[Relevant Documents: Second Report of the Treasury Committee, “Economic impact of coronavirus: Gaps in support”, HC 454; and the Government Responses, HC 662 and HC 749; and Eighth Report of the Treasury Committee, “Economic impact of coronavirus: the challenges of recovery”, HC 271.]
I am sure right hon. and hon. Members will know that the two Backbench Business debates are very well subscribed, so there is likely to be a four-minute limit on Back-Bench speeches for both. As we are running behind quite a lot, that limit might have to go down further. With two debates, there will be two Front-Bench winding-up speeches, so the amount of time for Back-Bench contributions will be fairly short.
I beg to move
That this House welcomes the Coronavirus Job Retention Scheme and calls on the Government to examine, improve and extend that scheme’s operation and application to ensure that people who started work after the furlough scheme started are included and that this support continues until the UK’s economy is more robust, so that the goal of retaining as many jobs as possible is secured.
I first applied for this debate in May, but the matters at hand are as relevant now as they were at that time, and perhaps even more so as we continue to struggle with the challenges of covid-19 and its serious and far-reaching consequences. I wish to say at the outset that I will not press for a vote on the motion, because it would simply eat into the talking time in the next important debate.
The job retention scheme was established by the UK Government. At the time, it was a very welcome response to the disruption caused by the virus, helping to keep workers and families afloat during difficult times. It would be wrong, indeed churlish, to say anything else. I know that this point will be explored in the next debate, but every single MP in the House will have had emails from constituents who have been deprived of any support through no fault of their own—the newly employed, the newly self-employed, freelancers and so on. The injustice of being excluded from support has profound consequences for those affected. For six months, some have had no wages coming in, and for far too many there is no end in sight to their troubles.
For these people, this issue should have been quickly addressed by the Chancellor, when the up to 3 million excluded came to light. It should have been addressed and still can be addressed, but it has not been, so their debts are building, their futures are uncertain and they are simply being ignored. Hearing, as we have many times in this Chamber, of the Chancellor’s bounty for other workers does not pay their bills; it only increases their sense of being overlooked and ignored. The words “We are all in this together” ring hollow and mocking in their ears, and we shall hear more about that in the next debate. Now we face the situation of the job retention scheme being wound down at the end of October, with hundreds of thousands, perhaps millions, of people losing their jobs.
In previous debates, Government Members met the common-sense arguments in favour of extending furlough with cries of “This scheme can’t last forever”, and I presume that that is because they simply cannot answer why it needs to be wound down in October. Extending the furlough scheme by a mere eight months could save 61,000 jobs in Scotland alone. In much of Europe support schemes are being extended, not curtailed, with Germany investing 4% of its annual income in recovery compared with the UK’s feeble 1.3%.
We must save jobs that are sustainable in the longer term until our economy is more robust. Many self-employed people—people overlooked entirely by the job retention scheme—must also be included, otherwise we will face a wave of job losses and millions will face enormous ongoing financial hardship, with some sectors of our economy taking years to recover and some jobs lost forever.
My hon. Friend talks about some sectors struggling and transport, in particular aviation, would be one of those sectors. Does she agree that if the Government do not extend a version of the furlough scheme for all sectors they should at least be looking at doing so for specific sectors that are really struggling?
My hon. Friend is absolutely correct. We need sectoral support, and some areas are desperately looking for help, but we also need to extend this scheme in general.
To wind down the scheme and withdraw all support at the end of October, just as payment holidays are ending, will do huge damage to workers and their families, as many will face losing their homes and any hope of financial recovery. Tens of thousands of viable jobs could be saved with an extension of support. We know, as we have heard from my hon. Friend, that the aviation and aerospace industries and the tourism and hospitality sectors are struggling badly, as are our night-time industries. They have been hit very hard, and the Institute for Public Policy Research has estimated that 3 million jobs could be lost, most of which would remain viable in the longer term if support were to continue.
The Fraser of Allander Institute reports that 55% of Scottish businesses using the job retention scheme expect to reduce employee numbers when it ends.
Like the hon. Lady, I have had letters and emails from people in similar situations, and I am sure everyone here has a great deal of sympathy. She mentioned the importance of maintaining jobs that are going to be viable after this is all over, but one of the things most people are saying to me is, “We don’t know what the new normal is going to be like,” so how is she going to choose between jobs that are going to be viable and those which will just be fundamentally changed because their industries are changed as a result of consumers behaving differently once the pandemic is over?
