received Plan B’s letter before action.
Any progress is still dwarfed by public money for fossil fuels. We cannot put out a fire with one hand while still pouring petrol on it with the other, yet that is what the Government are doing, through the £27 billion road building schemes, the blank cheque bail-outs to airlines and the public money funnelled into fossil fuel projects overseas. It is time for a line in the sand. The Government should commit that not one penny more of public money will be spent on propping up the fossil fuel economy and fuelling the climate emergency.
Yesterday I presented the Decarbonisation and Economic Strategy Bill. It was put together by the hon. Member for Norwich South (Clive Lewis) and myself, and it is the first ever attempt in the UK to legislate for a green new deal. If the Government are struggling to grasp what a commensurate response to our challenges looks like, I invite them to take a look at the work that has already been done. It is, some might say, oven ready.
Stephen Flynn (Aberdeen South) (SNP)
I rise to partake in this debate in frustration, because at the start of March I highlighted in the Chamber during the Budget debate the fact that the oil price had collapsed and that the Government needed to provide support. Obviously, we then went into lockdown and the price collapsed even further. I raised concerns in the only way possible at that time, by writing directly to Ministers on numerous occasions, and I joined my colleagues, my hon. Friends the Members for Aberdeen North (Kirsty Blackman), for Gordon (Richard Thomson) and for Angus (Dave Doogan), to do likewise. I have raised the issue at every possible occasion in the public domain. I raised it in the Public Bill Committee during the passage of the Finance Bill and I raised it in this Chamber last week and again earlier today, yet still there is not a word from the Chancellor in respect of an oil and gas sector deal. I cannot describe how frustrating that is in a manner that would not get me into a lot of trouble with you, Mr Deputy Speaker.
The reality is that the sector has put £365 billion-worth of income into the Treasury. This is not just about protecting the jobs of the individuals in the sector at this moment in time; it is about what comes next. It is about being able to reach net zero. It is about being able to create an sustainable energy future for Aberdeen and for Scotland, be that through the hydrogen backbone across Europe, through an energy transition zone, or through the Acorn project on carbon capture and underground storage. So much could be announced, but to date the Government have continued to sit silent. The consequence of that has been job loss after job loss after job loss, and it is my constituents who are having to face that harsh reality.
On top of the challenges in hospitality and tourism, and all the other challenges that everyone else has in their constituency, the challenge facing Aberdeen because of the downturn in the oil price is huge. It is time for this Government to step up to the plate. I am fed up with asking them to deliver. What I am asking them to deliver on is their own manifesto commitment, nothing more, nothing less. They need to step up to the plate and do it now. If they do not, they need only look at the polls from Scotland to see that the tide is turning. The people of Scotland’s eyes have been readily awoken to how shambolic this UK Government are, and if they continue to ignore our needs we will respond accordingly.
Jack Brereton (Stoke-on-Trent South) (Con)
Businesses in my constituency are overwhelmingly grateful for the excellent support put in place by the Chancellor and this Government. We must recover as soon as possible, because under the pre-pandemic conditions we were moving forward, not least in Stoke-on-Trent, which was on the up after decades of slow decline. Local manufacturers are only too eager to create the high-skilled, high-paid jobs our communities need. I am particularly pleased by measures announced today by the Chancellor to support young people into employment, apprenticeships and training. I know that this Government are committed to levelling up, and Stoke-on-Trent is an area that absolutely embodies that agenda. More to improve bus services, help for our high streets and a town deal would be particularly welcome.
I am delighted that my proposals to reopen Meir station have got backing in government, but rather than take each funding project in turn, I have a general point to make. I offer this helpful insight as I am passionate about levelling up and about getting the maximum economic return by releasing the greatest unrealised potential. Too often there has been something like a 25% local contribution rule, which makes it pointless to bid, because we could never afford it, so funding schemes that were supposed to help places such as Stoke-on-Trent will instead go to places that can afford to pay. These areas have the means to make schemes shovel-ready, whereas many of the local areas we seek to level up have had to prioritise resources elsewhere long ago. I ask the Government to look carefully at how we can help make schemes shovel-ready in places such as Stoke-on-Trent.
