I beg to move,
That this House calls for the Government to abandon its one-size-fits-all withdrawal of the Coronavirus Job Retention and Self-Employment Income Support Schemes, and instead offer targeted income support to businesses and self-employed people in those sectors of the economy that have been hardest hit by the virus and are most in need of continuing assistance, and in those areas of the country which have been placed under local restrictions due to rising rates of infection.
Our country is in the grip of a jobs crisis—a crisis that will intensify if the Conservative Government do not change course. Between April and June this year, the number of people in work fell by the largest amount in over a decade. By July, there were nearly three quarters of a million fewer employees on the payroll than there were just four months earlier. We know that these are extraordinary times. That is why Labour has acted as a constructive Opposition, working with the Government, businesses and trade unions to do all we can to save lives and livelihoods. But it is not enough for the Government now to say simply that this is an unprecedented crisis and that only so much can be done to mitigate the damage. In their amendment to this Opposition day motion, the Conservatives maintain that
I repeat, any—
“from this Government’s proposed plan will cause damage to the United Kingdom economy.”
Some humility, willingness to listen and flexibility is desperately required here.
Under this Government, the UK has suffered the highest number of excess deaths in Europe. It has experienced both the worst quarterly fall in GDP in Europe and the worst quarterly fall among all G7 nations. The evidence suggests that the number of job vacancies in the UK has fallen further than in any comparable economy and that it will take us many months to get back to pre-crisis levels.
Our people have suffered a double whammy: a health crisis coupled with a jobs crisis, both made worse, I regret to say, by the Government’s unwillingness to listen, learn and accept that they do not always know best. But there is still time to change course. Around 4 million people are still furloughed under the Government’s coronavirus job retention scheme. Another 2.7 million people have so far made claims under the self-employment income support scheme, the second and final phase of which has just opened. Many more people have not yet had any support from this Government at all and have fallen through the gaps between the various schemes.
The hon. Member is making a really powerful point. Does she agree that a huge injustice is being done to the self-employed, many of whom have gone for six months without any support whatsoever? These are our small business owners who take some of their salary and dividends for perfectly good reason. Does she agree that the Government should take their fingers out of their ears and start listening to the self-employed?
I am grateful to the hon. Member for that intervention. I agree with her. We have repeatedly raised that issue with the Government. Repeatedly we have been told that the computer says no—that no response is possible. That does not appear to be the case given the evidence. There would be means to assess people’s previous income. If there is a concern around fraud, ultimately additional deterrents can be added to the system to prevent any such fraud.
I thank my hon. Friend for giving way. Given the importance of the aviation sector, which has been particularly hard hit, the likes of myself have been calling for an extension of the furlough scheme and a sector-specific deal. However, due to Government inaction and procrastination, thousands of individuals within my Slough constituency are now being made redundant, or are on the verge of being made redundant. Does she agree that it is now time for the Government to act before we lose those jobs for good?
I am very grateful to my hon. Friend for raising that point. The jobs crisis that we are talking about is particularly intense in many of those communities impacted by the withdrawal of support for industries critical for the future of our country. Of course, as he mentioned, we were promised a sector-specific deal for aviation. We have not received it. We have not had the Government sitting down with the sector to work through the different scenarios and how we can plan for the future in that case. And we are not seeing the targeted wage support in aviation or, indeed, in other industries critical for the economic future that we desperately need.
I fear that the hon. Member may have missed off the end of the sentence, which is that, while it poses challenges, ultimately that does not mean that those challenges should not be stepped up to—they should be faced up to by the Government. His Government have accepted the need for some targeted support for hospitality and retail with the grants. There is also the Eat Out to Help Out scheme. Yes, there will be boundary issues. We fully accept that, but, ultimately, to govern is to lead. It is to take difficult decisions. The Government trumpet the fact that they worked with industry, with trade unions and with other stakeholders in creating the furlough scheme. They need to do that again to work through these challenges and to create the targeted system of support that is needed.
I will make some progress if the Member will permit me. He may find the answers to his questions—any further ones—in what I am going on to say.
In addition to those groups of people who I have just mentioned, we know that there are many others who are concerned about their futures working in parts of the UK that are still subject to local restrictions, or that may be subject to additional restrictions in the future. We also have huge numbers of people, as we have just been discussing, who work in sectors that are still not back to business as usual, despite their critical importance for our economic future—whether we are talking about highly skilled manufacturing or the creative industries—yet the Chancellor is ploughing ahead with this one-size-fits-all withdrawal of the income support schemes, pulling the rug from under thousands of businesses and millions of workers all at the same time, irrespective of their situation. He is doing so without any analysis, it appears, of the impact of this withdrawal on unemployment levels and the enormous long-term costs of so many people being driven out of work.
One of the categories that comes under severe pressures, as the shadow Minister and others in this House will know, is local councils. Their staff have been furloughed and they are having to take them back but their budgets are squeezed. Does she support my plea that additional help must be given to those councils to protect and retain jobs, because people are operating as a skeleton staff for almost a standard level of service provision, and it is just not possible to deliver that?
I am grateful to the hon. Member for raising that point. The Government promised local authorities that they would meet their calls to back-fill not just the spending that they have incurred during this period but the income that was lost. What do we have instead? We have a resiling from that promise. That is problematic because of the huge impact it will have on employment in different areas—local authority employment can be a critical part of many economies—but it is also an enormous issue for the economic development in those areas, where ultimately the lack of local leadership will be a huge problem. The Government need to hold to their promise in that regard.
The shadow Chancellor says that she wants to extend the furlough scheme, but the key question is: how long for? The Chancellor said when he announced it that it would end in October. If it is October, the shadow Chancellor says it should be November; if it is November, then she says December. If she wants a sector-specific scheme, when does it end—at the end of the crisis, as some of her colleagues have said? Is that when the virus is eradicated? What is the solution?
With all due respect to the hon. Member, he may have missed what I said. We believe that the Government need to sit down and talk to exactly the stakeholders they trumpeted so much about working with when they created the furlough scheme, so that it can provide the system of support that is necessary to protect jobs and protect our economic capacity. As I have said time and again, we do not believe that a continuation of the furlough scheme precisely as it stands now is what is required. We need a targeted wage support scheme, which is exactly the approach being taken by huge numbers of other countries but which this Government are turning their face against.
I will make some progress because I am aware that so many Members want to speak on this critical subject.
For some businesses and staff well on their way back to normal, it is absolutely right and proper that wage support ends. As I said, we are not arguing for a continuation of the furlough scheme exactly as it stands across every sector of the economy, but for others, many of which are sectors crucial to our country’s economic future, additional targeted support could be the difference between survival and going under.
The Chancellor says that he wants to pick winners, but the necessary public health measures that his Government have enacted have created losers. Across the economy as a whole, about one in 10 workers are still furloughed. For the transport sector, it is closer to one in five. For arts and entertainment, it is one in two. Yet he is stubbornly insisting on treating every part of the economy as if it is in exactly the same situation, and in doing so putting the recovery and millions of people’s livelihoods at risk. A targeted extension of Government wage support to enable short-hours working does not mean extending support for everyone forever; it means targeting it at where it is needed most.
With respect, I will not give way as I have done so many times and I am aware of the time pressure with many Members wishing to participate in this debate.
We need support that is targeted to the sectors of our economy that have been hardest hit by the virus but are critical to our country’s economic future; to areas of the country that are subject to local restrictions because of this Government’s failure to get a proper grip on the health crisis; and to businesses that would be viable in ordinary times, employing people doing jobs they love, but just need a little more help to get through this crisis. These are people like those I spoke to over the summer in north Wales working in advanced manufacturing. They do not want a permanent handout from Government, just more support while the economy is still in dire straits to help them get back on their feet. Without that support now, jobs like theirs will take years to come back. Jobs in the supply chain linked to their plant will vanish too, and with them the economic prospects for their communities.
I called on the Chancellor to be more flexible when he gave his summer economic statement in this House two months ago. What do we get instead? A panicked handout of £1,000 bonuses to any business, anywhere, that brought back a furloughed employee. That is too much public money to dole out to a business that was going to bring back workers anyway. The Chancellor allocated £9.4 billion for that bonus scheme. Let us just imagine how much more effectively that money could be spent if only he had thought flexibly about how to respond to the crisis. Let us imagine how many of those at-risk jobs could be saved. The economic reality simply does not support the approach the Chancellor is taking, and he should have the courage to recognise that and change course.
The Chancellor may not wish to take our word for it that a targeted, flexible form of wage support is the right way to go, but he could at least be persuaded by the examples of other countries, such as Germany and France, which have each extended their schemes to last for two years; the Netherlands, which has extended its scheme for a further nine months; or Australia and Ireland, both of which have committed to support furloughed workers until March next year. Of course, in our own United Kingdom the devolved Governments have called for targeted wage support to be continued, not snatched away at the same pace across all sectors of our economy.
If that is not good enough for the Chancellor, he could listen to trade unions or think-tanks—after all, he trumpeted working with trade unions to create the furlough scheme in the first place. He could listen to the TUC, which has proposed a job retention and upskilling scheme; the Institute for Public Policy Research, which has advocated a coronavirus work sharing scheme; or the Joseph Rowntree Foundation, which has suggested a covid-19 job support scheme.
If that is not compelling enough, perhaps the Chancellor could heed the voice of business. The British Chambers of Commerce has said that
“businesses across the UK are going to need further support to weather uncertainty over the coming months.”
Make UK has called for
“an extension of the Job Retention Scheme to those sectors which are not just our most important but who have been hit hardest.”
If I may, I will finish this point and then take one more intervention; I do not want to frustrate all those colleagues who wish to speak in this debate. The Federation of Small Businesses has said that
“it is time for the Government to bring forward a rescue package for those who have been left out.”
The Institute of Directors has said that the Chancellor’s bonus scheme would
“do little to prevent job losses”—
“some form of an extension to the furlough scheme should remain on the table.”
The CBI has been clear:
“It’s too soon to pull business support away at the end of October.”
The Chancellor likes to think that he has the ear of business, but it is clear that he is just not listening when business tells him to change course.
The shadow Chancellor makes some fair points, particularly about working constructively with government. On that basis, should she not constructively set out her solution to these problems, rather than simply saying that the Government should solve them? Obviously, she has ideas of how to solve them, so why does she not publish solutions?
I would love it, frankly, if the Chancellor and his team wished to open talks with the Opposition, with business, with trade unions, looking at the different options that I have just set out. I know the hon. Gentleman is one who does look at detail. I have just set out a variety of different models that have been set out by business, trade unions and think tanks. We want to work with government on this. If he is signalling that he wishes that discussion to happen, I hope that his Front-Bench colleagues will take that invitation up as well. It is not just he who wishes to have that discussion with his Front-Bench team. I note that a huge number of Conservative Members want to participate in this debate, and I am keen to hear their thoughts on it. Some of their colleagues have already pronounced on it. The right hon. Member for Preseli Pembrokeshire (Stephen Crabb) has said that there should be
“targeted extensions to the furlough scheme beyond October.”
The hon. Member for Harborough (Neil O’Brien) has said that he can see the case for it, too. How many more Conservative Members are worried, privately, about the impact on their constituents of this Chancellor pushing stubbornly ahead with his plan to take support away from everyone, all at once?
I recall the Chancellor saying that he would do “whatever it takes”. The hospitality and tourism sector, which covers a quarter of the jobs in my constituency, is now entering its third winter in a row, as the sector puts it. Should not support be targeted at that sector, too?
My hon. Friend has been such a champion for those jobs in York and, indeed, for jobs throughout the country. I say to her exactly what businesses in tourism right across the UK have been saying to me when I have spoken to them: they do not want a handout; they just want a fair chance. If they end up having to close their businesses—if they end up having to lay off staff—it will take a very long time to build those businesses back up again. The Government should be listening to them.
Indeed, the Government should be listening, as I said, to the Government Members who are concerned about the withdrawal of the scheme. More than half a million at-risk jobs belong to people living in the constituencies of the Chancellor’s newest colleagues on the Government Benches—over 18,000 in Burton, more than 20,000 in Watford and in excess of 21,000 in Milton Keynes North—but so far, the Chancellor is not listening. Of course, he has not come to the Chamber today to hear what Members have to say about the very real fears of their constituents. We have not heard him speak in the House since the summer recess, despite the fact that our country is in the grip of a jobs crisis.
The Labour party, trade unions, think-tanks, business and even the Chancellor’s own Back Benchers can all see that what the Government are doing will make our jobs crisis worse and lead to untold misery for millions of people, as well as reducing our economic capacity for the future. We are all sounding the alarm; the question is: what will it take for this Government to listen?
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“welcomes the Government’s response to Covid-19 which has already protected the livelihoods of over 12 million people through the eight-month long Coronavirus Job Retention Scheme and Self-Employment Income Support Scheme; acknowledges the support for hundreds of thousands of businesses up and down the country through unprecedented loan schemes, business grants and tax cuts; further welcomes the help to support, create, and protect jobs through measures such as the Eat Out to Help Out scheme, a temporary cut to VAT and stamp duty, increased incentives for apprenticeships, and the new Kickstart Scheme, as set out in the Government’s ‘Plan for Jobs’ policy paper published in July; and further acknowledges that any deviation from this Government’s proposed plan will cause damage to the United Kingdom economy.”
The House needs no reminding of the scale of the economic challenge facing our country. Recent GDP figures confirm that we have entered an acute recession on a speed and scale that we have never seen before. An economic crisis on this scale means that whatever the Government do, jobs will be lost, businesses will close and, as the Chancellor said last month, “hard times are here”. We should not underestimate the challenge ahead, but neither should we underestimate the Government’s resolve or that of the British people.
From the outset of this pandemic, the Government have acted decisively to protect people’s livelihoods, with one of the most generous and comprehensive packages of support anywhere in the world. We are doing everything we can to recover our economy, support businesses and give everyone the opportunity of good and secure work. Our economic response is moving through a careful, co-ordinated plan, in three phases: first, the immediate response, which started with the Budget in March; secondly, the specific plan for jobs announced in July, to protect, create and support jobs; and thirdly, rebuilding, on which we will say more in the autumn Budget and the comprehensive spending review. Let me take this opportunity to thank the many people—including Members from all parties—businesses and other organisations that have brought forward ideas and suggestions to help us to shape that plan.
I put on the record my thanks for all that the Government have done through the schemes that have helped many of my constituents. One thing needed to make this situation work is the co-operation and help of the banks. Will the Minister consider extending freezes on cards and loans for businesses, especially those in the retail and hospitality sectors? Discussions with the banks and credit card providers are critical to help companies to get over the line. We should extend that period to help them to recover.
As the hon. Gentleman will know, my hon. Friend the Economic Secretary to the Treasury has regular discussions with the financial institutions; he will have heard the concerns set out by the hon. Gentleman and will be happy to take them forward in terms of how the banks respond. In some of the other measures the Government have taken—for example, on mortgage holidays—we have seen a recognition of and response to the concerns we have heard about from our constituents.
Haribo in Pontefract has announced that it is consulting on over 200 redundancies and proposing to move some of its production back to Germany. This is devastating for the hard-working workforce. Will the Chief Secretary urge Haribo to work with the GMB trade union and Wakefield Council to look at alternative plans to prevent huge job losses in the middle of a recession, and will the Government stand ready to help them to do so? Does the Chief Secretary accept that manufacturing industry needs support if we are to prevent deeply damaging mass redundancies?
I absolutely share the concern set out by the right hon. Lady. From conversations that we have had in previous roles, I know how much she advocates for her constituency, and I support that business engaging with her, the council, trade unions and others. I will come on to a number of measures that the Government have taken, and some further measures that we will take, regarding our wider support package to the business community.
This should be set in the context of the three-phase approach. In the first phase of this crisis, the Government introduced measures to halt the spread of the disease. That included protecting our public services with more than £49 billion of funding for the NHS, schools, local authorities and other front-line services. The Chancellor said that he would do whatever is needed to support our NHS, and that is what he delivered. Our plan supported people, with the furlough scheme supporting nearly 10 million jobs—jobs that might otherwise have been lost.