The hon. Gentleman makes a fair point, but the whole point is that we do not know. We need to get our economy on an even keel; we need to make sure it is healthier so that then the damage can be assessed—but what a crime it is to throw away viable jobs because we think that some jobs will not be viable. There are potentially millions of jobs that are saveable here, and I think investing in our jobs is a price worth paying in order to save the vast majority, because that is what the experts are telling us.
I will make some progress.
Many businesses are awaiting further lockdown easing before some or all of their staff return to pre-covid working hours. Numerous other viable businesses are simply not in a position to keep staff in their jobs without this crucial support. Indeed, in our own island communities, such as the Isle of Arran in my constituency and the Isle of Cumbrae, there has been even greater disruption with the necessity of capacity restrictions on ferries. With the main tourism season drawing to a close, further support for viable jobs is essential.
Government Members continue to throw their hands in the air and ask, “For how long should support continue?”, to which we on the SNP Benches reply, “For as long as necessary to save tens of thousands of viable jobs, perhaps millions in the longer term.” We say: we want the Chancellor to keep his word when he said he would do “whatever it takes” to save jobs. Let us put to bed this economic illiteracy about what that would cost. The direct cost to the Government of extending furlough would be offset by income tax and national insurance contributions paid on the wages of those remaining on furlough and by savings on unemployment benefits that would not need to be paid. The net cost of extending the furlough scheme across the UK would be around £10 billion, according to the National Institute of Economic and Social Research. We also need to factor in how that would help economic growth and leave public debt slightly lower as a share of GDP than if the scheme were closed down next month, and that is before we factor in the likely significant social cost of not extending the scheme. Without an extension, unemployment is likely to be as high as 10%.
I accept many of the points that the hon. Lady is making, but does she also accept that some of the jobs she is talking about will not be viable when the furlough scheme ends and that extending it would delay the opportunities to retrain or accept jobs in other sectors?
I thank the hon. Lady for her point, but again we hear the argument that, because some of these jobs cannot be saved, no jobs should be saved. We say: let us invest in our people and assess the economic damage afterwards. At the moment, when the picture is not clear and the facts are still emerging, and when the extent of the damage is still unknown and the economy is still in a critical condition, we cannot afford to wind the scheme down in October.
With businesses slowly bringing staff off furlough, does the hon. Lady agree that extending the scheme will allow that slow rollback to continue, rather than having owners make the decision to let go of staff who could be brought back in a month’s time? We are talking about 700,000 people. Another month, or another few, could make all the difference.
I thank the hon. Gentleman for his point. He is absolutely correct. For the sake of a little extra support until our economy is in better condition, while we are still in the midst of the pandemic—it has not gone away—we need to save as many jobs as possible and support businesses in their quest to hold on to staff, rather than losing jobs that might never return.
In addition, the CBI has warned of a cliff edge and urged replacement support for jobs if furlough support ends next month. The UK manufacturing sector has warned of a “jobs bloodbath”. So much of this could be avoided. The goal of the job retention scheme, as the Chancellor told us, was to save jobs and build a bridge through the pandemic, but if furlough support is withdrawn next month, his bridge will self-evidently have not reached the other side. The investment to support and save jobs was laudable, but the task is not finished and the UK Government should not—must not—walk away from an economic disaster that is avoidable. They must not allow events simply to take their course.
Today, we on the SNP Benches urge the Government to go further and do more to save potentially millions of jobs. I echo the calls made last night in the Scottish Parliament and urge an extension to the job retention scheme. Despite the leader of the Labour party in Scotland having said that it makes no sense for the UK Government to pull away support now in one fell swoop, bewilderingly—almost inexplicably—Labour MSPs last night voted with the Tories in the Scottish Parliament against a motion urging the continuation of that support. That is an act of betrayal and a dereliction of duty towards those in Scotland who are currently, and desperately, worried about their jobs and their families.
Voters in Scotland will not easily forgive or readily forget this act of political posturing from a so-called party of workers—a party that was happy to bail out the banks but voted against support for viable jobs in Scotland for the longer term. It is utterly bewildering, and if any Labour Member wants to intervene and explain why the Labour party in Scotland has done that, I will we more than happy to hear it, but I see that nobody is willing to do so.