North Staffordshire is one of the largest conurbations, at the heart of the country, plugged into a world of interconnectivity. Thanks to the support of Government and the city council, as I speak LilaConnect is laying a new full-fibre network in Stoke-on-Trent, providing direct fibre to homes and businesses that is more advanced than that anywhere else, promising up to 1,000 megabits per second. If we get it right, no city is keener to build, build, build than Stoke-on-Trent. Prior to covid, property prices were rising healthily and developers have told me that demand was high. However, low property values have often caused viability constraints locally. We have plenty of brownfield land ripe for development, but the cost of remediating the sites is often prohibitive. It has been necessary for Government to step in to stimulate those more challenging sites and work with the local city council.
Advanced manufacturing, digital and logistics are all strengths in Stoke-on-Trent and they will be key sectors in our new economic future, removing the hurdles and unlocking the potential that has been constrained for far too long. The more skilled, better-paid jobs we create locally, the more houses we can sustain and the greater the national contribution we can make. We just need a helping hand from national Government to give us a really good start.
Nick Smith (Blaenau Gwent) (Lab)
This pandemic is hitting Blaenau Gwent hard. Its shockwaves are shaking our south Wales valleys now. An entire shopping centre is under threat. A logistics centre that supplies the drinks industry is facing redundancies. Our small-town high streets are under big pressures. Care workers are under the cosh. These heroes have put their lives on the line to look after our loved ones, but now some of them are seeing their hours cut, and others are losing their jobs completely. The whispers and rumours of redundancies are back, and while things are so uncertain, this will keep on happening.
The valleys have seen this before. People in my constituency remember the 1980s, when pit and steel closures hugely impacted our communities. We know how important early investment is during tough times. In 2018, the Government promised to launch the shared prosperity fund, but we are still waiting for it. That pot of money could help Blaenau Gwent to rebuild following this period of uncertainty. It could help to revive our economy, which is facing the threats of these dark times. It would build vital infrastructure, giving us the good-quality roads and the rail tracks that we need. We have waited too long for this fund. The Government need to step up and give us this detail as a matter of urgency.
We also need to invest in young people. Dubbed “generation covid”, they are facing the toughest job market in decades. The kick-start scheme is to be welcomed. At first sight, it resembles Labour’s successful future jobs fund, and I am glad that it is being revived. In Ebbw Vale in my constituency, Cyber College Cymru offers young people future-proof training in this growing sector. The project links up with major employers, helping young people to gain the work experience they need to get into the jobs market. It is a shining example that should be replicated across the whole country. Young people need these opportunities straightaway. Neither they nor our economy can afford to wait. Blaenau Gwent and its young people need a helping hand now—let’s get on with it.
Julie Marson (Hertford and Stortford) (Con)
Right now, the FTSE 100 is stacked with establishment companies that will rally once the covid crisis eventually subsides, but it will not be those industries that provide the high-growth success stories of the next 10 or 20 years. The highest growth will come from fledgling, disruptive sectors just entering their growth phases now or not even yet created. The development of our highly successful start-up ecosystem, which houses the world-leading sectors of tomorrow, such as FinTech, green energy and automation, will be essential to our long-term global competitiveness and prosperity. I would love to see an extension of the Government’s existing commitment to support those industries, at the pre-seed, seed and series A levels.
When the Government introduced the growth accelerator programme in 2012, I do not expect that even they imagined how successful it would be. The 18,000 businesses that participated in the scheme achieved growth that was, on average, four times faster than that of a typical small and medium-sized enterprise, and the programme added at least £1 billion to the British economy. I hope that the Government will consider a scheme like this as they evaluate where our future growth lies and what initiatives will best suit the long-term needs of our country. Back in 2012, this £200 million programme delivered a return on investment of at least 700%. Amended for today and focused on specific high-growth, high-opportunity sectors, with provisions made for regional business, the ROI could be even higher, and it could create even more jobs than it did before.
We have already seen the potential that can emerge when we diverge from London—for example, through the innovation corridor, which runs through my constituency of Hertford and Stortford. We can build on this success. As we look to long-term growth opportunities, I hope the Government will build on their brilliant work by investing in skills clusters across the UK, to drive public and private investment in left-behind regions.