The self-employed scheme provided 2.6 million people with £7.6 billion of support, and mortgage and credit payment holidays helped 1.9 million people to manage their finances—the hon. Member for Strangford (Jim Shannon) referred to that earlier. For those who are out of work, we made welfare support more supportive and easier to access, and we introduced a hardship fund to help up to 3 million of the most vulnerable people. Of course our plan backed business, because we know that only by supporting businesses can we create sustainable jobs.
I am grateful to the right hon. Gentleman for giving way, and I pay credit to the Government because they have supported a number of different groups very well. There is, however, one group who they have not supported: the self-employed, who are falling between the gaps. He will have heard about the very real hardship that they are facing right now. They, and the Excluded UK all-party group, which is chaired by the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), have been asking for a meeting with the Treasury team, but they have not heard back. Will the right hon. Gentleman agree to meet them and hear directly about the scale of the difficulties they are facing?
I am very familiar with this issue. We covered it in my appearance before the Treasury Committee some months ago, and the Chancellor has repeatedly addressed it. As the hon. Lady will know, the shadow Chancellor referred to part of those concerns, and just yesterday there was discussion in the media about concerns regarding fraud in other Government schemes. Part of the challenge and the constraints on this issue is concern about the level of fraud. We have already set out the Government’s position on the issue. I do not think there is further to add in that respect, because those concerns have been well articulated.
I will make some progress.
In addition to our support for businesses, we have provided nearly £40 billion of support through the tax system, with tax cuts, tax deferrals and the time to pay scheme. We have provided direct cash grants of £10,000 and £25,000 for small businesses and an extensive range of loan programmes, including dedicated investments for innovative tech firms through our Future Fund, and 100% Government guaranteed loans for the smallest businesses through the bounce back loan scheme. The shadow Chancellor said that she wanted the Government to listen, and bounce back loans are a good illustration of how the Government listened to concerns and changed the coronavirus business interruption loan scheme to include that additional measure. That scheme has benefited 1.1 million businesses. The House does not need to take just my word for it, because the chief economist at the CBI described the Chancellor as
“standing shoulder to shoulder with small businesses to help them through this crisis.”
The right hon. Gentleman mentioned the CBIL scheme, but many medium-sized and larger businesses in my constituency have struggled to get the loans they require. Lloyds Banking Group in particular has been poor at making positive lending decisions. What are the right hon. Gentleman and his Government doing about that?
I can give a clear and direct answer to that because, together with UK Finance, my hon. Friend the Economic Secretary to the Treasury has discussed bounce back loans, CBILS and larger business interruption loans. Those were targeted at up to £200 million for that mid-tier category of businesses, and I know from discussions with colleagues that a lot of regional businesses in that mid-tier category have been particularly impacted. The point is that this is about the package of Government schemes. Where there are individual constituency cases, we are, of course, always happy to look at them and UK Finance does a very good job in terms of its response.
I have set out the first phase. The second phase of the extraordinary support given relates to our plan for jobs. As part of protecting jobs, we have temporarily applied a reduced rate to VAT for tourism and hospitality, supporting over 150,000 businesses and protecting 2.4 million jobs. I do not know whether you, Mr Speaker, had an opportunity to benefit, but you will be familiar with the popular eat out to help out scheme, which has been a real success. The latest figures—only the one course, clearly, Mr Speaker—show that 100 million covers have been claimed, helping to support 130,000 businesses and protect almost 2 million jobs in a sector which, very seriously, has been particularly acutely hit by the covid pandemic.
Our plans also create new jobs, injecting new certainty and confidence in the housing market by increasing the stamp duty threshold to £500,000 for first-time buyers. That will drive growth and support across housebuilding and property sectors. It also builds on other schemes, such as creating green jobs through a £2 billion green homes grant, saving households hundreds of pounds a year on their energy bills, and through our £1 billion programme to make public buildings, including schools and hospitals, decarbonised. Together, they are all a part of the £640 billion capital investment in economic recovery, job creation and revitalising our national infrastructure over the next five years.
Earlier, my right hon. Friend pointed to the success of bounce back loans. There is no doubt that they have been a huge success, but some businesses who have taken out those loans will hit trouble in terms of making repayments. Will he support a programme of best practice across the banking sector to ensure that those businesses have every chance of getting through this, perhaps with different payment plans?
My hon. Friend raises an important point. From other parliamentary campaigns he has been closely involved in, I know how much he values best practice in the financial services sector. As a former financial services Minister, I share that objective, which is why I am so grateful for the work he has been doing to ensure that best practice is followed to address the specific issue he brings before the House. Of course, the best thing to enable businesses to pay loans back is to get the economy as a whole motoring. That is why we are redoubling our efforts to get on with that now and why the Prime Minister announced that £5 billion of capital investment will be brought forward as part of giving a boost to businesses, so they can indeed meet the requirements of those loans as they arise.
Our plan supports jobs, creates jobs and protects jobs. That supporting of jobs is really the third component. It includes the announcement of the £2 billion kickstart scheme set out by the Chancellor, which will subsidise hundreds of thousands of high-quality jobs for unemployed young people, allowing young people to gain experience that will improve their chances of going on to find long-term and sustainable work. We are also investing a total of £1.6 billion in scaling up employment support schemes, training and apprenticeships to help those of our constituents who are looking for a job.
The Chief Secretary will be aware that companies such as British Airways have used the furlough scheme to facilitate mass redundancy programmes for their staff. In fact, BA has also implemented the firing and rehiring of its remaining 30,000 staff, often on massively reduced wages. Does he think that that is fair?
That is exquisite timing, because I was just about to turn to the point that the hon. Gentleman raises about that use of furlough and the question that the shadow Chancellor raised about whether the scheme should be extended. I want to address head-on the concerns I have heard about that decision.
Will the right hon. Gentleman give way?
The Chief Secretary is very gracious for giving way. This is possibly not the intervention he expects. When we get through all this, and when we have time and peace and quiet, may I urge him and the Chancellor to carry out some sort of audit of how the furlough scheme worked? There have been newspaper stories of inappropriate furloughing of employees, and for any Government of any colour, we need to get to the bottom of that when we have time to do so.
Having been Brexit Secretary over the previous year and Chief Secretary during this economic challenge, I can say that we will come through this, as the Chancellor has set out, and we will come to a time when we can look at the scheme in the way that the hon. Gentleman refers to.
The scheme has protected up to 10 million jobs. The shadow Chancellor raised the duration of the scheme, and I understand those concerns. It has been one of the most difficult decisions that the Government have taken, but it is the right one. I remind the House of the extent of the support that we have offered. First, the furlough is already over eight months. It is one of the most generous schemes in the world, and we have been contributing at a higher rate of people’s wages than in Spain. We are supporting a wider range of businesses than in New Zealand, and our scheme will run for twice as long as in Denmark.
I remind the House that our support for furloughed employees does not end in October, as has been suggested in some interventions. In the Chancellor’s summer statement, he announced the new job retention bonus, which will pay employers £1,000 for every employee still in post by the end of January. For an average employee, that is a subsidy worth 20% of their salary—nearly double the amount of subsidy that a cut in employer’s national insurance would have provided, which I know some people were calling for prior to the Chancellor’s announcement of the bonus. I further remind the House that most people on furlough are employed by very small businesses where £1,000 is a significant and welcome boost.
While we will continue to support furloughed employees through the job retention bonus, it is right that the main scheme comes to an end. We need to focus now on providing people with new opportunities, rather than offering false hope that they will always be able to return to the same job they had before. It is in no one’s long-term interests for the scheme to continue, least of all those trapped in a job that only exists because of the furlough scheme.
To those calling for a new targeted or sector-based furlough, I simply pose three questions that I have still not heard answered satisfactorily today. First, which sectors would we not provide support for? Secondly, what would we do about the supply chains of those sectors on furlough, which can reach across the whole economy? Thirdly, most observers have accepted that the furlough cannot last forever, so how long would we extend it for? Without being able to answer those questions, any proposal for a sector-specific furlough cannot be seen as a serious one—
The Chief Secretary is being generous in giving way; I thank him for that. He will be disappointed to hear that I do not have the answer. However, I want to ask him a simple question. Germany has a much more advantageous scheme, which lasts until 2022. It has been described by industry bodies in the automotive sector and elsewhere as giving them a competitive advantage. Does he agree with that?
The German scheme sits within a very different landscape. It is not actually administered by the Government. It is a long-standing scheme; it has not been set up as a response to covid specifically. I just gave some illustrations of where the UK’s furlough measures stand internationally. This needs to be seen as part of the wider package of support that the Government have set out. Again, the UK package as a whole stands comprehensively as one of the best international schemes on offer.
I will not, because I am conscious that a lot of Members want to speak in the debate.
It is important to note that providing such a comprehensive and decisive economic response has, in common with every advanced economy in the world, dramatically increased public borrowing and debt. In the short run, that has been the right strategy, so that we can protect jobs and incomes, support businesses and drive the recovery. Indeed, the OBR has said that if we had not provided the financial support, the situation would have been far worse. But over the medium term, it is clearly not sustainable to continue borrowing at these levels. Yes, clearly, interest rates right now are at historic lows, which means our cost of borrowing is cheap, but with the Government debt exceeding the size of the UK economy for the first time in more than 50 years, even small changes in interest rates would have a very big impact on our public finances.
Thankfully, we were in a strong fiscal position coming into this crisis, which allowed us to act quickly to support jobs and businesses, but having seen two supposedly once-in-a-generation economic events in just 10 years, we are reminded once again that we cannot know what is around the corner. We will need to return to a position of strong and sustainable public finances.
Let me make one further point this afternoon. While we have made great strides in tackling coronavirus, it may continue to be necessary to take targeted local action to keep the virus under control. We know the impact these local measures have on people and businesses. Since 1 September, we have been trialling support for individuals in Blackburn with Darwen, Pendle and Oldham. Eligible individuals who test positive with the virus will receive £130 for their 10-day period of self-isolation, with higher payments of up to £182 for members of the household or other contacts who need to self-isolate.
Today, I can announce further new measures to support businesses. The Government will provide direct cash grants to businesses that have been ordered to close.
Closed businesses with a rateable value of £51,000 or less will receive a cash grant of £1,000 for each three-week period they are closed. For closed businesses with a rateable value higher than £51,000, the grants will be £1,500. The grants will cover each additional three-week period, so if a small business is closed for six weeks, it will receive £2,000. This new support will give closed businesses a lifeline through the difficult but temporary experience of lockdown—an important next step in our economic plan to protect jobs and businesses against coronavirus. I am grateful for everything my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy has done to develop this scheme, and he will bring forward further details shortly.
Let me close with one final observation. In the first phase of our economic response to coronavirus, we supported people, businesses and public services, with support totalling £190 billion. In the second phase, our plan for jobs is protecting, supporting and creating jobs, and as we enter the third phase our economic policy will be driven not just by responding to the immediate crisis, but by ensuring that we level up, spread opportunity, tackle climate change and make sure our response to the pandemic is not just about recovery but renewal. I commend the amendment to the House.
People across these islands are going through the most difficult of times. In the past six months, people have lost loved ones; they have not been able to have the human contact we all need; and they have struggled to keep themselves and their families going. Communities have pulled together admirably to help their neighbours, but businesses of all sizes have found it difficult, and an estimated 730,000 jobs have been lost so far. Ending the employment support schemes prematurely could cost 3 million jobs. The SNP fully supports the motion tabled by the Labour party today.
On 17 March, the Chancellor made a promise in this House. He said:
“I promised to do whatever it takes to support our economy through this crisis and that, if the situation changed, I would not hesitate to take further action.”—[Official Report, 17 March 2020; Vol. 673, c. 931.]
On these Benches, we welcomed the coronavirus job retention scheme and the self-employment support scheme. The economic powers to create such schemes rest in the hands of the UK Government. That has nothing to do with the strength of the Union: it is merely a reflection of where the economic powers lie.
The Scottish Government’s programme for government shows that where we do have the powers, Scotland has an ambitious and comprehensive plan for sustainable economic recovery, and 71% of Scots now think that Holyrood should have the financial powers required to protect our economy.
The hon. Lady mentioned the SNP’s programme for government. Does she agree with the SNP Scottish Government adviser who has said that the programme for government announced by Nicola Sturgeon lacks ambition for business and economic recovery in Scotland?
The hon. Member ignores the fact that the SNP Government do not have the full range of powers that we need to protect our economy and which only independence can give us. He knows that is the case.
This is no ordinary economic downturn. The UK Government, on clear and urgent public health grounds, instructed and required many profitable, productive and sustainable firms to close. In sectors, such as hospitality, events, tourism, aviation, culture and the arts, these limitations will remain for the foreseeable future.
The hon. Member makes a very good and well-considered point. There are lots of opportunities the Government have not considered for how we might spread around the limited and reducing number of jobs we have in order to keep people in employment.
The Federation of Small Businesses has noted that tourism and retail account for nearly half a million jobs in Scotland, many of them seasonal and rural, and many of them now facing the furlough scheme’s winding down at the very time business is at its quietest. As we have seen from local lockdowns, such as those in Leicester, Aberdeen and Greater Manchester, there is an urgent need to put in place more flexible and enduring support—exactly the type of further action the Chancellor promised he would take. Aberdeen, for example, only managed to raise £232,000 via the “eat out to help out” scheme because of the local lockdown imposed on hospitality there. That compares with over £1 million each in Glasgow and Edinburgh. We need to look at whether the schemes in place are flexible enough when local lockdowns happen.
A further spike and further local restrictions seem inevitable, so ending support now is incredibly short-sighted. Until public health grounds for closure are removed, the SNP believes that the Government have a clear responsibility to assist and support wherever they can. The Chief Secretary to the Treasury mentioned some additional schemes at the tail end of his remarks, but I would ask him to think very carefully: could he live on the money he proposes for those asked to self-isolate? If he ran a business, could he survive and pay wages, pay for stock, the rent and all the bills on the grants he has announced? He probably could not, and many businesses cannot and will fold as a result without support.
The Chief Secretary to the Treasury talked about phases of this crisis. The coronavirus is not done with us yet. Life is not going back to normal any time soon. The British Chambers of Commerce’s quarterly recruitment outlook revealed that 29% of firms expect to axe jobs over the third quarter—a record high. At the same time, the number of new job opportunities is also depressed across almost all sectors, as is reflected in the various vacancies data. For example, the Office for National Statistics and Adzuna data show the number of online job vacancies for Scotland for the week to 21 August to be almost half the 2019 average—down 49 percentage points—and the Office for Budget Responsibility has warned that UK unemployment could surpass the peaks of the 1980s after weaker than expected economic growth. The Chancellor and his Treasury team have a duty to prevent this kind of economic scarring. The devastation of the 1980s still haunts many communities, and I urge them not to gamble with the life chances of the people we are here to represent.
I give credit where it is due to the Government: the assistance afforded to the tourism industry has saved it in my constituency, which relies hugely on tourism. God forbid that the second spike gets worse than it is, but if it does and we have to close things down again, frankly that will ruin some of those businesses permanently. I make a plea to the Scottish Government and Her Majesty’s Government in Westminster to work together as closely as possible. I hope that this eventuality does not happen, but if it does, we will all need to put our shoulder to the wheel.
The hon. Member is absolutely correct. A second spike does not seem to be on the Government’s agenda, and it should be. The measures put in place were put in place at speed, at haste, and the Government should be learning from this and preparing for that second spike now. I would be incredibly grateful if at some point a Minister confirmed that they are doing that, because it is absolutely necessary. We cannot ignore the risk of a second spike, given how the figures have been creeping up in recent days.
The IPPR has said that ending the furlough scheme will lead to unemployment
“not seen since the Great Depression of the 1930s”,
with the loss of 3 million jobs, 2 million of which would be viable in the longer term if it were continued. The furlough scheme should be continued for at least two years, or for as long as we need it—perhaps we will not need it for two years, which would be a good eventuality—as is being done in Germany and France. Independent Ireland is keeping its scheme going for a year. No employee or employer should be forced to decide between their health and their income.
The self-employment support scheme should also have been continued. In addition, a basic temporary income scheme should have been introduced to protect anyone falling through the gaps in support. There is still time for the Treasury to step in and make that commitment, because the lack of parity between those in the different schemes is completely unjustifiable. I remain deeply disappointed that the recommendations of the Treasury Committee to address the gaps in support have not been taken up by the Treasury. The ExcludedUK group, representing at the least 3 million people who have been denied any UK Government support—these include the newly self-employed, freelancers, limited company directors, those on short-term PAYE contracts and many others—is still being ignored by the Chancellor, despite having presented the Treasury with viable solutions.