There are no mixed messages or equivocation from the SNP Benches. We urge the UK Government to do the right thing: to look at the kind of forward planning and support done in countries such as Germany, and to protect our economy and jobs through these difficult times. If these calls go unheeded, we in Scotland will simply be further persuaded that we need those powers for ourselves to make our own decisions.
There is a tsunami of job losses heading our way. It is not inevitable. We can stem the tide. We urge the Government to use every tool at their disposal to do so, to extend support for jobs and to ensure that those who have been unjustly excluded are given the support they need during these difficult times.
At the start of my remarks, I place on record my appreciation of and gratitude to the Government for the coronavirus job retention scheme. In Wimbledon, it has meant that 12,500 people have a chance of their livelihoods and their futures.
Inevitably, as my hon. Friend the Member for Sevenoaks (Laura Trott) has already said, as this country returns to work and the economy starts to revive, we are likely to see a very different economy from that which we saw pre-covid. We are wrong to try to pretend anything other than that. While some say, “Let’s extend furlough, but in a targeted way,” the questions to whom, how much and for how long remain unanswered.
In July, surely the Chancellor was right to say,
“I will never accept unemployment as an unavoidable outcome.”—[Official Report, 8 July 2020; Vol. 678, c. 974.]
As we look to the future, instead of a blanket extension of the furlough, is the Chancellor not right to ask for new, innovative, creative and effective ways to support the economy and people’s livelihoods? It is not a question of whether we are supporting jobs, but of how we do it.
On the protection of jobs, I have spoken about the arts sector many times. I say to my right hon. Friend on the Front Bench, the Member for Hereford and South Herefordshire (Jesse Norman), that I welcome the recent package for the arts sector, but he will know that most of that is going to the institutions rather than the workers. May I suggest that, particularly for those in the theatre sector, he looks at a wage subsidy scheme that allows them to continue so that when theatres reopen, they will be there? Much the same applies to the events industry, which is a huge industry with a lot of jobs in Wimbledon.
The Government have made much of targeting infrastructure, and they are right to do so, but they must look at the economic activities and train people for those activities in the future. Economic development zones are not a new idea but, armed with investment and training incentives, they would be zones of opportunity, investment and employment. Those zones could be aligned to, for instance, a new technologies adoption fund: 3D printing will be the tool-making of the future, and for people to have those jobs, we need to skill them for the future.
For young people, the prospect of securing a foothold in the labour market as they transition from education to employment should be a realistic ambition. This Government’s plan for jobs—£100 million for 18 and 19-year-old school leavers—is clearly a step in the right direction. It is also right that the Government are looking at how they can support the people who have taken those courses into jobs. I welcome the support for apprenticeships and for new trainees being taken on, but may I suggest to my right hon. Friend one way of embedding that? We all know that work experience gives rise to permanent jobs, and I encourage him to look at ways of supporting people coming off those courses into work experience and into permanent jobs.
History also teaches us that downturns and recessions often temporarily remove that step into work for young people, but the over-40s, who find their jobs being eradicated, also need help. While I commend the work being done by the Government in doubling the number of job coaches and in some of the retraining schemes, I ask my right hon. Friend, when the Government are looking at support for jobs, to embrace those schemes and make them and the flexible support fund available to the over-40s as well.
Finally, the Government acted with extraordinary speed and effectiveness to create the coronavirus job retention scheme. That scheme was the right scheme at the right time, and 50% of those people have now returned to work. That does not make it the right scheme for all time.
HMRC estimates that the level of fraudulent or incorrect claims under the CJRS to be 5% to 10%— between £1.75 billion and £3.5 billion—so even at the lower end, that money would be useful in extending the benefits of the scheme. When I asked about this, only five individuals had asked for the data that is held about them and about who has actually secured the funds that have come to them under the scheme. Does the hon. Member agree that further transparency would allow more of this money to be, as my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) has said, available to people to extend the scheme?
I am not aware of those numbers, but I thank the hon. Lady for making them available to me. I am sure that the Minister on the Front Bench will have heard her words. I want to make sure that the scheme has not been operated fraudulently, because we need all the money to go to people and to some of the great retraining schemes that the Government are introducing now. As I have said, the investment in future prosperity and the commitment to look at new and innovative ways of protecting and creating jobs is the key, and it is the right approach for the future.
Order. Just to give a bit more information, particularly to those who are going to take part in the next debate, the wind-ups will begin at 2.45 and this debate will conclude at 3.15 when we move on to the next debate. We are giving equal time, therefore, to both of them.