To conclude, the Chancellor and the Treasury team today have been hugely bold, and I enthusiastically applaud them. During this crisis, the heroes of our country have been our doctors, nurses, carers and key workers. In the recovery stage and beyond, it will be the businessmen and women driving growth for their companies and helping the economy back to health. Our job in this place will be to provide the platform for this next set of heroes to carry our economy forward.
Rob Butler (Aylesbury) (Con)
We are here to talk about the economy and the economy means numbers. In Aylesbury, 14,500 jobs have been protected by the Government’s furlough scheme and almost 5,000 local people have benefited from the self-employed income support scheme. That is good news. However, there are worrying numbers, too. Not everyone has been able to access Government help and jobs have already been lost. The unadjusted claimant count in Aylesbury in May was two and a half times higher than in March, and in the 18 to 24-year-old age group the rate of increase in unemployment was even greater. That is why the kick-start scheme announced today by the Chancellor will be extremely welcome in my constituency, as will his entire plan for jobs, jobs, jobs.
Behind the numbers are the names: the people who have continued to work throughout the coronavirus crisis to help to keep the local economy on its feet and prepare it for the future. People like Diana Fawcett, the town centre manager, who has inspired and assisted the market stall holders and independent traders, many of whom have benefited from the bounce back loan scheme. The people who have continued to invest, ready for the return of a more normal life. People like Karman and Greig at the Harrow pub, who served takeaways so they could afford to redecorate and draw in new customers, and who will now benefit from the VAT cut on hospitality and “eat out to help out”. Or Ben Moult, who has seen a gap in the night-time economy and converted a clothes shop into a restaurant with Buckinghamshire’s first roof terrace bar. Or councillors Bill Chapple and Steve Bowles and the teams they lead at Aylesbury Garden Town, which promises to be smart, sustainable, accessible and inclusive. Or students at Aylesbury’s university technical college, who will be the next generation of apprentices bringing much needed vocational skills to construction and computing.
There is a theme underlying those numbers and names: a theme of resilience and readiness for the economic challenges ahead. Thousands of houses are planned locally which will contribute to the Prime Minister’s ambition to build back greener, with an eco-friendly approach to help answer the concerns of the passionate campaigners from last week’s “The Time Is Now” mass lobby. The local plan already embraces the change heralded by the new planning regulations announced last week, which will transform our town centres into community hubs where people want to live, work, visit and invest.
To make all that a reality requires, yes, infrastructure funding from central Government to get our traffic flowing and ensure we have the schools and the health centres we need for our fast growing population, but our economy is not just about money. For our future success we need a spirit of entrepreneurship where risk-takers are rewarded. We need bold thinkers with imagination about what our towns are for. In Aylesbury, we have them. In Aylesbury, we stand read to be at the forefront of initiatives to build a new economy.
Jim Shannon (Strangford) (DUP)
Three points made very quickly.
First, I want to plug the charity Kidney Research UK. I understand the Government have set aside some £750 million for charities, but the likes of Kidney Research UK and Cancer Research UK do clinical research. They have not been able to fundraise and so have not been able to get any money to continue that clinical research. Without that clinical research, we will not have new medications, or new ways of saving lives and making lives better, so I am very mindful of that.
Secondly, on aerospace, there will be a meeting tomorrow with some of my people, where Magellan Aerospace will be answering questions about job losses.
Thirdly, in the last 25 seconds or so I want to make a point about Northern Ireland. Northern Ireland has lower rates and a highly skilled labour force. It is a perfect place for investment. I say to everyone in this House that if they have a company that wants to invest, come to Northern Ireland. Invest Northern Ireland and the Northern Ireland Assembly are there to help. We need the Government to do their wee bit as well. In the last five seconds, I will just say this to the Government: “Do your best for Northern Ireland.”