The situation facing women requiring maternity leave has also been incredibly stressful and unfair, with many finding themselves ineligible and some who were forced to take maternity leave early now struggling to get the childcare they need to even attempt to go back to work. It is hugely disappointing to hear that the UK Government have rejected the very reasonable request by the 226,000 maternity petitioners to extend maternity leave for three months. I hope the Government will reconsider that. I am led to wonder whether different decisions might be made if there were more women on the UK Government Benches.
When we see Jim Harra, head of HMRC, admit this week that £3.5 billion of furlough cash has been lost in fraudulent claims or error, it is even more galling to those who have no support whatsoever. There have also been errors in my constituency on HMRC’s part. Its inflexibility and inability to deal with MP requests on this issue has also been hugely frustrating for those whose businesses are on the brink.
The take-up of the coronavirus job retention scheme has been significant, as has been said, with 9.6 million workers furloughed by 1.2 million employers since March. Those employers had made £34.7 billion of furlough claims by 9 August. The scheme will cost the UK Government an estimated £80 billion in total, but we should not forget that this cost is an investment in people and in public health. The cost of not acting would be far greater.
The figures published by the Treasury demonstrating the sectoral impact of the furlough scheme are interesting. They show only 2% of employees in public administration and defence and 7% of those in finance and insurance being placed on furlough, compared with 77% of those in accommodation and food services—some 1,693,600 employees—and 70% of those working in the arts, entertainment, recreation and other services, amounting to 474,300 employees across the UK. This of course reflects the different nature of the jobs in those sectors and whether it has been possible for people to work.
The sectors in which furlough take-up has been high are not suddenly going to be able to return to pre-covid business, and there is a real argument for sectoral extensions if the Government will not consider a wholesale extension. The ability of these businesses and organisations to generate income will continue to be hampered by the need to impose public health restrictions. For example, how would a national arts company or a full-scale production be able to get a theatre performance up and running? How would that theatre be able to turn a profit at 40% capacity? What about the restaurant next door, which theatre goers might usually have gone to for a pre-theatre meal, or the pub they might have gone to afterwards, where nobody will be allowed to stand at the bar and that will not have outdoor seating in the depths of a Scottish winter, or even a Scottish autumn?
How does the Chancellor expect such firms to bear the cost of staffing, rent and other outgoings when they will not see a corresponding increase in income? The short answer is that those costs cannot be borne. The CBI’s head, Carolyn Fairbairn, has warned that
“it’s too soon to pull business support away at the end of October”.
The Fraser of Allander Scottish business monitor for quarter 2 this year reported that 55% of businesses that have made use of the job retention scheme expect to decrease their staffing numbers when the scheme is phased out.
My hon. Friend will have heard me raise with the Chief Secretary those companies that have abused the furlough by using it to pay for mass redundancies—British Airways is not alone; Centrica and others have followed suit. However, he failed to answer the question about the firing and rehiring of staff at massively reduced wages. Does she think that is fair?
It absolutely is not fair. The scheme is being abused by businesses, and that should not be allowed to happen. I commend to the Government my hon. Friend’s Bill on fire and rehire. If they wanted to do anything at all to help, they would take on the recommendations in his Bill, because they would make a huge difference to people. People should not be expected to do the same job on vastly reduced terms and conditions, under pain of losing their job altogether. It is exploitation pure and simple, and the Government should not accept it.
The Chief Secretary talked about new opportunities for those in industries that could not continue, but that fails to recognise the reality that there might not be enough jobs for those who are laid off to go into, and that what jobs there are might not be at the same wage level as the jobs they are in now. The cost will be met by the UK Government in one way or another—in employment benefits if not in extending furlough.
The end of furlough coincides with the end of the period for which people have been granted bill payment holidays. The Standard Life Foundation report, “Emerging from lockdown”, highlights that
“of the 3.7 million households across the UK granted a bill ‘payment holiday’, over 6 in 10 are already facing financial difficulties and will struggle to repay their debts when these arrangements end. For many, these payment holidays will cease on 31 October 2020—the same date the government’s job retention schemes end, leaving many facing job losses and crippling financial strain.”
The effect could be devastating: people laid off because their employers cannot afford to keep them on, with debt mounting, and all this among people who are already finding life difficult. The drop in income if people move on to universal credit—if, indeed, they are eligible, which many people are not—will push many families over the brink. I fear that the UK Government are not looking at the bigger picture in the choices they are making.
The kickstart scheme is not available easily to small employers, which could have a disproportionate impact on the rural economy in places where there are not enough employers to club together to make up the minimum 30 employees. To return to a theme I have spoken about before, there is a risk of young workers being exploited and not being paid a living wage. Nobody in this House would want to live on the wages that young people are expected to work for in this country. I ask the Chief Secretary to reconsider and to pay a real living wage to the young people on the scheme. They deserve nothing less.
I also raise caution about relating the scheme to universal credit, because many people are not able to access universal credit, as I have said. If the scheme runs only through universal credit, many young people who might otherwise have benefited from the scheme, such as it is, will not be eligible.
Where the Scottish Government have the power, they have acted. The Scottish Government have spent £4 billion on covid, with over £2.3 billion for businesses. That is above the Barnett consequentials allocated to us. The Scottish Government published their response to the recommendations of the Advisory Group on Economic Recovery on 5 August. They are acting to protect jobs by developing and delivering sector-led recovery plans, working with industry leadership groups, trade unions and others, starting with the construction sector, which is coming back from its furlough period. They are supporting jobs through the covid-19 transition training fund. Through the programme for government, they are supporting a national mission to create new jobs, good jobs and green jobs, which includes investing £60 million to support up to 20,000 young people into jobs. There is the £100-million green jobs fund, investment in decarbonisation and the Unlocking Ambition programme. They are also using the national performance framework to promote equality and to respect, protect and fulfil human rights.
The Scottish Government have made an extra £330 million of funding available this financial year specifically to support Scotland’s economic recovery. That includes £230 million of economic recovery stimulus to invest in capital projects and a £100 million package of funding focused on protecting jobs and supporting those who have been made redundant or whose jobs are at risk.
I would dearly love the Scottish Government to do more, given the scale of the crisis, but their hands are tied. The Fraser of Allander Institute is clear that
“the Scottish Government can borrow up to £450m per annum for capital investment (a cap of £3bn). On resource spending, they can borrow up to £600m per annum (a cap of £1.75bn), but only for ‘forecast error’ and ‘cash management’. They cannot borrow to fund discretionary resource spending.”
That is the crucial point. We urgently need more financial powers in Scotland. If the UK Government will not act on the things we have asked them to act on, they should not stand in Scotland’s way when we have a desire to support our people and businesses. Powers must be devolved to let the Scottish Government get on with the job.
All of this stands in the context of the looming threat of a no-deal, chaotic and damaging Brexit, with the UK Government gleefully breaking international agreements they themselves signed up to and the outrageous proposals today in clause 46 of the Tories’ United Kingdom Internal Market Bill. The UK Government’s power grab over economic development and infrastructure plans cannot be allowed to stand. The Tories speak of a power surge, but the last time I checked, a power surge was a dangerous thing that usually lasts only a few seconds, but that results in serious damage to valuable appliances. For once, the Tories might be telling the truth when they say that that is what is coming to Scotland under their plans.
Westminster and the Tories cannot be trusted with our economy. What we see today is not “whatever it takes”. Winding up the furlough scheme and allowing so many people to fall through the support net will cause lasting harm to so many people with businesses and to the wider economy. We must have the full powers of a normal independent country to meet the needs of our economy and, most importantly, of the people of Scotland.
It will be obvious to anyone who has looked at today’s call list that 90 Back Benchers are hoping to participate. I have to intimate that it is unlikely everybody will be called; indeed, it is impossible. I will leave it up to individual Members to do their own arithmetic, but I am afraid that I will have to impose an immediate time limit on Back-Bench speeches of three minutes. I call Caroline Nokes.
Thank you, Madam Deputy Speaker, and that might mean some of the niceties go out of the window.
My right hon. Friend the Chief Secretary is absolutely right to have identified the great long list of support that has gone to business, and I thank him for doing so because I now do not have to. I welcome the presence on the Front Bench of my hon. Friend the Economic Secretary to the Treasury. I would like to pay particular tribute to him for the help he has given me with individual constituency cases, particularly, I note, with one small business and Lloyds Banking Group. The hon. and learned Member for Edinburgh South West (Joanna Cherry) has just left—in time for me to make that point.
I want to put on record some local perspective of where businesses in Romsey and Southampton North have had assistance: over 10,000 jobs protected by the furlough scheme; £9.5 million to self-employed people; more than £42 million of bounce back loans; and £17.5 million in business grants. Those are very significant figures. The borough council has worked hand in hand with the Government in reaching out to small businesses, making sure all those who are eligible applied and received assistance. Some 47,000 meals have been eaten via eat out to help out. Could my right hon. Friend the Chief Secretary pass on to the Chancellor the particular thanks of the lady I met in the Cromwell Arms in Romsey who wanted to talk about the “lovely local lad” who is of course my right hon. Friend the Chancellor?
Turning to the issue of ongoing support for local businesses, I was pleased to hear this week from Simon Parkes of Elumin8, a Romsey-based business making advanced lighting systems for the automotive industry. He is looking to recruit between three and five new employees—young employees—as soon as possible, and is keen to make the kickstart scheme work not just for his business, but for the benefit of such unemployed young people. Both he and the local council are working with the local enterprise partnership to bring together the minimum number of 30 needed so that more local businesses will be able to benefit. It is great to see the determination to make schemes work and get young people into real jobs who will then enable his business, even in difficult economic times, to thrive and grow.
I commend the support that has gone to hospitality. We know it is a sector that employs many young people and, indeed, many women—an interest I have particularly. I pay tribute to the Four Horseshoes in Nursling, which is continuing the scheme on its own terms, and I know across the country many are doing the same. However, it would be remiss of me not to return to a sector that I have raised many times in this House and will continue to champion. The beauty industry employs over 370,000 people, over 90% of whom are women. They have stayed locked down longer than other industries, and in some parts of the country they remain locked down, so I welcome the grants that my right hon. Friend has mentioned.
The green homes scheme is a great scheme and one that can provide energy efficiency and jobs, but please can we make it as wide as possible, so that companies such as Kelda Technology in my constituency, which makes showers, can also benefit from it, reducing energy costs through reducing water heating costs?
Finally, on those in the events industry, my right hon Friend the Chancellor is working really hard to rebalance the economy, but these are small businesses which, if allowed to thrive, will in turn be paying tax in years to come, enabling us to rebalance the economy.
My simple request of Ministers today is that they summon the confidence to target support where it is needed most. The Chief Secretary said today to the House that he would not do that because a number of questions need answering. I may be old-fashioned—I hope he listens, as he leaves the Chamber—but I am sure it is for Ministers to answer the questions, not to sit back and wait for others to do their homework for them. If the Chief Secretary is not willing to provide sector-specific support, perhaps he could set out at the Dispatch Box why he is not willing to do that, as opposed to posing questions to Members in this House and deflecting from the call to arms.
Supporting the industrial foundations needed for our recovery and our future growth is right not just in terms of industrial policy, but in terms of spending taxpayers’ money.
The Government are understandably borrowing significant amounts of money, but they must spend every pound prudently. Wasting a few billion here and a few billion there is not acceptable when there are so many jobs and businesses on the line.
Ministers today might refer to HMRC reports that an estimated £3.5 billion has been fraudulently claimed from the furlough scheme, but that is the obvious pitfall of an open-to-all scheme. Bespoke packages of support to strategically important sectors would be negotiated directly with those businesses, with the due diligence and obligations that come with that. I hope that Ministers, too, will have the sophistication to differentiate support for the strategically important sectors—important for the foundations of our economy and our future growth—and the vast number of jobs in the broader economy that fish around them. If strategically important sectors cannot reopen or get back to work, the knock-on effect for bus drivers, security guards, coffee shops and the like, as well as the hospitality, creative and tourism sectors that rely on workers having money to spend, is clearly significant.
I have confidence that the Government are able to meet those challenges. In addition to sector-specific support, including for sectors that will take longer to reopen, that means two things. First, we need to ensure that we have an adequate test and trace system that gives employers, workers and unions the confidence to return to the workplace. It is not working; getting it right is crucial to retaining jobs in the economy. Secondly, we need the Chancellor to bring forward a fiscal investment in people, as well as a fiscal investment in infrastructure, with proper redundancy support services attached to skills and training opportunities in every part of the country.
British businesses are up for that challenge, from bringing forward R&D projects and decarbonising to pulling together in the national interest. This pandemic has shown the powerful partnership that can be formed between Government, businesses, workers and unions during times of crisis. We should try to hold on to that collective endeavour as we seek to recover and build the British economy, but that requires Ministers to step up to that challenge, to answer the questions that are being posed of them, and to take the necessary action to protect jobs and businesses across the whole of the country.
Across the House today, we have heard recognition of the extraordinary support that the Government have put in place for the economy and British businesses. Like my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes), I pay tribute to the Treasury team and the Parliamentary Private Secretaries who have been supporting us and many of our businesses with queries.
It has been mentioned that nationally, we are paying the wages of 9.6 million people. Of course, people find national statistics very difficult to relate to, so in Wimbledon, 12,100 people were furloughed, 4,200 people have benefited from the self-employed scheme, there has been £76.8 million of bounce back loans, which have helped over 2,000 businesses, and CBILS has helped 99 businesses. Inevitably, as the country returns to work and the post-economy starts to revive, we will see a very different mixture in the economy. Some industries and sectors will inevitably be impacted on in a way that we had not expected and there will be an adjustment. We would be wrong to try to pretend that that is not going to happen. Surely, therefore, a plan for jobs and a kickstart scheme is right, rather than a continuation of the furlough scheme, and the plan for jobs must look at protecting and creating jobs.
On the protection of jobs, I spoke about the arts sector in the pre-recess debate, and I hope that the announcement today from the Chief Secretary will extend to the arts sector. On the plan for jobs and where we are looking to create them, there must be a mixture of skills programmes to equip people coming into the workforce with skills for the future. The future is key, both in the Government’s announcement, rightly, about the acceleration of capital investment and in the £600 billion that they are talking about in terms of future prosperity. Certainly, in terms of infrastructure investment, I urge Treasury Ministers to look at what is fibre investment and what is iron investment—we need more fibre and less iron.
Finally, as we look to the future, it must be right in the short term that we concentrate our efforts on the growth programme. That is entirely right in terms of infrastructure. However, if we look to the medium term, beyond the growth ideas coming from many parts of the House—I commend for some notable growth ideas the One Nation Conservatives caucus group paper, which, surprisingly, I edited and authored, along with many other colleagues —we must put our economy and finances on a sound basis. I urge the Treasury, as we look to the medium term, not to rule out any of the economic levers that we are looking at to support the economy now in order to restore sound finances in the future.
In my constituency of Birmingham, Ladywood up to 8,600 jobs are at risk if the Chancellor presses ahead with the removal of the furlough scheme and the self-employed income support scheme in October and if he does not change course and adopt a targeted continuation of both schemes for particularly hard hit sectors. My constituency already had one of the highest unemployment rates in the country before the pandemic hit. My fear is that if many of the jobs of those currently on wage support schemes go, then my area and my city will take much longer to recover than other parts of the country.
I want to make the case for the arts and entertainment sector. I know that many are making cases for different sectors in this debate, but there are 60,000 jobs in the arts and entertainment sector in my region of the west midlands, and Birmingham is at the heart of many of those jobs. My constituency encompasses the whole of the city centre, which is home to many of the venues and therefore the jobs in the sector. It is therefore crucial to my area and the social, cultural and economic life of Birmingham.
The sector is struggling because it cannot get back up and running like other sectors can. The public health advice and the laws that are in place because of public health mean that its businesses cannot get back to normal. In those circumstances, it is unconscionable that economic support does not follow where the public health rules lead us.