I am glad to be able to take part in this important debate. Yesterday, at Prime Minister’s questions, the Prime Minister proclaimed:
“We need to get people off furlough and into work”.—[Official Report, 16 September 2020; Vol. 680, c. 311.]
But he said that the scheme is not “the right way” to do that. Yet, he also stated that the Government will continue to apply the maximum creativity in putting their arms around the workforce in the UK. This contradiction is forcing millions into crippling uncertainty. The Government’s short-sighted decision to withdraw support for jobs and businesses across the UK will be nothing short of disastrous for people, for businesses and for jobs. We all know that. We have warned them time and again that this approach will result in job losses and hardship for ordinary people who are just trying to get through the coronavirus crisis.
According to IPPR research, 2 million viable jobs are at risk. Other countries have extended their schemes, why cannot we? In fact, we should. I am not arguing that the furlough scheme should be carried on just as it is. I am not arguing for a one-size-fits-all approach to job retention and I am certainly not asking the Government to throw money at every industry. What we need is a flexible, targeted support scheme beyond the autumn to save millions of people in vulnerable sectors from the jobs crisis. To avoid this inevitable jobs catastrophe, we need some key actions and changes to the furlough scheme. We need to expand part-time working and reward employers who give people hours rather than cut jobs. We need to provide training and support for those who cannot come back full time. We need to target sectors most in need, including retail, which is a major employer in my constituency of Blaydon and already suffering. We need to target hospitality and other people hit by local lockdowns. We need to provide certainty for workers and businesses, but, instead, what have we got? We have the job retention bonus, which is a scheme that will see taxpayers’ money going into businesses that were going to bring back workers anyway. My constituents do not need a bonus, they need a lifeline.
Things will only get worse if the Government continue with their plans to strip people of that lifeline shortly. Earlier this week, the north-east chamber of commerce said that it knows that the winding down of the job retention scheme is likely to lead to significant redundancies in the months ahead. The continued rise in the claimant count in my constituency in the north-east is an early indicator of that. Many of those people who are jobless and claiming at the moment are in the 18-to-24 age group. The crisis has had an unequal impact on young people in the north-east.
We know as well that some people have got on the job retention scheme as it is coming to an end, but there are other people who have been excluded, who have fallen through the cracks. So many businesses in my constituency tell me that they are not able to claim grants and they are not able to furlough themselves. These are not rich business people. They are not fat cats. They are people who are just working hard to make ends meet and to provide businesses and employment in the constituency. I hope that the Government will think again and consider extending the furlough scheme, but in a new form, which better reflects the needs of the people. That will give people in my constituency—both employees and entrepreneurs—a chance to survive.
I congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) on securing the debate. I am glad that the motion welcomes the job retention scheme. It is clear from the contributions we have heard so far, from across the House, that the scheme has been an absolute lifeline for people’s jobs. It has certainly been a lifeline in Sevenoaks, where it has saved 12,000 jobs and been vital for so many institutions, from the brilliant Stag theatre to the equally brilliant Bricklayers Arms in Chipstead. But the question now is what we do next.
I will focus my remarks on women and women’s jobs, which have been disproportionately affected by the crisis. I will argue that we do that by encouraging opportunities for women to be economically active where possible, rather than not. It is worth dwelling at the outset on the impact of coronavirus on women. Before the crisis, we had a record 75% participation rate, but the pandemic has hit women’s jobs hard. Women are more likely to work in sectors that have been completely shut down, such as hospitality. The virus has increased the burden of unpaid care, disproportionately affecting women, according to McKinsey and other studies. Mothers have reduced their paid working hours as a result, and by more than fathers. Overall, women’s jobs are almost twice as likely to be vulnerable than men’s jobs, and there is a fear that the gender wage gap will rise because women’s jobs are more likely to be interrupted in the workplace than men’s jobs.-
It is in that context that the furlough scheme has been absolutely crucial. Women are 14% more likely to be furloughed, and from July they have been able to come back flexibly, which is crucial. The flexibility shown by employers in relation to home working has also helped many. How do we make sure that women can continue at that high participation rate? How do we ensure that the impact they felt over the crisis does not continue to high rates of unemployment?