Bridget Phillipson (Houghton and Sunderland South) (Lab)
I think we can recognise from all the contributions today that the pandemic is the biggest crisis we have faced in our lifetime. My hon. Friend the Member for Bristol South (Karin Smyth) talked about the need for the health of our country and our economy to be taken together, as well as about the contribution of women to our economy. That was a point also picked up by the right hon. Member for Romsey and Southampton North (Caroline Nokes), the Chair of the Women and Equalities Committee.
My hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) also drew our attention to the fact that Government measures are having a real impact on the north-east of England and called for infrastructure investment in our region, to which I am naturally and understandably sympathetic. My hon. Friend the Member for Sheffield, Hallam (Olivia Blake) drew our attention to the incredibly challenging situation facing our universities. We also heard from my hon. Friends the Members for Warwick and Leamington (Matt Western), for Luton South (Rachel Hopkins) and for Coventry South (Zarah Sultana) on the need to secure a green transition. My hon. Friends the Members for Luton South and for Warwick and Leamington talked about the need to invest in electric vehicles, in the charging infrastructure and to see greater support for the automotive sector and manufacturing.
My hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy), who is a doughty champion of the caravan industry, drew our attention repeatedly to the need for Ministers to respond to the challenges facing that sector and to do more to support business through this crisis. My hon. Friends the Members for Merthyr Tydfil and Rhymney (Gerald Jones) and for Blaenau Gwent (Nick Smith) drew our attention to the fact that the shared prosperity fund is vital and that we urgently need clarity from Ministers on this issue. My hon. Friend the Member for Merthyr Tydfil and Rhymney also rightly drew our attention to the positive action being taken by the Labour Government in Wales.
The British public have the expectation, quite rightly, that politicians will be working responsibly to overcome this crisis. That is why we have supported the Government where possible and remain committed to working constructively to find solutions to the challenges that we face. We do acknowledge that some of the steps taken by the Government earlier in the crisis, such as the job retention scheme and the self-employment income support scheme, were the right thing to do. We called for those measures and we were proud to support them. Where we criticise—where we offer constructive criticism—it is because we know that, for Britain to succeed, the Government have to do better. Our priorities are those of the British people: protecting health and protecting the economy.
We know that we are facing a sharp and deep downturn and that the UK faces one of the largest hits to output of all industrialised countries. We also know the impact that this crisis has had on working families and on communities that have paid the price of Tory Government since 2010. I am talking about the poorest families who have seen their earnings plummet and household debt rise and the parts of the country, such as the area that I represent, that have been neglected by Governments since 2010 and are projected to face greater unemployment and competition for jobs in the coming months. There are 17 jobseekers for every single vacancy, and that is before we see additional unemployment. The young and the low paid, who are far more likely to work in sectors that have been shut down, face the toughest job market in a generation, and women, particularly mothers, are more likely to have quit or lost their jobs or been furloughed since the start of the lockdown. We can all recognise the disproportionate impact that this crisis has had on black, Asian and minority ethnic women who have been hit even harder. That is why, for weeks, we have been calling for a back-to-work Budget that supports those at the sharp end of this crisis, so that we can build a fair recovery, one of which we can all be proud.
Already, the Chancellor’s counterparts around the world have laid out broad and ambitious packages to boost their economies and support vital sectors in facing the challenges that are yet to come. As usual, since the crisis, Ministers have been slow off the mark. They have had plenty of time to plan for a sustainable green recovery that benefits communities up and down our country. Labour called for many of the measures that were announced today and, as a constructive Opposition, we welcome them, but no one can ignore the major blind spots in this statement. It is part of a running trend. Throughout the crisis, the Government have consistently been too slow, putting off the tough calls. This has made lockdown longer and the economic harm greater. It is why we must get our response right now. We need Britain to move on from the crisis not be scarred by it for generations.
We have set out tests for what we expected from the Government today: a back-to-work Budget that focused on retaining jobs, sustaining jobs and supporting new jobs. For weeks, we have been calling for an effective scheme that ensures that people are able to find decent work, even in the challenging labour market ahead. That is why we called on Ministers to learn from the example of Labour’s future jobs fund, which supported hundreds of thousands of young people into training and employment opportunities. We are glad that the Government have finally heeded our call for such a programme, but the fund does not address the scale of the youth unemployment challenge. More than 400,000 young people were already out of work pre-crisis, and a further 800,000 are set to enter the labour market. There is one specific point on the detail that I hope the Minister can address: will companies be able to use kick-start funding to support apprenticeships? I hope he will be able to answer that question when he responds. Welcome as it is for younger workers who will benefit, it does not address the concerns of many workers, especially older workers, whose jobs are now at risk and who face a very uncertain economic future.