Everything we heard from those on the Treasury Bench today about the challenges in continuing a sector-specific wage support scheme sounds very hollow to all those who are desperately trying to save their jobs. The Government have shown real creativity in coming up with economic policy to deal with the impact of the pandemic, and that should not stop now. They should overcome the hurdles that are in place to adopt a sector-specific approach, because every job in every sector that is saved today or in the next few months will decrease the scale of the bills we will all face when we ultimately have to pay off the costs of this pandemic. The cost of supporting jobs and sectors facing total collapse—those businesses are going to go to the wall—will be cheaper than the cost of inaction, which will be much more expensive in the long run. The Government’s current approach, I am afraid to say, not only does not make economic sense, but fails the test of fairness, too.
In the short time left to me, I wish to make the case for Birmingham in particular, because we are due to host the Commonwealth games in 2022. If the heart of our arts and entertainment sector is ripped out from our city, we will not be able to see the full benefits of what the Commonwealth games could bring to the brilliant city of Birmingham. I urge the Treasury to take a region-specific approach and take into account factors such as international events, so that we can have the full benefits for all our constituents—benefits envisaged when we win such bids in the first place.
I, for one, really think that the Government deserve enormous credit, not just for the sheer scale of the financial response to the pandemic, but for the speed with which key parts of the safety net were put in place really early on as the crisis unfolded. I say that first of all as a Welsh Member of Parliament who sat and listened to a near constant stream of criticism from Welsh Labour Government Ministers about our actions here as a Government, and something similar could be said for the Scottish nationalist Government in Edinburgh. I am really proud that we were able to support so many families and businesses in every part of the United Kingdom. The question those politicians need to confront is how on earth those businesses and families could have been supported in a similar way without the strong intervention of the United Kingdom Treasury. That is an important point.
I am not going to give way—forgive me. For me, the subject we are discussing today is about two things. One is how we support livelihoods. How do we support families and help keep them afloat during this crisis? There is a point I would like to make, which has not yet been made, about the strengthening of our social security system. Alongside the schemes to support businesses and jobs early on in the crisis, the Treasury took the very important decision to put extra money into universal credit as a temporary measure. If I may make one plea to those on the Treasury Bench this afternoon, it is that they need to decide very quickly that that increase should stay in place for next spring for those families, many of whom will still be adjusting to having lost their jobs and having perhaps moved from furlough to benefits, and many of them will find that a very hard landing indeed. Any prospect that we are going to remove that additional money next spring is for me unthinkable.
This debate is also about how we protect key strategic parts of our economy and our national life, and how we ensure that they come through this crisis without too much irreparable damage. I confess that I have some sympathy for some of the opinions that have been expressed on both sides of the House this afternoon. I have talked about extending furlough in a targeted way previously, but I absolutely do recognise from the conversations that I have had with trade bodies and with Ministers in recent days and weeks just how difficult it is to pin down and define a targeted extension of furlough. None the less, I plead with Ministers to keep an open mind when we talk about these sectors. I think about the enormous manufacturing operation of Airbus in north Wales and how strategically important it is for Wales and the United Kingdom. I also think about all those padlocked theatres a short walk from here in the west end and in every city centre up and down the country.
We want to protect key parts of our economy and our national life, and I really urge Ministers to keep an open mind about how we do that. They need to think flexibly and work collaboratively with unions and trade bodies on getting our economy through this crisis.
The UK is facing a jobs crisis unlike any experienced in living memory. Hundreds of thousands of jobs have been lost. The UK is facing the worst recession of any advanced economy. Many people’s hopes and aspirations for the future are now in question, but the worst is yet to come.
Last week, the Trades Union Congress warned of a possible tsunami of redundancies when the furlough scheme and other support measures are wound down. The Office for Budget Responsibility has similarly warned that, by 2021, unemployment could rise to 3.5 million—just over 10% of the UK total workforce. This jobs crisis has been keenly felt in almost every part of our economy from aerospace to retail to the creative industries. In the short time available to me, however, I want to focus on the devastation that UK manufacturing faces if the Government do not urgently change course and extend the furlough scheme.
I should first declare an interest. For four years, I proudly served as a regional secretary of Unite the Union, of which I continue to be a member. In that role, I was privileged to represent tens of thousands of people working in the manufacturing sector, including more than 20,000 workers in shipbuilding and aerospace. I know just how rare these well-paid, high-skilled jobs are in the modern economy and how much pride these workers have in their work. I also know how vital these jobs are to some of the most deprived and left-behind communities in our country—the very communities that this Government promised to level up.
In the third quarter of 2019, there were more than 345,000 manufacturing jobs in the north-west. Research commissioned by Make UK showed that output and other levels in the region reached -60% and -65% during the height of the pandemic. This economic disruption will far outlast the current set of lockdown measures within the sector, which is set to contract by 9.4% in 2020. Job losses in this sector do not just impact those who find themselves suddenly unemployed—perhaps for the first time in their lives—but have a disproportionate and devastating impact on local economies. For every job lost at a private aerospace company, four more are lost in the wider supply chain and countless others in local shops, restaurants and independent businesses.
In short, the Government’s failure to extend the furlough scheme is nothing short of wanton economic vandalism. It risks not only devastating the manufacturing sector, but laying waste to some of the most marginalised and deprived communities in which manufacturing companies are based. With furlough schemes across Europe set to last until at least March 2021, it also risks seriously undermining the competitiveness of British manufacturing at a time when it could not be more vital to our long-term economic prosperity.
I am pleased to speak in this debate and place on record my thanks to the Government for the incredible support that they have provided to my constituents in Darlington. The unprecedented challenges that my constituents face have been met with measures ensuring that they had the security of income for their families and that their businesses were able to survive. The coronavirus job retention scheme ensured that 12,300 of my constituents were supported. This represents almost a third of the entire workforce in Darlington. This scheme alone made funds of up to £184 million available to the furloughed employees of Darlington. The self-employed income scheme was accessed by 2,500 self-employed people, enabling them to access up to £2,500 per month. That support was worth more than £6 million per month.
Businesses across Darlington have benefited from a variety of business grants, business rates holidays and tax deferral schemes. Business rates relief in Darlington totalled over £12 million, and the Government have distributed 1,581 grants to small and medium-sized enterprises in Darlington with a value of almost £16 million. I would like to pay tribute to the efforts of my colleagues at Darlington Borough Council, who made sure that their distribution of the grants was one of the swiftest in the country. I also pay tribute to the work of Ben Houchen, the Tees Valley Mayor, for the local support that he has given to businesses in Darlington. The phenomenal eat out to help out scheme, enabling the hospitality sector to bounce back, was enjoyed by 62 establishments in Darlington, which have served more than 50,000 meals, and I want to pay tribute to the Tomahawk Steakhouse for its fantastic steaks. Darlington businesses have applied and been accepted for over £33 million-worth of bounce back loans.
Furlough, grants, tax extensions, bounce back loans and rates holidays—these measures have been truly extra ordinary, but this emergency safety net needs to come to an end. It cannot be extended indefinitely. I know, and the hard-working people of Darlington know, that we need to get back to standing on our own two feet. We have protected the NHS, we have supported our employees and we have cradled our businesses, but we need to move forward, creating jobs and levelling up on investment in places such as Darlington to truly unlock the potential that I know the north-east has.
I am sure the whole House would like to join me in congratulating and sending best wishes to Jack Booth, a world war two veteran who celebrates his 100th birthday on Friday.
At the beginning of this week, parts of Blackburn were still under local lockdown. Swimming pools, gyms, bowling alleys and wedding venues were all closed. That changed yesterday, when they were allowed to reopen, but it means that further restrictions were placed on Blackburn for nearly eight weeks. The impact of the pandemic has taken its toll on local residents and businesses, and of course, the council, which is predicting a £19.5 million deficit, despite the Government saying that they would do “whatever it takes”. The Government are refusing to recognise that additional support is needed in areas with additional lockdowns. I am not sure whether they are incompetent or wilfully neglecting areas in local lockdown. They provide support to some areas, but it is very sparse across east Lancashire. It is also nonsense to say that specific sectors, some of which have only just opened and others that have opened in a limited capacity, do not require additional support.
The Chancellor’s decision to withdraw wage support for jobs, particularly in Blackburn, is making matters worse. It is clear that the Government’s one-size-fits-all approach does not work, and the CBI, the Institute of Directors and the British Chambers of Commerce have said as much. Instead, the Government should be giving support where it is needed most, not withdrawing it in one go. No one here is asking for a permanent handout, but cutting off support for every worker in the country from October—no matter whether they are back at work or not, or under local restrictions—is equivalent to pulling the plug at the worst possible time. We have just heard the Prime Minister say that his priority is to protect jobs, but too many people have already been excluded from the support. If the Government are serious about protecting jobs, high streets, councils and services, they need a targeted approach to further support in areas such as Blackburn that are still suffering additional lockdowns.
Our Chancellor said he would do “whatever it takes” and the support that has been provided has been unprecedented. I have always said that there is no such thing as Government money, just taxpayers’ money, and we need sustainable public finances, but this programme was the right thing to do. In my constituency and up and down the country, high streets have struggled as more people shop online and visit out-of-town retail parks. The last thing they needed were the extra challenges posed by covid-19, having to close down and facing the prospect of making staff redundant. The small business grants, about £28 million in the first instance and then an additional £1.18 million in discretionary grants, have saved many businesses. The furlough scheme, used by 13,900 people in Bassetlaw, has no doubt saved many jobs too. We are talking about people who, through no fault of their own, suddenly found themselves unable to pay their household bills, mortgages and other living expenses. The scheme gave them the means to do that. Now we need to get people back to work.
The construction scheme has been able to start up again, get staff off furlough and back into work to build the homes we need. Many people have been able to move once more, aided by the Chancellor’s stamp duty measures. As a newly adopted Retfordian, I have seen at first hand the growing recovery in the town centre. We owe a debt of gratitude to businesses and local volunteers who have helped to create the conditions where people can again use our shops, hairdressers, pubs and restaurants safely. In Bassetlaw alone, the Eat Out to Help Out scheme has been used for up to 72,000 meals. In a post on my Facebook page, the owners of the Shireoaks Inn in Worksop said, “This scheme has given my pub a massive boost and has secured the jobs for all my staff for the foreseeable future”.
I know the hon. Gentleman is short of time, so I thank him for giving way. Does he not agree that we should use every tool available to beat this virus, including extending the furlough? Does he not think that we should take the advice of the Bank of England and treat the debt accrued as war debt?
I thank the hon. Lady for her intervention, which takes us back to the point about sustainable public finances. That is the key to all of this, and furlough should fit in with that as well. At some point, we actually must get back to work.
I was setting out why the support we provided was the right thing to do. We have also managed to support some tremendous community assets, such as the North Notts Community Arena, with things such as furloughing, bounce back loans and business rates relief—that was worth £11.9 million in Bassetlaw. Although the arena was unable to secure the discretionary grant from the council, it has been saved with funding from other sources, such as the big lottery community fund. I wish to thank Severn Trent Water and Sport England for supporting this wonderful facility, and community champion and manager Nigel Turner for driving it forward.
In addition to the £9.3 million given out for those who are self-employed, we now have a great scheme, in kickstart, which will help to benefit youngsters in the area and in their quest to find work. Although we still face many challenges ahead, our plan for jobs provides the basis for a strong recovery and bright future.
I wish to acknowledge the tremendous campaigning efforts by members of Unite the union, my own trade union as a Unite MP, who have come down today from the aerospace, aviation and manufacturing sectors, and a variety of others, to express their concerns for their own jobs when the furlough scheme comes to an end. Those are real concerns, and those people are demanding that the Government take action now to protect workers, businesses and the wider economy from the wider economic effects of covid.
In the short time I have, I wish to talk a little about the importance of sector-specific support. Some Members may know that I am on the Transport Committee. I wish to mention one sector in particular, the coach sector. I thank TM Travel, Northeast Coachways and the Honk for Hope campaign for furnishing me with information for this debate and for their efforts to safeguard the coach industry. I wish to highlight to Members early-day motion 851, which is on the Honk for Hope campaign to protect jobs and businesses. They are trying to safeguard the long-term future of coach travel, and I want the Government to take note of that.
The sector has been sadly neglected, and specific asks are being made of Ministers. The first is that they extend finance holidays—an issue raised by the hon. Member for Strangford (Jim Shannon)—by 12 months to ensure that no coaches are repossessed during the winter period, so that businesses can bounce back if there is a recovery from covid in 2021. The second ask is to designate the coach sector as part of the leisure industry to enable access to support and grants that have been made available to other leisure businesses. The third ask is to introduce a freeze on lenders seeking to repossess family homes as a result of the collapse of a coach company. The fall in demand in this sector has resulted in 98% of coaches being parked up and left in their depots off the road. The level of loss is simply unsustainable for the sector, which employs over 40,000 people, unless the Government get out of neutral and into top gear—if you will excuse the pun—and provide some sector-specific support.
The end of the furlough scheme is clearly going to cause a wave of redundancies, but coach operators, in particular, may well have to close their doors for the final time. I urge Ministers on the Treasury Bench to please look at some sector-specific support for the coach sector.
As the Member of Parliament for Wolverhampton South West, employment has been high on the agenda for me from the outset. For decades, Wolverhampton has been above the national average on unemployment. Economic opportunity for our great city was really championed when the Prime Minister said that he was going to level up the country, and areas like St Peter’s, Graiseley and the rest of Wolverhampton were given hope. Then covid hit and the world as we knew it changed. In dark times, I was able to see a city come together in unity, regardless of party, beliefs or views, and do what was right for the city. Businesses were repurposed or adjusted to serve the community, from the amazing Jim Gough’s of Tettenhall to Grill-It in Newbridge. Key workers went over and above in a time of crisis.
As lockdown was eased, I was able to get out and see these businesses face to face to see what they were doing. Simply put, it was hard for them. Footfall is down and the future of business looks more challenging than ever before. The market traders of Wolverhampton trade on with steely determination in a difficult climate. There are businesses such as EcoWulf in Chapel Ash, which was set up one year ago and had to deal with covid in its first year but trades on with a great product. Malik Butchers of Whitmore Reans has used this time to repurpose its business to provide some truly amazing halal street food.
Without a doubt, business in Wolverhampton will be concerned about paying the bills and keeping their employees in jobs, but what has made a difference in this unprecedented time is the support the Government have provided. From the job retention scheme to business grants, it has all made a huge difference to people. I have heard this from so many; it has been well received. It has been a lifeline that has saved many jobs and businesses throughout our great city. However, it does have to end.
It is never good to see someone lose a job or a business go under. This I know from experience having gone through it: the sadness you feel when you make people redundant; the numbness you feel when you tell your family you cannot put food on the table. Nobody wants this. But we have to look forward. We must make sure that we provide the best circumstances to safely get the economy moving forward and create sustainable public finances. We need to empower businesses to give them the opportunities to fulfil the visions that they have. We must move forward in supporting them as we are through the kickstart scheme and other great opportunities. We have to support businesses moving forward, but we cannot keep the furlough scheme going forever and a day.
We stand in this country at a crossroads in our economy, with profound implications for future generations. That is why I support, and my party supports, the Labour party in its call for an extension of the furlough scheme—but more, we would like it to cover all sectors, incentivise flexibility and be guaranteed until at least June 2021. This is a scheme that the Liberal Democrats called for and campaigned for, and, to give the Government credit, it has helped to stave off the worst economic impact of covid-19. Almost 10 million jobs were furloughed from March to June, and more than 6 million people still benefit.
The scheme has massive flaws, however. Primarily, it does not help everyone. It has excluded more than 3 million people, who have been left without any financial support at all. Perhaps the biggest long-term flaw is that the current support scheme was intended as a bridge over the deepest chasm of this crisis, and so far it offers us no destination. If the Government have a strategy for the onward journey, this would be the time to tell us. Where will those nearly 7 million people be when the bridge comes to an end? At the moment, I fear that the answer is: high and dry.
I am particularly concerned about tourism in the lakes and dales. We had a very busy August, and that was welcome, but most businesses could not operate at anywhere near capacity and therefore they could not turn a profit after losing £1.6 billion in the first part of the year. Does my hon. Friend agree that we need a special package to support hospitality and tourism, especially through the winter months, before the new season kicks in next year?