To continue furlough indefinitely would, in my view, risk rising female unemployment. It would keep women in jobs that simply, and very sadly, just do not exist. I argue that we should instead focus on encouraging employers to rehire; creating new jobs; supporting childcare and making sure that schools stay open; and encouraging employers to continue being flexible, and indeed to increase flexibility.
On rehiring, I disagree with the hon. Member for Blaydon (Liz Twist). I think that the job retention bonus scheme will be crucial to allowing women to get back into work. As I have said, women are more likely to be furloughed, so the scheme is more likely to benefit them. It is something I welcome and encourage.
With regard to creating new jobs, Andy Haldane—I am sure that he will be quoted at length today—has said clearly that
“keeping… jobs on life support is in some ways prolonging the inevitable in a way that probably doesn’t help either the individual”.
I agree. What we need are new, flexible opportunities in the workplace, such as the green jobs encouraged by the green homes grant, and we should offer retraining opportunities. I hope that we will see that in the upcoming Budget, because that would really make a difference for women, enabling them to move into new jobs in the new workplace that we are inevitably coming into.
We also need to support childcare and keep schools open. It is critical that nurseries, childminders and schools stay open. Whatever happens over the next few months, it is absolutely essential that we make sure we do not see a drop-off in female employment rates, particularly as we see the end of furlough. I would also like to see continuing flexibility. The pandemic has caused a shift in working that has been fought for for years. It helps working parents. We should encourage it and see it continue.
To conclude, I welcome furlough, but continuing it for too long would risk women’s jobs in the long term. We need to focus on getting women economically active, back in work and supported by childcare.
The coronavirus pandemic has caused widespread suffering for too many individuals and communities across the UK. We have the worst of both worlds: in addition to recording the highest number of excess covid-19 deaths in Europe, we are facing our worst ever recession, which is almost twice as severe as comparable European nations.
The furlough scheme has been an indispensable lifeline to millions of workers during the pandemic, yet the Government intend to sever this crucial support, which will have devastating consequences for people in Leicester and across the country. More than 4 million workers are still on furlough just weeks before we reach the Chancellor’s October cliff edge. The latest data from the Office for National Statistics suggests that that is more than one in 10 workers, but in some sectors the figure is as high as 41%. The Government should be targeting support where it is needed most, such as in the arts, entertainment and recreation sector, and in accommodation and food services activities, not withdrawing it across the board.
The Government cannot simply turn their back on workers. With coronavirus cases spiking across the country and our testing system in crisis, they cannot blindly hope that this crisis will magically resolve itself. I am gravely concerned that the abrupt ending of the job retention scheme will put more lives at risk, especially among the working poor. It is impossible for impoverished people to comply with guidance on self-isolation and social distancing. Cutting the job retention scheme will disproportionately impact women, and without proper protection from racism in the workplace, it will disproportionately impact African, Asian and minority ethnic communities. It is therefore not just morally imperative but, in public health terms, in the best interests of everyone in our country that people’s basic needs are met.
My home city of Leicester has been hit particularly hard by the coronavirus. It has been an incredibly difficult and tumultuous time for our residents, who continue to face coronavirus restrictions that other parts of the country do not. The economic impact on our city has been immense. I have been helping many Leicester East residents to access support. In April, I wrote to the Chancellor, urging him to widen the job retention scheme and in a sense, this is what we are debating here today and it is particularly hard that we have to do so.
It may be hard for this Government of the super-rich to understand, but many residents in Leicester do not have savings to fall back on if the furlough scheme ends abruptly. Even before the coronavirus hit, my constituency was suffering from an unacceptable stagnation in living standards. As of April 2019, the average weekly income for full-time employees in Leicester East was £420. That is £130 less per week than in the east midlands as a whole, and £160 less than the UK average. I am particularly worried by the number of people claiming unemployment benefits in Leicester East, which has more than doubled since the UK lockdown began. In March 2020, 2,145 Leicester residents claimed unemployment benefits; by August, that had shot up by 143% to 5,210 people.
Now is the time for the Government to prove that they work for the majority of people in the UK who live paycheque to paycheque. That means, as we enter a probable second spike, that the wellbeing and security of our communities must be prioritised above all else.
I thank the hon. Member for North Ayrshire and Arran (Patricia Gibson) for securing this important debate.