A plan on job creation should have moved in lockstep with our commitment to tackling the climate emergency, but again, Ministers have fallen short. The recent Committee on Climate Change report laid bare how badly the UK is falling behind, and with this package, we continue to do so. The French Government have promised €15 billion for a green recovery. The German Government—€40 billion. The UK Government—£3 billion so far. Tackling the climate emergency should have been at the heart of the Government’s economic response. Decisive action to drive towards net zero goes hand in hand with job creation, providing upskilling, training and new opportunities, yet the Government approach in this area is sadly lacking.
While we have heard a great deal today about supporting job creation, which is urgent and vital, the Government’s No. 1 goal must also be to prevent people from becoming unemployed in the first place. We have seen a wave of job losses right across a number of sectors, including retail, food service, aerospace and hospitality in the last week alone, with every job lost a tragedy. We know that unemployment does lasting damage not just to individuals, their livelihoods and families, but to whole communities, and the best way to keep unemployment down is to keep people in work.
That is why the Chancellor should have abandoned his one-size-fits-all wind-down of the furlough. We want British business back on its feet, but the Government’s failure to adopt a strategic approach will hamper this. We should have had a more targeted strategy that addresses the fact that some sectors that are not at full capacity should not be treated in the same way as those that are. We need ongoing, targeted support. This is not about picking winners. It is about protecting those who have lost through no fault of their own, and the job retention bonus scheme risks a transfer of money into the hands of companies that would have brought their staff back anyway.
We have been too slow into lockdown, too slow on PPE and too slow on testing, and it is failures on public health that risk a repeat of the local lockdown we have seen in Leicester. Such further occurrences will be a hammer blow to businesses that are just scraping by. We have said we will be a constructive Opposition and part of that is making the Government aware of where this response is falling short. This crisis has highlighted the chronic underfunding of our public services, where our older citizens have been denied the care that they need and where precarious low-paid work is the norm for too many people. But out of this crisis, there is a chance to build a better country.
The Economic Secretary to the Treasury (John Glen)
It is a privilege to close this debate on behalf of the Government and I thank hon. Members from across the House for their varied and considered contributions, which I will reflect on in a few moments.
At the outset of this crisis, the Government introduced a £160 billion package of measures to protect jobs, incomes and businesses from the harm and disruption caused by covid-19. Thanks to the action that we took, millions of jobs and livelihoods have been safeguarded through the worst months of the pandemic. Most importantly, our frontline services have received the money that they need to tackle this virus head-on and to support the most vulnerable in our society, but we have always been clear, as the Chancellor reiterated today, that we are ready to take further action as the circumstances developed.
Throughout this crisis, we have listened to hon. Members across the House, just as we have listened to businesses and those working in public services. That is why we announced the bounce back loan scheme in response to some of the challenges with the CBIL scheme to help the very smallest firms and sole traders who might not otherwise be able to access the finance that they needed. It is why we announced that both the coronavirus jobs retention scheme and the self-employment income support scheme would be extended into the autumn. It is worth remembering that we still have three and a half months to go on those schemes. It is why my right hon. Friend the Secretary of State for Digital, Culture, Media and Sport came to this House on Monday to announce a bespoke package of support for theatres, museums and our hard-hit creative industries. As a former Arts Minister, it is great to see the National Gallery leading the way by opening today.
Today marks a new phase in our new economic response as we look to the future and to our recovery with a plan for jobs. It is a plan that will build on the success of our jobs retention scheme by rewarding and incentivising employers to keep previously furloughed staff in work through the autumn and into the new year by paying them a jobs retention bonus.
John Glen
I will not, given the time.