I thank my hon. Friend for the excellent point he makes. I know the impact on Edinburgh West of the loss of the festivals, and tourism is one of the sectors that will struggle. My fear is that if the scheme is withdrawn, we will simply have spent billions to delay the pain for those sectors, with nothing to lessen it in the long term and nothing to prepare for worse to come. Aviation, hospitality, the arts and tourism are all struggling sectors. We need the scheme not only to continue, but to do more. We need it to invest not just in staving off the crisis, but in creating a new, stronger, greener economy. If the job retention scheme is to be truly successful, that is where the bridge must lead us.
Does my hon. Friend agree that the Government must take urgent action towards their target of net zero carbon, and that now is the time to invest in the transition away from carbon-emitting industries and create new green jobs?
I certainly agree with my hon. Friend, and I believe that this crisis may, ironically, afford us the opportunity to do so. That is why we cannot afford to cut off the job retention scheme in October. We need it to help us through that transition into the post-covid economy, whatever it looks like. None of us knows what that will be. None of us knows which sectors of the economy will survive or even thrive, and which will struggle or collapse.
That is the one point on which I take issue with the Labour motion. How do we know which sectors to target, and if we target, who do we leave out? Which industries do we allow to go to the wall? Which employees do we throw on the scrapheap? I come originally from Clydeside. I know—the memory of it is seared on my consciousness and runs through everything I do in politics—the damage that is done to lives when an industry dies and those who depended on it have nowhere to turn. We cannot allow that to happen to another generation.
If this virus has confronted us with the challenge of a lifetime or of a century, it also offers an opportunity, because we are now as close to having a blank sheet of paper as we are ever likely to be. Use the job retention scheme and the structure of support, and develop it further. Furlough people while we begin to transition and develop our future. Use the scheme as the basis of the Government’s strategy, for which we are all waiting.
It has been calculated that keeping the scheme going until June of next year would cost £10 billion. Surely, that is a drop in the ocean compared with what will be lost if we do not. In that time, we can ensure that the industries and employers that can survive do so, and we can help the others to transition. Instead of mothballing companies, encourage them to work. Look at the flexible schemes in Germany, France and Austria, and at what they are doing to protect their economies. Let us use the time we have to upskill and retrain.
We need to innovate our way out of this, and we can. We need to create new industries and green jobs, investigate hydrogen power and encourage our aviation industry to be greener. We must make wellbeing the measure of our economy, and quality of life the measure of our success. The world and its economies are changing around us. The job retention scheme has given us time and we need to ensure that we use it properly. We must turn the birthplace of the industrial revolution into the home of a new green revolution.
I want to start by paying tribute to the businesses up and down the country who have done so much to protect us at this time, businesses such as: Quotient Sciences in Rushcliffe, working day and night to develop coronavirus treatments; Ruddy Fine Gin in Ruddington, which converted its production line to make sanitiser and donated hundreds of bottles to vulnerable people; or Cheff— Clean Healthy Energising Fresh Food—in Lady Bay, which produces a range of fresh, healthy meals and has donated them to frontline NHS workers and the most vulnerable. I have always believed in supporting business, because business supports our communities. That is why I am so grateful to the Chancellor for the comprehensive response to the financial jeopardy many businesses found themselves in under lockdown.
The furlough scheme is effectively credit to business. My grandparents used to call credit never, neverland. Does my hon. Friend agree that unlike the Opposition, who live in never, neverland and thrive on the delights of hindsight, this Government take their responsibilities seriously and want to support people back to work?
The furlough scheme has done so much over the past few months for people in my constituency. In Rushcliffe, over 12,500 jobs have been protected by the coronavirus job retention scheme, over 3,000 self-employed people have been claiming support through the self-employed income support, and over £18 million in grants has been distributed to businesses in Rushcliffe. However, my hon. Friend is right that we must have sound public finances and that we cannot just carry on with support in this way forever.
Contrary to the claims of the parties on the Opposition Benches, support for business and jobs is not ending in October. It is changing. We must be honest with ourselves and the public about the future. Our economy is going to change. Coronavirus did not just press pause on businesses, but accelerated the big changes we will see in our economy and were always going to see in our economy in the medium term through the adoption of new technologies such as AI, data analytics and robotics, the fusion of our digital and physical worlds, changing the world of work as we know it and changing the mix of skills in the economy.
Change is unsettling. It makes us anxious and fearful. However, it also provides huge opportunities and we must make sure that those opportunities are there for everyone. The measures the Government are now taking as part of their plans for jobs will help to make sure that that is the case: over £100 million to triple the scale of traineeships; £32 million to recruit careers advisers for 250,000 people; double the number of work coaches to help people find jobs where they may have been lost; triple the number of sector work-based placements; and investing in apprenticeship creation for people of all ages. That is what the Government are, and should be, focused on: training people for the new economy and the new opportunities it will bring.
I am grateful for the opportunity to speak in this timely debate, which is of critical importance to my constituents. Out of the four constituencies that represent South Lanarkshire in this House, my constituency has the highest number of people receiving support for their incomes during the pandemic. The most recent figures, from July, show that 15,800 constituents were placed on the furlough scheme, with 3,200 constituents on the self-employed income support scheme. To put that into context, the total number of people on those schemes is just shy of a quarter of the total electorate in my constituency.
There can be no doubt from those figures that the economic effects of covid-19 are going to be felt for some time to come. It is with that understanding that we now face an incredibly stark choice about what to do next. It is my fundamental view that the Chancellor is moving far too quickly to wind down those schemes. There are sectors of the economy that are clearly not yet ready to reopen or expect a longer time to recovery, because coronavirus mitigations will be with us for many months to come.
One example of an industry that faces a deeply uncertain future without furlough is the events industry, which employs many of my constituents and supports our thriving cultural scene. My constituent Anne Porter, who owns a small production company that has been running in Burnside since 1989, told me that she has relied on furlough to keep the company going. However, with many major live events cancelled or postponed until next year and the furlough scheme winding down, many businesses like Anne’s are now facing closure across my constituency.
My constituents whose livelihoods rely on productions and events have told me that continuing support is essential for those sectors to recover. Many performers see the end of furlough as an enormous setback to what will often be the first tentative steps into their career. Ending furlough too early will lead many to conclude that the so-called “broad economic shoulders” of the UK are being put to work creating cliff edges, just at the moment when many people will be feeling economically vulnerable. For some it will be the first time in their lives that they have experienced this kind of insecurity. They have paid their taxes, followed the rules and done all the right things, and the UK Government are now repaying them with worry and uncertainty as the scheme winds down and the threat of redundancy looms large.
In conclusion, I do not want to have to beg another Government to do the right thing and extend the furlough and self-employed income support schemes. I do not want to hear more stories from ExcludedUK of people who are falling through every gap in the support schemes and been left with nothing, not even the hope of one-off support that might help them get back on their feet. I want the Government to start listening and to keep this lifeline support going. If they will not do that, it is time that we have the choice to support people and businesses through the powers of an independent Scotland.
The Treasury paid out nearly £14 million in business grants in my constituency, instant cash that was vital to keeping businesses going during a situation that none of us wanted or could have foreseen. I must also mention the fantastic eat out to help out scheme. It has been widely welcomed by my constituents. Pubs and restaurants from Great Barr to Greets Green and from Friar Park to Newton have taken advantage, serving up 91,000 discounted meals in total across the constituency. In August, I had the pleasure of visiting the Sportsman, the Yew Tree, the Island Inn and the Cricketers Arms, to name just a few, and of course, I took my team to the amazing Red Lion.
Everywhere I went, the Chancellor’s support was hugely appreciated, and 13,400 jobs in West Bromwich East were supported by the furlough scheme. Over the summer recess, I visited Rimstock, Guest Truck and Van, and Sheldon Clayton Logistics—all brilliant businesses in West Bromwich East that benefited from the furlough scheme. It was a genuine lifeline for many businesses. However, a phasing-out of the furlough scheme is ultimately the right thing to do now. The scheme has rightly supported millions since it was introduced, but we cannot continue to run a labour market where people’s jobs are completely dependent on the state making them viable. I have listened with great interest to the Opposition, and it is not clear which sector they want to support, how long for or at what cost. I fear that the shadow Chancellor did not know either.
The Opposition seem to have also neglected to mention that it is not just in this country that support measures are coming to an end this autumn. Italy, Japan, the Netherlands, Spain, Canada, Denmark, Norway, New Zealand, Sweden and Switzerland have all announced that their equivalent wage support schemes will be phased out over the coming months. The Bank of England’s chief economist hit the nail on the head when he said that extending the furlough scheme meant
“prolonging the inevitable in a way that probably doesn’t help either the individual or the business.”
He is right.
We need to turn our attention to providing new opportunities for people. We must bring the public finances back under control. I am a big fan of the Chancellor’s kickstart scheme, and we need to go further for young people. We are looking at an entire generation of young people who have had their early career stalled through no fault of their own. That is where the Government need to step in, and it is also why I support the Prime Minister when he says that young people need to get back into the office because it is they who benefit from peer support, guidance, role models and progression.
I wonder, having listed all the countries that my hon. Friend did just now, whether she would take issue with the Opposition’s mention of France, which has a youth unemployment rate of nearly 19.5%. Should we therefore not really take any lessons from the French on how to run a successful jobs market?
I agree with my hon. Friend’s assessment of the situation.
I have a constituent who runs a firm called Sandwell Pest Control Services which is already looking to take on a young person in an administrative role through the kickstart scheme. That is just one example of the urgency many businesses are feeling to get going again. Last December, the people of this country came out en masse to reject the Opposition’s vision for the economy. The British people ultimately know that, as a hero of mine once said,
“eventually you run out of other people’s money”.
In West Bromwich East we want sound public finances. The Government stood up for jobs and our economy when it was needed the most, and they will drive forward our recovery from here in a responsible way that brings the public finances under control through competent Conservative policies.
I am pleased to speak in today’s debate at such a crucial time for both the nation’s public health and, of course, our economy. As so many Members have said since the pandemic began, the two are very much intertwined, such that our success in keeping the virus at bay will in large part determine whether our economy bounces back or remains on life support.
Covid-19 has put a powder keg under our economy and the global economy, and the recession we are now in was of course inevitable, but it must be said that the true depth of the jobs crisis that our country now finds itself in was not inevitable. The responsibility for putting that right falls squarely at the door of No. 10.
There are 4,700 jobs at risk in my Ogmore constituency, according to Office for National Statistics and Her Majesty’s Revenue and Customs figures. It is interesting hearing Government Members talk about that as if it does not matter and we will find new jobs. Constituencies such as mine have already had 30 years of deindustrialisation because of 18 years of attacks from a Conservative Government. My constituents cannot cope with any more deindustrialisation or job losses.
I welcome the Government’s support at UK level, and I welcome the Welsh Labour Government’s support for businesses across Wales—theirs is the most generous of any of the UK Administrations’ packages for supporting business—but I echo the calls of my Front-Bench colleagues: the furlough scheme needs to be extended. The suggestion that all sectors will simply survive when something is cut in October is for the birds. That simply is not true.
In the aviation sector in my constituency and that of my hon. Friend the Member for Pontypridd (Alex Davies-Jones)—I pay tribute to her for all the work she has done on supporting so many of the staff—workers face cuts. At the BA site alone, several hundred people face the possibility of job losses. The south Wales economy will take a £1.6 billion hit if BA continues to make cuts to sites across south Wales. The Government cannot just ignore that. It is simply not appropriate for a Government to stand by and do nothing in support of the aviation sector.
What Opposition Members are asking for is an extension of temporary support. Does the hon. Gentleman share my concern that Government Members are characterising that as a request for permanent support? The premature withdrawal of this support means that tens of thousands of viable jobs will be lost for want of an additional temporary extension. To characterise us as asking for permanent support is shameful.
I agree with the hon. Lady. It is rather concerning to hear the hon. Member for Delyn (Rob Roberts) shout, “How long for?” when he knows full well that the aviation industry in north Wales is the bedrock of what jobs there are in aviation. I am sure that his constituents will be interested to hear that he has very little interest in extending anything for the jobs in his constituency. I very much agree with the hon. Member for North Ayrshire and Arran (Patricia Gibson).
Surely, if the Government’s mantra of “Global Britain” is to continue, we need an aviation sector that can become a global economic hub once the global economy begins to recover. If there is little to no aviation sector left, and no highly skilled jobs, as the hon. Lady mentioned, what is it that we will become global Britain of? We will have no economic hubs in the aviation sector through which to support it.
I am conscious of the time. I have mentioned already that my constituents cannot cope with more deindustrialisation. It will be like deindustrialisation on steroids if there is not intervention from the UK Government and the furlough scheme is not extended. We need to protect the highly paid, highly skilled jobs that exist across the south Wales economy. For the Government to say that it is too complicated—“We can’t do this; we can’t do that”—just is not good enough. Constituents know it is not good enough, and they will repay that tenfold at the ballot box when it comes to future elections.
Let me raise one final point with the Minister. The Welsh Government have announced a lockdown in the Caerphilly county borough. Insurance companies and organisations that link to insurance say that it is not a recognised lockdown, so constituents cannot get support; they cannot make insurance claims. May I ask the Minister, on this technical point, to work with the Welsh Government to ensure that where lockdowns happen in any of the nations of the UK, the economic support is there from those sorts of insurance companies to ensure that people who have to self-isolate can do so?
The Government’s vital support for businesses and jobs across the country throughout this crisis has been unprecedented. In my constituency, we have seen 11,800 jobs protected under the job retention scheme, £9.1 million of support for the self-employed, over £440 million of bounce back loans for small businesses, £89 million of business grants and 849,000 meals discounted—I am only responsible for a couple of them—thanks to the brilliant eat out to help out scheme.
Despite that much-needed support, central London is still struggling. Pre covid, over 600,000 commuters came into Westminster every day to work, with another 500,000 in the City of London. The local economy relies on those workers spending in small shops and independent cafés and restaurants, but they are not coming back in the same numbers. Central London is the economic powerhouse of UK plc, driving forward this Government’s levelling-up agenda, and it is usually the first out of the traps following a recession or downturn. Sadly, this time, it looks like we will be one of the last. That is why I have produced a plan, which the Government may wish to consider, that could help to protect jobs and businesses not only in my constituency but across the country.
The furlough scheme has secured hundreds of thousands of jobs in the west end. I appreciate the reasons why the Government are bringing the scheme to an end next month, which we must do to sustain our public services. As the MP for theatreland, I want to ensure that we protect theatres even more. I welcome the Government’s £1.5 billion cultural support package, but I hope that we can keep theatres open when they come back in the new year, and a bit more help for them would be welcome.
Does my hon. Friend agree that the arts and arts venues are important all over the country and that small venues such as the Queens Park Arts Centre in my constituency are also incredibly valuable and have benefited greatly from the Government’s scheme?
My hon. Friend is right, and that is why I welcome this brilliant £1.5 billion package.
I welcomed the Chancellor’s announcements in March about a review of the business rates scheme, the £25,000 grant and the freezing of business rates, but I would welcome that freeze being extended for another 12 months. Another measure that the Government could introduce, which would bring in much-needed tax receipts, is an extension of the retail export scheme for EU visitors, allowing them to shop tax-free from 1 January. Such a tax reform could be worth up to £1.4 billion in additional annual sales. While 80% of tax-free shopping in the UK is done in my constituency, that would still have an impact on the UK as a whole.
Finally, adding two hours at the end of Sunday trading, extending it from 6 pm to 8 pm, would provide a major boost to the economy. While I appreciate that this is quite controversial for some of my colleagues, I would like to make it clear that I am only calling for this at the moment for international designated areas such as Knightsbridge and the west end. I am sure that there would be a knock-on effect for bars and restaurants as people decide to travel to central London later and enjoy a meal and drinks once the shops close.
We must ensure that London is seen to be open to the world so that it can continue to compete with other global cities such as New York, Paris and Tokyo. I ask the Government to consider the measures that I have suggested, to protect both London’s position as a global cultural hub and the UK’s standing as a major business and visitor destination, safeguarding millions of jobs and livelihoods across the nation. I look forward to supporting the Government as they continue to support jobs and businesses as the situation develops.
The aerospace industry employs well over 100,000 people in the UK, in mainly very well-paid and highly-skilled jobs. Aviation has been one of the hardest hit sectors and will be one of the last to recover, taking years to get back to where it was before the pandemic started. At Airbus in Broughton, we are experiencing the consequences of that downturn, with 500 Guidant agency workers losing their jobs, to be followed by nearly 1,500 direct employees under a voluntary redundancy scheme. I pay tribute to Daz Reynolds, the Unite convenor, who has done an incredible job in very difficult circumstances.
That is a massive hit on the local economy. If we add in the calculation that, for every job lost in a prime such as Airbus, four or five jobs will be lost in the supply chain, we see that the scale of the crisis we face is stark. The furlough scheme has helped lessen the impact for now, but we need the Government to step up to the plate and bring forward a package of measures that will help to secure the sector not just now or in the medium term, but for the long term as well.
The French, Germans and Americans have all recognised the need to implement support longer term, and a key measure should be implementing a shorter working week, where the extra time freed up would be used to upskill the workforce. Government financial support would not only secure employment, but it would also deliver value for money for the taxpayer, because people would continue to work, spend and pay taxes.
Support for airlines should be linked to a requirement for them to update their fleets and scrap older, less-environmentally friendly aircraft. More than 70 aircraft that currently fly out of the UK are more than 15 years old, and they should be replaced. Suppliers and SMEs need the Government to support an investment fund to help them to restructure and face up to new challenges, and we must support apprenticeships, which are vital for the future. As I have said, other countries have recognised the need for a sector-specific scheme, and if we do not, the danger is that future investment will go elsewhere. The Treasury does not like sector-specific schemes or to pick winners, but aerospace is already a winner. We are a world leader, and if we do not protect that, we will lose our position in the world, and we could lose the jobs that go with it.
In response to this crisis, the Government have introduced one of the most generous packages of measures in the world and certainly the most generous in our nation’s history. What marks it out as exemplary is that the Government’s response in such difficult circumstances was an early recognition of the need to protect businesses and livelihoods in places such as North Cornwall.
As of early August, 13,000 of my constituents have been supported by the coronavirus job retention scheme, 5,800 local self-employed people have received more than £16 million of self-employment income support, 1,847 local businesses have received £54 million in bounce back loans, 1,327 local businesses, and 15 nurseries, will pay no business rates this year, and 4,626 local businesses have received grants of up to £25,000. That financial support has been invaluable for businesses and employees in my constituency, and we must now get back to supporting sustainable public finances. I believe that the decisions taken on planning legislation and licensing laws have also been crucial in helping to support businesses in North Cornwall. Those businesses were given the flexibility to open to their customers and adhere to social distancing regulations.
Let me stress how important it was to reopen the tourism industry for many people and businesses in North Cornwall. Reopening was a difficult decision, for obvious reasons, but because the Government took time to wait, businesses had time to prepare and make themselves covid-secure. As the virus receded, enough of them were able to open and help with tourism during the summer months. If it were not for the Treasury support put in place at the time, hundreds of businesses in my constituency could have folded.
Many of my constituents were understandably concerned about the prospect of hundreds of thousands of people coming to Cornwall during the summer and visiting during the pandemic, but most people have generally behaved respectfully. Thankfully, infection rates in Cornwall remain very low.
Will the hon. Gentleman give way?
I am not going to give way today; I am sorry.
It is heartening to see how many businesses have responded to this crisis. One brilliant example of that in North Cornwall came from lobster and crab fishermen. Suddenly, dozens of boats had Instagram and Facebook accounts and websites, and they advertised their catches locally and eventually around the country. That demonstrated Cornish ingenuity in a crisis.
Since I closed my constituency office during lockdown, as of mid-August we have opened nearly 7,000 cases. Those include supporting 309 local businesses that got in touch to inquire about support and 730 individuals who required guidance on specific covid-related issues. I am fortunate that I have now been the MP for five years. The fact that nearly a quarter of my entire caseload has come in the past six weeks demonstrates to me how badly this crisis has affected many of my constituents.
Lastly, I pay tribute to all the good people of North Cornwall and to my constituency staff who have helped during the crisis.
I have spoken passionately in this Chamber about the impact that the coronavirus pandemic is having on the livelihoods of my constituents. Ensuring that no one is left behind should be at the heart of the Government’s response to this economic crisis. As the MP for Coventry North West, it is my job to come to this place and secure the very best deal for my constituents, my neighbours and my community.
It is my contention that we are unprepared for the impending disaster that awaits people on the furlough scheme across the country and in Coventry North West. The scheme is masking the true extent of the unemployment crisis to come. We do not yet know what the furlough scheme has protected us and our constituents from. The Government put in place a scheme to ensure that jobs were protected, in the hope that our constituents would also be protected. However, the indiscriminate and premature severing of the furlough support scheme will leave the businesses in my constituency bereft and possibly at risk of bankruptcy.
Let me lay bare some sobering facts and statistics. Since my last speech in this place, I have learned that in my constituency the number of claimants for unemployment benefits has risen to 4,780, some 3,500 people are seeking help from the self-employed income support scheme, 17,000 people are on furlough and 7,600 jobs are in the high-risk category for unemployment. We have seen job losses at large, small and medium-sized businesses in Coventry—from Rolls-Royce to Ikea and many family businesses. The figures will hit the roof if the furlough scheme is not extended and better planning not put in place.
The furlough scheme should be extended for as long as the country and my constituents need it to be extended.
Why are this Government so comfortable with putting businesses and my constituents’ livelihoods at risk? With the threat of a second lockdown and the potential for other local lockdowns, surely it just is not worth the risk. Alternatively, rather than ending the furlough scheme completely, have the Government sought to reform it so that it continues to support jobs in the worst-hit sectors and targets aid to struggling industries—something Labour is fighting for in its five-point plan? We are also demanding that if and when people do return to work, they are in a safe environment and protected against the disease.
The Government would do well to heed our call to fight for jobs, bring back our businesses, leave no one behind, keep workers safe and drive job creation. There is no room for stubbornness in a crisis like this. The Chancellor needs to think creatively, be more flexible and target support to protect jobs in the hardest hit parts of the economy.
I refer Members to my entry in the Register of Members’ Financial Interests.
The decisions taken by the Government to protect jobs throughout the coronavirus emergency have been bold and decisive—and all within sound public finances. The support has been unprecedented; there are few schemes, even among the world’s most-developed economies, that can compare with the support provided by the Government.
Businesses across Dewsbury, Mirfield, Kirkburton and Denby Dale have shown extraordinary resilience in the face of this pandemic by innovating and diversifying into other business sectors. For instance, in Dewsbury, the Rugby Clothing Company, which normally makes high-quality rugby kids, has had great success in manufacturing corporate face coverings and is supplying businesses far and wide. Looking ahead, we need to see more such innovative approaches to the difficulties businesses face. We need to explore ideas outside the economic textbooks. Eat out to help out was not a conventional policy response to the struggles of cafés and restaurants, but it has been an outstanding success up and down the country.
I completely echo my hon. Friend’s sentiment about Eat Out to Help Out, which has provided over 30,000 meals in my Delyn constituency. I know that he has a background in furniture manufacturing, and I have some furniture manufacturers in my constituency. Does he have some ideas for things that could help the sector as it continues to recover?
I thank my hon. Friend for that point. As it happens, I am coming on to my background in furniture. My background is in furniture manufacturing. Furniture and bedding have been at the forefront of Dewsbury’s manufacturing resurgence, employing hundreds of people across the constituency. Around 60% of the UK population sleep on something made in Dewsbury. [Laughter.] Interesting fact.
The British Furniture Confederation is soon to launch its “Buy British” campaign, urging consumers to buy the best, buy British and save jobs. This is an excellent campaign, which places a focus on the value of British manufacturing and highlights the importance of retaining these high-quality jobs. Every £1 million spent by consumers buying British furniture could secure an additional 50 manufacturing jobs and many more in retail. I therefore urge manufacturers and retailers, not just in furniture but in all industries, to consider taking up this campaign to get the public into shops, buying British goods and supporting jobs.
Furthermore, with the announcement of major capital projects, the Government could look at widening the scope of public sector contracts to assist British businesses through this period, whether through the supply of furniture, the provision of services or even stationery. That would assist companies such as Shackletons in my constituency, which employs more than 80 people and supplies high-quality furniture to the struggling care home sector. Its products could easily be supplied to the NHS and other social care facilities if the Government were to consider relaxing procurement frameworks. In addition, we could reduce barriers to innovation and look at reducing burdens on employers to encourage job retention. I look forward to seeing bold ideas from the Government to boost businesses, encourage employment and incentivise innovation.
Finally, the message that I would like to put out to the people of this country, and in my constituency is: buy the best, buy British and save jobs.
These are deeply troubling times for the businesses and workers across the country who form the backbone of our economy and are looking to this Government to provide reassurances that they will continue to be supported, not cast aside as the recession worsens and we enter a potential second wave of the pandemic. The furlough scheme has been a welcome lifeline for many businesses. In my constituency of Ilford South, 17,500 people—a third of those in work—were furloughed at the peak of the crisis. The flipside is that a significant number could sadly be unemployed when the furlough scheme ends, with a cataclysmic knock-on impact in Ilford and across east London and Essex.
Indeed, the Office for Budget Responsibility has forecast that between 10% and 20% of those currently on furlough will end up unemployed when the scheme ends. In my constituency, that would mean more than 4,500 people being thrown on the dole. Recently, the Bank of England predicted that a further 1 million more people will be unemployed by Christmas, with potential headline unemployment rising to more than 2.5 million.
The hon. Gentleman is making some extremely good points. His constituency, like mine, will have on average something like 4,500 workers and business people who have received no support whatsoever from the Government since March. The excluded groups include those who have been self-employed for a short period and many others, as we know. Does he agree that it is right for the Government to compensate those people, who are struggling to put food on their tables right now, having had nothing throughout this whole crisis?
The hon. Gentleman makes a very good point. Like him, I have had many constituents get in touch to raise exactly that point. Clearly the Government have been found wanting on that issue.
The Bank of England estimates that ending the furlough system before businesses have recovered from the first phase will lead to a total of 4.5 million unemployed. To put that into context, that is worse than the great depression of 1930s and will have a catastrophic effect on our nation’s finances. With half a million of those job losses predicted in Conservative-held seats, I am sure that Members on both sides of the House will join me in urging the Government to extend the supportive measures that are already in place.
We have already seen that our economy was the worst hit of all the major economies in the OECD. With both the CBI and the TUC calling for the furlough scheme to be continued to avoid such mass unemployment, will the Minister and the Government now listen to the united voices of business and unions, bosses and workers and change course before it is too late? This is not an unrealistic expectation; it is a practical necessity. Other European nations have already committed to long-term furlough schemes, which will give their economies a much better chance of bouncing back from the negative spiral they are already in. For example, Germany and France have both committed to supporting their workers up until 2022, so why cut our own jobs lifeline after just eight months?
This Government’s rationale—we have heard it from some colleagues on the Conservative Benches today—is that the furlough scheme has cost too much. We have invested only—in my view—£35 billion, which is a fraction of the £500 billion that was used to bale out our banks during the global financial crisis. The social and economic costs in many now Conservative-held seats would be catastrophic and incalculable. History shows us that once good skilled jobs are lost, they do not return in this country.
I am sorry, but I will not on this occasion.
That is why we need an industrial strategy that protects jobs and enables businesses to recover while we restructure our economy to function in a way that benefits all of society and protects our environment. In that way, we can protect British jobs and give the people of this nation real hope for a better tomorrow, which is sadly lacking from this Conservative Government.
May I begin my remarks by thanking the Labour party for bringing forward this motion for debate today? It has allowed Members from both sides of the House and across all parties to highlight the positive impact that has been felt by the massive measures that were introduced by the UK Government during this coronavirus pandemic and the positive impact that has been felt in constituencies the length and breadth of the country.
In Moray, 85,000 meals were served under the Eat Out to Help Out Scheme, 12,900 jobs were furloughed, 2,800 individuals were supported through the self-employed income support scheme, more than 1,000 bounce back loans totalling over £28.5 million were granted as well as 44 coronavirus business interruption loans. That has delivered more than £7 million in the Moray constituency alone. That is the support that we have seen from the UK Government, and I am extremely grateful for that.
Briefly, I want to echo the remarks of the hon. Member for Easington (Grahame Morris), who is no longer in his place. I have raised the plight of the coach industry at Treasury questions. I know that this is a difficult issue and I know that Treasury Ministers have heard this case before, but Maynes of Buckie, who I have been doing a lot of work with, and groups across Scotland and the UK are looking for support for the coach industry and anything that can be done would be gratefully received.
I also want to highlight something that I have done in my first month as leader of the Scottish Conservatives. I made a pledge to produce a document for Scotland’s economic recovery and jobs recovery, which is so important during this pandemic and as we recover from it. I was disappointed that none of the suggestions that we put forward in our policy document—both short-term and long-term measures—were picked up by the Scottish National party. Indeed, the Scottish Government’s programme for government that was announced just a few weeks ago did not mention small businesses once. They did not include an education Bill, which is vital as we take our country forward, but, they did, of course, find the time to put in another referendum Bill to separate Scotland from the rest of the UK. That shows the priorities of the SNP during this pandemic and its lack of ambition for Scotland after 13 years of power.
The hon. Lady can shake her head, but when I intervened on her to ask her whether she agreed with the Scottish Government’s adviser to Nicola Sturgeon, she claimed it was because Scotland does not have enough powers at the moment. That adviser was specifically saying that the programme for government—the powers that Holyrood already has and that the SNP could use to rebuild Scotland’s economy and to get us going again—lacked ideas to bolster economic growth. That was the criticism of an adviser to the Scottish Government of the lack of ambition and lack of determination from the SNP after 13 years in power in Scotland to deliver for areas the length and breadth of the country. We need to move away from the separation and the division of the past and look more at the opportunities for Scotland in future. That is what I intend to do in this place and as leader of the Scottish Conservatives. I hope that others do that, too.
Last Saturday, I joined the climate change demonstration outside the Senedd in Cardiff, and today I stood alongside trade union colleagues outside Parliament at the launch of the SOS for jobs campaign. These two actions are inextricably linked. In the 1980s, under a previous Tory Government, my constituency of Cynon Valley suffered terrible job losses. We do not want to see this repeated. It is estimated that at least 2.5 million people in the UK will be out of work by the end of 2020, unless Government action is taken to prevent this.
The job retention scheme has shown what an active Government can do in a crisis. We now need a strategy for job protection and upskilling, as proposed by the TUC. Our workers want to move forward and see the change that is needed. As one of my constituents said to me recently, “We want to be manufacturing, and if that means changing the way we work, learning new skills, we’re ready for it. We want to be productive.”
There is a golden opportunity here to repurpose industry to address climate change and to support our public services. There have been 100,000 redundancies in local government in the last 10 years. We need more social care and NHS workers. What are the Government doing to address this? We could create 1.24 million jobs in two years, given adequate investment to develop the green economy. At the heart of this are workers and their families, and as one of our local innovation workers said, “I’ve always been prepared to learn new skills. I come from a mining background, but there are no pits left. That’s the past, but I now fear for the future.” That is the human cost of not investing.
Westminster can seem remote to the people of Wales, and we need to be where the people are. At the same time as caring about individual constituents, we are aware of the bigger picture. Wales’s aerospace generates £1.47 billion of gross value added for the Welsh economy. The UK has the largest offshore wind power generation network in Europe, but we do not manufacture a single wind turbine here in the UK. What a disgrace! When will the Government finally agree to establish a national council for recovery, involving Government, industry and unions to work together to develop a green industrial strategy?
To quote a previous Tory Prime Minister,
“You turn if you want to.”
Well, U-turns are something this Government are very adept at, and we need a U-turn from them now: extend the furlough scheme, trial a four-day week, invest in green energy and in our public services, and work with others to prepare an economic plan for jobs that gives our workers, their children, their communities and this planet hope for the future.
A global leading response: just look beyond this country, and we see that this Government have delivered one of the most generous and comprehensive packages in the world, which is protecting jobs in Warrington South and around the UK with business grants, loans, rate relief, deferral of taxation, protecting people’s livelihoods and supporting businesses directly.