It is a plan that puts young people front and centre, with a kick-start scheme that will pay employers to create quality jobs for 16 to 24-year-olds at risk of long-term unemployment, alongside new funding for apprenticeships, traineeships and sector-based work academies. We shall be issuing guidance very shortly on how those schemes will interact with the extra support that we are putting into jobcentres. It also means that we shall invest in infrastructure, decarbonisation, and maintenance projects that will serve the needs of communities across the country, while creating jobs and apprenticeships here and now.
Through our collective efforts, coronavirus has been brought under control in this country, but it has not disappeared completely. Even as our economy reopens, many businesses and families will continue to face significant challenges. The Chancellor made it clear today that the Government are not driven by ideology; we are guided by the simple desire to do what is right. For that reason, we will continue to take significant steps to support the economy in the weeks ahead. We will, for example, inject new certainty and confidence into the housing market by increasing the stamp duty threshold to £500,000 for first-time buyers. That recognises the additional expenditure in the economy derived from a house purchase, and, we anticipate, will have a significant effect.
Few sectors have been harder-hit, though, than retail, hospitality and entertainment, so, from next Wednesday, VAT on food, accommodation and attractions will be cut from 20% to 5%. I welcome the positive comments from across the House for that measure. Through the month of August, everyone in the country will be entitled to a Government-funded discount of 50% in restaurants, pubs and cafés, Monday to Wednesday. The “eat out to help out” discount is the first of its kind in this country, and proof that the Government will leave no stone unturned in our efforts to protect people’s jobs and livelihoods.
I shall now mention some of the themes of this afternoon’s debate. My hon. Friends the Members for Stoke-on-Trent South (Jack Brereton), for High Peak (Robert Largan) and for Keighley (Robbie Moore) emphasised the need for investment in local infrastructure and levelling up, and that means investing now to prevent long-term damage to the economy and support the private sector. That is why the Government have brought forward the shovel-ready projects.
On the theme of sustainable public finances and recapitalisation, my right hon. Friends the Members for Wokingham (John Redwood) and for Chipping Barnet (Theresa Villiers) and my hon. Friend the Member for North East Bedfordshire (Richard Fuller) recognised the challenges ahead with respect to the third phase that the Chancellor referred to today, and we shall be responding in the Budget later this year. My hon. Friend the Member for North East Bedfordshire raised a particularly important point about the need to encourage the private sector to generate the jobs ahead.
My neighbour, my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes), made a passionate speech, referring to the need to address urgently the challenges faced by the beauty industry. She also mentioned the disproportionate impact on women, people from the BAME community and the disabled, and we shall be responding to the excellent report that her Committee, the Women and Equalities Committee, produced in the spring.
There was a moment of synergy between my hon. Friends the Members for Buckingham (Greg Smith) and for St Albans (Daisy Cooper) as they backed the “eat out to help out” campaign, and my hon. Friend the Member for South Dorset (Richard Drax) emphasised his commitment to that in terms of support for pubs.
There were also references to the need for resilience with our local authorities, who have received £3.7 billion in new grant funding. We will work closely with local authorities as we move into the next stage.
John Glen
I am afraid that I will not give way because of the amount of time I have left.
I wanted to respond to the point raised by the hon. Member for North East Fife (Wendy Chamberlain)—who is not in her place—on the Treasury’s responsiveness to her constituents’ correspondence. We have had a volume increase of eight times over this crisis, but we will be working very carefully to improve our responsiveness.
Over the past few months, our economy has endured unprecedented levels of disruption and uncertainty. People and businesses have experienced considerable hardship and worry, and many will continue to do so for some time yet. However, over the past few months we have seen the best of our economy. We have seen banks and building societies providing support with mortgage holidays. The hon. Member for Glasgow South West (Chris Stephens) mentioned the important role of credit unions; we will be working closely with them as we move to the next stage. Businesses large and small turned over their production lines to the manufacture of ventilators, PPE and antibacterial sanitiser, and supermarkets, chemists, couriers and utility companies have also assisted; but we now need to move forward. As the Chancellor has unveiled a plan to protect, create and support jobs, everyone in this country has the opportunity for a fresh start. The task is not yet done. It will take time, and there will be more to come from the Government in the Budget and spending review in the autumn.