On Saturday, when I walked down London Road in Stockton Heath, businesses—large and small—came out to talk to me and, overwhelmingly, their response was positive. “Thank you, Chancellor,” is what they said. So how have the Government supported Warrington South? Let us start with Rishi’s dishes: 103,000 meals eaten in Warrington South, supporting pubs, cafés and restaurants—and, yes, I did enjoy it. There has been the furlough scheme supporting 15,400 incomes and the self-employed scheme supporting 3,200 homes, as well as the £126 million issued in CBILS and bounce back loans to businesses based in Warrington South. Having visited Warrington jobcentre last week, I want to pay a particular tribute to the team there who have made huge efforts to get universal credit out to those who need it quickly.
This Government’s support for business and employees is not ending, but it is important that we confront the realities of where we are today. We need to encourage employers to keep their employees on, so I fully support steps such as the job retention bonus scheme—a £1,000 bonus to every business for employees who were furloughed previously—and the kickstart scheme that kicks in to create job opportunities for young people. We need to get back to work and focus on providing new opportunities for people. Where jobs have gone, let us put all our efforts into helping those displaced get back into work. That is why I strongly support this Government’s plan for jobs. To those who argue for a sector-specific approach, I have one question: how exactly does that work—how far down the supply chain do we go?
Fortunately, the UK came into this crisis in an incredibly strong position. Warrington’s economy was one of the strongest in the north-west. Thanks to careful Conservative management of the economy over the last 10 years, we came into this crisis with public finances in a good position, which enables us to react strongly. But we should be clear that it is not sustainable to borrow at current levels in the long term. It is only right that, over the medium term, we get back to strong public finances.
I want to join my colleagues on the Government Benches and, indeed, the Opposition Benches in congratulating the Government on their generous and nimble support for industry in this economic crisis. It has been an extremely difficult time, but it would have been far worse if the Government had not intervened in the way that they have. As the trend is to give figures for our constituencies, I will tell the House that South Cambridgeshire has had 13,600 jobs furloughed—saved—and nearly £90 million in grants and loans to businesses. We also beat Warrington South, with 122,000 meals eaten out and enjoyed by people, including myself. I know from the emails and the talks I have had with businesses and pubs in my constituency that, for many of them, this support made the difference between them failing and thriving. Many of them are now looking forward to the future—we are not out of it yet, but people are a lot more positive.
It is a feature of crises that it is far more difficult politically to get out of them than to get into them, whether the lockdown restrictions or the economic support package. The Labour party has called for continued subsidies, but it will not say when those would end. That means that it is calling for subsidies without end, which means borrowing without end. I do not believe in borrowing without end, because we have to pay off the debt at some point, whether it is us, our children or our grandchildren.
None of us wants to see mass unemployment at the end of furlough scheme, but given that none of us knows how long this crisis and the restrictions will last, is it not better to shift our support from helping those who may otherwise lose their jobs to creating new jobs, taking advantage of the opportunities in our economy right now?
I absolutely agree—my hon. Friend has taken the words right out of my mouth. I believe, and the Conservative party believes, in sustainable national finances. Do the Opposition parties believe in that? If they do, they have to explain how they want to get there.
I will carry on.
We are at a time when we must look to the future, not try to preserve the past. The great Andrew Bailey, the new Governor of the Bank of England, said recently in an interview that the Chancellor is
“right to say we have to look forward now. I don’t think we should be locking the economy down in a state that it pre-existed in.”
The shape of the economy will change, as we have heard today. It will not be in the same shape in a few years as it is now. The companies and people working in the aviation sector face a very difficult time over the next few years. E-commerce, on the other hand, is thriving. We have seen airlines cutting jobs, but we have seen Amazon recruiting. Inner-city sandwich shops have been hit really hard and will be for some time as people carry on working from home. Supermarkets are thriving. Pret a Manger has cut 1,600 jobs, but Tesco has just announced that it is recruiting for 14,000 jobs.
The focus of Government should not be on “prolonging the inevitable”, as the chief economist of the Bank of England said. The focus of Government should be on helping with the transition, as my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates) said, by helping the people who are losing their jobs into the new jobs that are being created. We must ensure that short-term unemployment does not move into long-term unemployment and that when people come out of work, they have relevant skills, motivation and contacts in industry. As soon as people become long-term unemployed—after six months or one year—they lose motivation and contacts, and the likelihood that their unemployment will carry on for much longer increases. That is why the Government are right to focus on their plan for jobs, through measures such as the kick- start scheme, support for apprenticeships, increased training and advice from Jobcentre Plus. That is the right approach.
Finally, many Members have been praising the international comparisons. We heard earlier the list of countries that have already announced the ending of their furlough schemes. I like statistics, and I have been looking at the Eurostat website, which is very good but could be a bit more user-friendly. The UK’s employment figures from Q2 to Q1—the key employment figures—dropped by 0.7%. That is after a very long period, and every job lost is bad news. However, Germany’s employment figures in Q2 to Q1 this year dropped by 1.4%, twice as much as the UK. In Ireland, the employment rate dropped by 6.1%, nine times faster than in the UK. In France—there seems to be a liking for France on the Labour Benches—there was a 2.6% drop in employment from Q2 to Q1, four times the rate here. We do not have that much to learn from the French employment market ,and I really do not think we should start doing so now.
Finally—[Interruption]—I want to say that Treasury Ministers have made the right decisions at the right time and I am confident they will in the future.
Thank you, Madam Deputy Speaker—I appreciate that intervention! I am grateful for the opportunity to contribute to this debate on a very important subject.
We are living through unprecedented times with a massive health crisis. The economy will of course adapt and change, as the hon. Member for South Cambridgeshire (Anthony Browne) said, but the question is what steps we ought to be taking to make sure that we protect people. Conservative Members have talked about sound finances and not extending debt too far, and the Thatcherite principles of the Conservative party. I have to tell them that they have not been paying attention, because the seats that the Conservative party won in December, particularly those in the north of England where I am from, were not promised a return to Thatcherite economics—they were promised redistribution. So I would say to the Conservatives: get with the programme.
The focus of the Government’s response has been largely towards those in the lowest income brackets represented by many of us. In fact, the group of people who have most benefited from the Government’s help are those in the lowest income decile. We have seen a huge redistribution of our country’s resources during this crisis.
Well, the hon. Lady should listen up, because if she thinks redistribution is important, then she should be aware that in the new seats that the Conservatives won at the election in December, there are half a million jobs at risk. If the Conservatives think that they can turn away from this issue as those people end up on the scrapheap, then they are very much mistaken.
We have heard London Tory MPs saying, “London is the powerhouse of the country—make sure London is all right and everyone else will be okay.” Again, I thought that the Conservative party was not about that any more; I thought that the Conservatives had mended their ways. Well, let us see: are they really going to vote to ignore those half a million jobs in the seats they won only in December? I would say to the hon. Member for South Cambridgeshire: beware headline statistics, because the employment rate, as he well knows, cannot describe the situation for places that went through wave after wave of deindustrialisation, and where the previous rounds of high levels of unemployment impact today on people’s skill levels, income and ability to mobilise capital in those places.
My greatest fear right now is for young people, because the labour market has memories. When the labour market has a negative shock like this that impacts on people who are working today and experiencing it, they will feel that shock for the rest of their career. According to the Institute for Fiscal Studies, employees aged 25 and under are about two and half times as likely to work in a sector that is now shut down as other employees. Those young people will live with this shock for the rest of their career. I say to the Minister: those young people in our country today will never, ever forget what this Government did. The Federation of Small Businesses has said that kick-start is disappointing and we need much better for young people.
Finally, on rebalancing, what should that really look like? Where I am from in Merseyside, devolution has been worth it for us and it is going well. Merseyside’s chief economist, Aileen Jones, has come up with a credible recovery plan that ought to be supported by the Government. Whether it is innovation or the new digital economy, we can do it. We just need the Tories to do what they said they would.
I refer Members to my entry in the Register of Members’ Financial Interests. It is absolutely right that we should be protecting jobs and businesses, and that is exactly what the Chancellor has been doing repeatedly throughout this crisis. As Conservatives, we are the responsible party of government and the natural stewards of the economy, and we have always been the party that has made the right decisions through difficult times. It was the Chancellor who stepped up and provide a lifeline to so many—so many individuals, businesses, their employees and the most vulnerable in society.
Of course, ending furlough is not easy, but it cannot go on. While the Labour party, through this motion, postures and virtue signals, the people who elect us understand that these interventions cannot continue. They understand that the bills must be paid. They understand that our economy must be allowed to find its feet again and that life must return to normal.
I absolutely agree and I am proud of the Government for putting ideology aside, but there is a reason that we are the only party that the British public entrusted with our economy. Therein lies the difference, because while we talk about sustainable public finances, Labour would like to see the people of this country reliant on the state forever with no end date, trying to sneak in socialism through the back door. Meanwhile, this Government are trying to work really hard to protect, support and create new jobs. If the Labour party wants to support businesses and protect jobs, they should support this Government and this Chancellor. This is the Chancellor who introduced the job retention bonus scheme so employers could bring back people from furlough. He introduced the £2 billion kick-starter scheme to get young people into six months of paid employment, with £2,000 for employers for each new apprentice under 25 and £1,500 for those over 25. He doubled the number of work coaches and invested £150 million in the flexible support fund to remove barriers to work.
Our furlough scheme was unprecedented. It went further than any country in the world and it was the right thing to do.
We have heard much today on the Opposition side of the House about how generous the Chancellor has been with his support, but does the hon. Member not understand that when tens of thousands of jobs are being lost—jobs that would otherwise be viable with a bit of additional support—all this generosity is cold comfort when someone loses their job and potentially their home?
I thank the hon. Member for her intervention. If we look at the quantum of the package, it has helped to protect the economy at its most difficult time, and I will come on to that.
As a Conservative, I never thought that we would be in a position where we would pay up to 80% of anybody’s salary—80%—yet the Chancellor stepped up and did what needed to be done, not once but twice. Since then, 9.6 million people have been furloughed and £30.9 billion has been given to over 1.2 million businesses. It was rightly lauded as extraordinary, because extraordinary times need extraordinary measures.
But that was not the only measure. There was the coronavirus business interruption loan scheme, the bounce back loan scheme, the rates relief, the business grants, the self-employed income support scheme, the mortgage holidays, the protection from evictions, rental holidays, tax deferrals, VAT cuts for hospitality and larger grants for the hospitality sector. These are just the ones that I can get in in a few breaths, Madam Deputy Speaker.
I could not agree with my hon. Friend more. I remember that the hon. Member for Ogmore (Chris Elmore) said that we would hear about it at the ballot box, but we have heard the British public’s verdict on the Labour party’s economic policy. We heard it in 2010, 2015 and 2017, and we heard it decisively in 2019. I will never forget the feeling of disbelief and deep disappointment that I had when I first read the note that the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) left in the Treasury when Labour were last in Government, saying that there was no more money left. Thank God we are a far cry away from the recklessness that we saw under the last Labour Government, and that is why I will be opposing the motion.
It is a pleasure to follow my hon. Friend the Member for Meriden (Saqib Bhatti).
Protecting jobs and businesses has been a priority of the Government throughout the crisis. Let us not forget that more has been done to support the economy than ever before in this country, in response to the immeasurable challenge presented by the pandemic. My right hon. Friend the Chancellor’s coronavirus job retention scheme has helped protect more than 15,000 jobs in Redcar and Cleveland alone, with a further 4,600 people eligible for the self-employed income support scheme. That is almost 20,000 jobs protected, to say nothing of the thousands of businesses saved from collapse and the many thousands of families able to put food on the table and keep a roof over their heads.
The job retention scheme was extended until the end of October, with the introduction of some flexibility to get employees back to work, as this is the safest choice for the nation’s health and our economy in the long term. Now, as we emerge from the pandemic, we must bring these schemes to an end, or risk delaying our economic recovery and causing even more damage to businesses and jobs. Through the furlough scheme, we have supported almost 10 million jobs, but we must accept the harsh reality that some of those jobs simply do not exist anymore. Indeed, even the Bank of England’s chief economist described extending the furlough scheme as “prolonging the inevitable”.
Covid has changed our world drastically. For many, our working style has changed, including for those of us in this House who now participate virtually and process through the Lobbies like one half of Noah’s ark. We have to face up to the consequences of telling people to work from home. When Sadiq Khan refuses to encourage people back into this great city, it means that businesses close and jobs are lost. Hospitality is still struggling, with Pret and Costa cutting jobs, yet the Mayor of London and the Leader of the Opposition refuse to encourage people to get back to work.
I am proud that the Government stepped in when people needed them most. Now, they are leading the charge to safely get the country back on track—back to trading, back to creating jobs, back to work. Millions are at risk of becoming unemployed as a result of the potential economic standstill if we continue to suffocate our economy. Rather than squashing growth and keeping jobs in suspension, we are focused on encouraging consumers to create that economic activity, with the eat out to help out scheme, the green homes grant and the stamp duty cut. Our steps do not suspend jobs; they create jobs. There is so much more potential for job creation in emerging sectors such as decarbonisation. This is our chance to build on the environmental benefits of the lockdown and promote a green economy.
Nothing protects jobs and businesses more than a Government who are right behind them every step of the way, from weathering the pandemic to helping them create the opportunities of the future. Our Conservative Government—the people’s Government—are doing just that.
The reserves have run out, the fundraising has dried up, and vital support never arrived for our vital community and voluntary sector. It is estimated by Pro Bono Economics that 60,000 jobs will be lost from our charities. The organisations that stepped up in the crisis are now in crisis and need the Government to step up. Already, 6,500 jobs are registered as being lost. On top of that, many small organisations will be losing the ones and twos that never hit the headlines. However, the pain for those organisations is as great. We think about animal welfare charities having to pay vet bills and feed animals. We think about medical research charities that are seeing a 41% drop in funding. The result is that the cancer plan is delayed, treatments are delayed and vital treatments are not provided. That is our loved ones not being cared for. This is what charities do day in, day out.
The withdrawal of the furlough scheme will be devastating for this sector, which has depended on it so much. There is no money coming in. We need a solution.
I wish to continue.
When talking about large organisations, from the Southbank Centre to Oxfam and the National Trust, we must also remember the small organisations. It is estimated that 90% of black, Asian and minority community organisations will be gone by the end of the financial year. If we think of what has just happened across this country, it is clear that we need those organisations. The Government need to step up and ensure that they are there.
The sector is calling for an extension of the coronavirus job retention scheme with greater flexibility; a gift aid emergency relief package; the repurposing of the national fund, which is worth £500 million, to allow access to support charities and services; the effective and efficient distribution of the shared prosperity fund; and the creation of a community wealth fund using dormant assets. It is crucial that is brought forward now, before it is too late.
If I may, Madam Deputy Speaker, I want to raise one issue concerning my constituency. We will be the second worst hit constituency in the country, and therefore we need some action now. While the Government have supported the BioYorkshire plan, which will create 4,000 jobs, they are tying that up in a devolution deal. I therefore urge the Government to bring that funding forward so that we can provide that safety net now to stop us moving into an unemployment crisis in York, which no one in this House wants to see. The Minister could solve that problem for us.
The breadth and scale of the support package put in place by the Government is genuinely unprecedented, whether in times of war, disease or global recession. In Dudley South, nearly 12,000 of my constituents have been supported through the job retention scheme, and 2,500 more have been supported through the self-employment income support scheme. Without such measures, thousands more of my constituents and millions of workers around the country would have lost their jobs. Whereas the last Labour Government chose to bail out the bankers, this Government have decided that the real priority is to back working people around the country, and that is something of which I am extremely proud.
We now need people back at work and the economy growing so that those jobs can be genuinely protected and sustainable in the medium and long term. It is not just a matter of sandwich shops and coffee bars losing out when large numbers of workers are away from the office and the factory for so long. We live and work in an interconnected economy where all parts of it rely on other sectors. One of the main factors limiting order books for manufacturers and other businesses in my constituency is the fact that so much of the economy is performing below normal capacity, and that impacts on supply chains. The longer that many jobs are furloughed, the less likely those jobs are to be there and to be sustainable whenever the furlough scheme ends, and that is why it is not appropriate to have an indefinite extension of the scheme.
The hon. Member is very courteous to give way. I too pay tribute to the furlough scheme, which has been very helpful to businesses in my constituency. I am the chair of the Excluded UK all-party parliamentary group. Other Members have made this point already, but does he agree that the APPG would not have happened had it not been for support from the Government Benches? It would be helpful if we could have a meeting with Ministers from the Treasury to discuss constructively how we might be able to help the people who have been missed out.
I obviously will not answer on behalf of Ministers as to their availability for meetings, but for those who fell outside these extensive schemes, I think they more than anybody need the economy to be moving back towards a state approaching normality, because that is where their sustainable income comes from. The quicker we can do that, the better it is for them.
While it would not be appropriate to have an indefinite extension of the furlough scheme—I do not think furlough is even a medium-term solution—there are some parts of the economy where there are particular needs for support. The measures announced earlier this afternoon by my right hon. Friend the Chief Secretary to the Treasury for businesses that are told to shut and for individuals who are made to self-isolate are extremely welcome. I do hope that Ministers will look at what measures other than furlough might be appropriate for those businesses when legislative requirements mean that they cannot operate or cannot operate economically —we have heard about theatres and live events—or where ongoing regulations mean that demand has simply being taken away. For some parts of the tourism and travel sector, for example, quarantine measures mean that their customer base is not there at all. Businesses across the economy would not have survived the last six months without the innovative support that has been put in place by the Chancellor. I thoroughly welcome that, but now we need to build the economy for a sustainable future.
I think most of us agree that we are facing a triple whammy at the moment, with a public health crisis in the guise of covid, an economic crisis in which Brexit has already cost our economy billions of pounds, and climate change, which will eventually cost us a lot and is currently costing lives as well as other things that the Treasury may not be making a record of. That is certainly an expensive project as well. We are in a recession. We know that GDP fell by 20.4% in the second quarter of 2020—that is 20.4%, not 2.4%—which is the largest confirmed fall of any economy in Europe and the G7, so we are facing really tough times.
I spent the summer visiting food banks—like many other Members, I am sure—and I would like to put on record my praise for the volunteers who run the Campsbourne Primary School food bank, which is providing desperately needed food for many families in Hornsey. I also want to mention another fantastic service, which is an innovation I hope others can look to. It is called Connected Communities, and it is local authority-based but works closely with the voluntary sector to pick up hard-to-reach groups of people who are not digitally aware.
I want to echo my support for those sorts of organisations and to follow on from what the hon. Member for York Central (Rachael Maskell) said about the charity sector. I sympathise very much with what both hon. Members are saying about support for these organisations. Does the hon. Member for Hornsey and Wood Green (Catherine West) acknowledge that the Government made £750 million available for small grass-roots charities to help them to get through the covid crisis?
Indeed. No one on this side of the Chamber is saying that any of that money was not very much called for. There was a tiny bit of wastage, according to the Select Committee findings that I read yesterday, but I hope that, over time, the Treasury will get rid of the £3.5 billion wastage.
I have some asks for my constituency and I have my figures here. I am a London MP, and many Members who know London will be aware that Muswell Hill ward is not considered to be a low-income place. Unfortunately, however, it has seen an increase of 300% in jobseeker’s allowance and universal credit claimants. The neighbouring Fortis Green ward, which is also considered quite an expensive and well-to-do part of my constituency, is facing a 234% increase in the number of people signing on. Alexandra ward is home to the famous and beautiful Alexandra Palace exhibition hall, the former home of the BBC, and it is a lovely part of my constituency. It has seen a 220% increase in the number of people claiming jobseeker’s allowance and universal credit. The difference between this recession and the 2008 global financial crash is the impact that this one has had across the economy.
Lots of people are very well paid when they are in work, but because they are self-employed, they are suffering exponentially. What are my asks? First. I am asking for sector-specific schemes for workers, so that we can look at the self-employed and particularly those in the creative sector. Secondly, I am asking for specific help for people who, for example, have a small business and are helping several of their employees to manage but have not had anything back for themselves. In conclusion—
The purpose of today, and the theme of so many of the contributions that we have heard, is the need—now so desperately urgent—for the Government to change course and move away from a one-size-fits-all approach. To secure a better future for working people and businesses across our country, we need a targeted extension of the furlough arrangements for the sectors that face the biggest challenges in the months ahead. So many Labour Members have raised their constituents’ concerns. Although time constraints mean that it is not practical for me to name them all, the House will have heard their call, and Labour’s call, for the Government to change course.
We have also heard from many Government Members. Some Conservative Members have been prepared to say on the airwaves that Ministers should think again, and we heard from the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) about that today. However, with so many jobs at risk and so many sectors in trouble, I find it extraordinary to witness such a level of complacency, from so many of the Conservative Members who are here today, about so many jobs in parts of our economy that face very difficult months ahead.
We have had a lot of statistics today, but we can have some more. In Burnley, there are 3,050 jobs in sectors hard hit by the pandemic, across aviation, manufacturing, restaurants and car manufacturing; in Bury North, there are 2,420 jobs in restaurants, pubs and clubs, hospitality and tourism; in Keighley, there are 3,700 in restaurants, pubs and clubs and childcare; and there are so many more. People in all those constituencies, and people in similar sectors in constituencies across our country, will wonder why the Government simply do not seem to want to listen.
It is always a delight to hear from Conservative Members who think that the Opposition should make those kinds of decisions. My hon. Friend the Member for Oxford East (Anneliese Dodds), the shadow Chancellor, has set out very clearly that we will work with Government to design a scheme that can be targeted more at the sectors of our economy that are in trouble, but only Ministers have access to all the data that can best point us to how the scheme could properly work.
Internationally, we are an outlier in our response. We are far from through this crisis, and it would be a mistake to pull away support prematurely. Doing so will damage our economy in the long run and hit world-leading sectors of our economy. We should not make that mistake, and we urge Ministers to work with us and to think again.
It is not just the Labour party that is urging the Government to change course and provide for such a targeted extension; the TUC and the CBI take the same view, and we even hear from The Daily Telegraph that it is far too soon to be ending furlough. Indeed, with every passing day, it is becoming harder to find people—apart from Conservative Members—outside No. 11 Downing Street who believe that the Treasury has got this right.
Aside from the furlough extension, the Minister has again shirked the opportunity to address the gaps in the schemes. The shadow Chancellor has consistently pressed the Chancellor for support for those who, through no fault of their own, have fallen through the gaps of the schemes that were designed to provide employment support—the excluded. Perhaps they are employees who were changing jobs. Perhaps their business has a high street presence that does not qualify for rate relief. Perhaps they have only this year moved from employment to self-employment. Perhaps they are in one of those situations and their partner is in another.
We understand that these are difficult decisions to get right, but the Government have had six months. Today we heard yet again the same reply about what they mean to do for those people. They have done nothing, they are doing nothing and they propose to do precisely nothing. In the years ahead, Conservative Members may discover that many of their electors have longer memories than they would like.
None of these arguments is one to which the Opposition have come lately or had a belated conversion. Quite the contrary; inside and outside this House, we have spent months calling on the Government to fix the shortcomings in their schemes. The shadow Chancellor has been absolutely clear that we are more than willing to work with the Government, with businesses and with trade unions to get this right.
I will not be able to quote every remark, because time is limited, but I will remind the House how often, and for how long, we have urged the Government to get a grip, change course and, above all, bring in a targeted extension of furlough. On 19 April, the shadow Chancellor said:
“Our main concern right now is that a number of those programmes are not fulfilling the promise that has been placed on them”
On 20 April, I said that the date set for the introduction of the scheme still set aside many workers. On 3 May, my right hon. Friend the Member for Doncaster North (Edward Miliband), the shadow Business Secretary, urged a second wave of support, including where necessary an extension of the furlough scheme. On 12 May, the shadow Chancellor warned again of our concerns, and again on 23 May. On 30 June, my hon. Friend the Member for Oldham West and Royton (Jim McMahon), the shadow Transport Secretary, was already drawing attention to how often we have been making this point:
“Labour has consistently called for an extension to the furlough in the most impacted industries”.
On 15 July, the Leader of the Opposition made the same points to the Prime Minister, warning that
“the decision…not to provide sector-specific support to those most at risk could end up costing thousands of jobs.”—[Official Report, 15 July 2020; Vol. 678, c. 1509.]
On 28 July, he added:
“We need a targeted extension of the furlough scheme for the hardest-hit sectors and proper support in place to help those who are unemployed back into work.”
It is not simply the Opposition who believe that a targeted scheme would be better value for money. The Government’s own civil servants required ministerial direction before pursuing the Chancellor’s poorly targeted job retention bonus. The Chancellor himself has accepted that there will be a deadweight cost that might stretch into the billions, yet the amendment in his name today suggests that any deviation from existing Government policy will cause damage to the UK economy. The self- confidence is breathtaking. Does the Chancellor really believe that his Government have got everything right? It is a pity that he has not graced us with his presence today to make that argument himself. The language of infallibility is not helpful to families who fear for their jobs. Persistence may be a virtue; obstinacy in the face of all evidence is not.
The frustration that people in this country feel at the Government’s refusal to listen, understand and engage is growing all the time. The Government amendment is clear that the man in Downing Street knows best. That is not the sense shared by many businesses and workers right across our country. People do not expect handouts, but they do expect fairness. They expect that in their hour of need the Government will not abandon them, their families or their businesses. The Chancellor has shown all summer that he is not prepared to engage with the concerns of businesses in sectors facing the toughest challenges now and in the months to come.
But what matters is not the Chancellor’s persistence in sticking to decisions made in March. What matters most is a secure future for Britain’s firms and Britain’s families. Today we have again seen the Chancellor’s stubbornness holding Britain back—holding back our people and holding back our economy. It is not too late. I urge Conservative Members, especially those who have only recently arrived in this place, to think of the conversations that they must have had, as I have, with local businesses worried about the months ahead and with families fearful for their jobs, and to back this motion.
It is a privilege to close this debate on behalf of Government. I thank hon. and right hon. Members across the House for their varied and considered contributions. The Government have worked closely with colleagues across the House to help to define the interventions that we have made. I thank my hon. Friends the Members for Cities of London and Westminster (Nickie Aiken), for Dudley South (Mike Wood) and for Moray (Douglas Ross) for making further constructive contributions today.
I think I can discern four themes on which to base my remarks. First, many colleagues have referenced the support from the schemes that the Government have introduced over recent months. The Government have acted decisively to protect people’s livelihoods and support businesses, with what has been one of the most generous and comprehensive responses in the world. The Government have supported people, businesses and our public services with over £190 billion. The OBR and the Bank of England agree that the actions that we have taken in the first phase of our response have helped to safeguard millions of jobs and that without them there would have been far worse outcomes. The OBR has said that the positive action that the Government have taken
“should…help to limit any long-term economic ‘scarring’, by keeping workers attached to firms and helping otherwise viable firms stay in business.”
At the heart of today’s debate is the fact we have supported more than 9.6 million furloughed workers and 2.6 million self-employed individuals through our schemes, as my hon. Friend the Member for Wimbledon (Stephen Hammond) and others recognised. We have helped millions of the most vulnerable people in the country, with a more generous welfare system, a hardship fund and financial support through mortgage and credit payment holidays. We have intervened to reduce income losses faced by working households by up to two thirds, with the poorest working households protected the most—a point that was welcomed by my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb). We have produced extensive support schemes, working with businesses, with tax cuts, tax deferrals, direct cash grants and an extensive programme of loan schemes. I will be happy to engage with the hon. Member for Ogmore (Chris Elmore) and the hon. and learned Member for Edinburgh South West (Joanna Cherry) on the specific concerns they raised about various schemes.
Of course, the direct cash grants to businesses that my right hon. Friend the Chief Secretary has just announced will give businesses either £1,000 or £1,500, depending on rateable value, for each three-week period that they are closed. That will provide vital support to closed businesses throughout the difficult but temporary experience of local lockdown—measures that have been urged by colleagues such as my hon. Friend the Member for Bolton North East (Mark Logan) throughout these difficult weeks.
I am sorry; I will not be taking interventions, given the shortness of the time.
The second theme that I want to draw out is that, in response to the unfolding tragedy of people losing their jobs, the Government have announced a specific plan for jobs. We are one of the first countries in the world to do so. The plan for jobs protects, creates and supports jobs. We introduced the Eat Out to Help Out scheme—another scheme that Treasury officials had to issue a ministerial direction for—and temporarily reduced the rate of VAT on tourism and hospitality. Doing so supported millions of jobs in some of our most jobs-rich industries.
To create jobs, we are driving growth in the housing sector by increasing the stamp duty threshold temporarily to £500,000, creating green jobs with the green homes grant, and providing billions of pounds of capital investment. To support jobs, just last week we launched the kickstart scheme to subsidise the most vulnerable category of 16 to 24-year-olds. In addition, we have been providing employment support schemes, training and apprenticeships, and providing the extra support of job coaches in jobcentres.
The third theme I want to draw out from the contributions today is the furlough scheme. The furlough scheme will have run for eight months by the time it closes, and it has supported millions of people and their families. It is right to say that it is one of the most generous schemes in the world. As my hon. Friend the Member for West Bromwich East (Nicola Richards) mentioned, ending the scheme is the right thing to do. On Monday, the chief economist of the Bank of England agreed, saying that to maintain it in its current form would not help either individuals or businesses.
Although I have heard the arguments at a high level for a targeted or sector-specific furlough scheme, I have heard no clear, satisfactory answer to the questions the Chief Secretary posed earlier about which sectors would not be provided with furlough, how we would treat and define supply chains, and when such a scheme would end. Of course, we are not ending our support for furloughed employees; the job retention bonus scheme provides an incentive for businesses that bring employees back from furlough to do meaningful work and ensures that they are supported as the economy gets going. As my right hon. Friend set out, the bonus represents a significant sum that will be vital particularly for small and medium-sized enterprises, which make up 95% of the employers that have claimed for furlough grants and 60% of furloughed workers.
The final thing that I want to emphasise is that our comprehensive and generous economic response has required us to significantly increase our levels of borrowing. In the short run, that has been absolutely the right strategy so that we can protect jobs and incomes, support businesses and drive the recovery, but over the medium term it is clearly not sustainable to continue borrowing at these levels. We will need to return to strong public finances where our debt is in a more sustainable position.
With Government debt now exceeding the size of the UK economy for the first time in more than 50 years, even small changes could be hugely damaging. Thankfully, we were in a strong fiscal position coming into this crisis, which allowed us to act quickly and decisively without hesitation to support jobs and businesses. The difficulties we now face remind us once again that sound public finances are not an optional extra; they are the foundation of a good economic policy.
The Government certainly are not saying “job done”. We know that there is more we need to do to protect jobs and businesses, and today’s debate has helped us to focus on some of the future ideas and solutions.
The economic challenges that we face are extraordinary and unique in our history, but the Government have been proceeding since March with a clear plan to address those challenges. We are providing one of the most comprehensive economic responses to the coronavirus of any country in the world, and we are determined to do everything we can, not just to get through and recover the economy, but to rebuild a better, fairer and prosperous economy, as we deliver on our governing mission to level up and unite the country. That is why we are supporting the Government amendment this afternoon.
Apologies to the 56 Members who did not get in on this debate today. We will now put the original question to the House.
Question put, (Standing Order No. 31(2), That the original words stand part of the Question.
The House divided: Ayes 249, Noes 329.
The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.
Question put forthwith (Standing Order No. 31(2), That the proposed words be there added.
The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.
The Deputy Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2)).
That this House welcomes the Government’s response to Covid-19 which has already protected the livelihoods of over 12 million people through the eight-month long Coronavirus Job Retention Scheme and Self-Employment Income Support Scheme; acknowledges the support for hundreds of thousands of businesses up and down the country through unprecedented loan schemes, business grants and tax cuts; further welcomes the help to support, create, and protect jobs through measures such as the Eat Out to Help Out scheme, a temporary cut to VAT and stamp duty, increased incentives for apprenticeships, and the new Kickstart Scheme, as set out in the Government’s ‘Plan for Jobs’ policy paper published in July; and further acknowledges that any deviation from this Government’s proposed plan will cause damage to the United Kingdom economy.