Protecting the livelihoods of 9.6 million people—9.6 million people who were at risk of being laid off—has been at the heart of the Government’s coronavirus job retention scheme. That support is worth £37.5 billion. Since March, employers have been able to claim up to 80% of an individual’s monthly wage, up to a maximum of £2,500 per month. The scheme has been available for any employee paid via pay-as-you-earn across the entire UK. That is 29 million people.
By the time the scheme ends in October, it will have been in place for eight months. It was designed to help us through the most challenging period. I say to the hon. Member for Leicester East (Claudia Webbe) that the Chancellor has continually adjusted the scheme, so that we do not have a hard cliff edge. She may have missed it, but from July the Chancellor allowed adjustments for flexibility of working. That was absolutely right, to help people back into business and to help companies restart their operations. In August, employers were allowed to start contributing towards some of the costs of those salaries—around just 5%—to make the scheme affordable. We need to be clear: our scheme is more generous than any other European country in terms of its coverage. It extends to all employers, not just small businesses. On payments, the Government are paying 80% of an employee’s wage, with only modest requirements for company contributions. It is more generous than other countries and we have now seen many other countries all around the globe starting to wind down their schemes. The furlough scheme was right at the time, but things have changed. We should not continue a scheme that incentivises people to be economically inactive.
So we have a globe-leading response designed to protect and retain jobs. That is recognised on the high streets in villages, towns and cities across the UK. In my Warrington South constituency, the furlough scheme has protected 15,400 incomes, helping families through the most difficult period of the lockdown. But I hear from those families that they want to return to work. They want support to get back into jobs. We know the furlough scheme has saved jobs: more than half of all employees who were furloughed have now gone back to work. That comes from Office for National Statistics data released just this week. More than 90% of those who came off furlough before the start of June continue to work for and be paid by the same employer who furloughed them. That is evidence that the scheme is delivering on its aims of saving jobs and retaining the connection between employees and their workplace.
I took time during the recess to meet the team at Warrington jobcentre, who have done an incredible job of responding to claimants in a speedy manner so that people who needed payments got them quickly. It is fair to say that without the introduction of the universal credit system, that simply would not have been possible.
The UK came into this crisis in a strong position. Warrington’s economy remains one of the strongest in the north-west, thanks to careful Conservative management of the economy over the past 10 years. We came into the crisis with public finances in a good position, which enabled us to react strongly.
It is important to differentiate between the short term and the medium term. In the short run, we need to drive a recovery, as the Government are doing, including via the tax system and through more borrowing where necessary. But in the medium term, we need to restore sustainability to our public finances. That is what the British people expect from their Government. I know the Chancellor will be looking at creative, innovative and effective ways to support our economy as we move forward.
I congratulate my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) on securing the debate, and on her robust and eloquent speech. Like her, I want to again give a warm welcome to the job retention scheme, which has indeed operated like a lifeboat for many of my constituents and for people across the United Kingdom. I think that welcome is pretty much unanimous, but what I think Members are saying today, certainly on the Opposition Benches, is that, first, we believe there was and is room for some more people on that lifeboat, and that too many have been unfairly excluded from it. Secondly, having provided that life raft, it would be utterly nonsensical, a monumental mistake, to suddenly sink it or kick everybody off it at the end of October while we are still in very deep and dangerous waters, and a long way from safety.
The Government say that the scheme cannot last for ever—I do not think anybody in this House says that it should—but that is not a reason or justification for stopping it on 31 October. That is an arbitrary date. It bears no relation to where we are in the pandemic, or where we are in terms of opening up again and recovery taking hold. It means that an avalanche of viable jobs are just going to be destroyed. So it is disastrous for workers, bad for employers and bad news for the economic recovery. As my hon. Friend made clear, it is also bad for the Government’s balance sheet. We know that a quarter of the job retention scheme costs are recouped by the Exchequer straight away through social security savings and from tax paid by furloughed staff. As she pointed out, the analysis shows that, by extending the scheme by eight months, debt as a percentage of GDP would fall rather than increase, because of the impact it would have on growth in our economy.
I said specifically that the scheme would not continue for ever and it cannot continue for ever, but that should be based on an analysis of the economy, where we are at and the number of jobs available. Conservative Members keep telling us that people should be looking to move into employment, but any analysis by any major think-tank says that those job opportunities are just not there at the moment, so we have to wait for a time when the economy is on a more even keel, which will not, on any indication, be by 31 October.
As the hon. Gentleman possibly knows, the Liberal Democrats agree that the scheme should be kept going. We have specifically looked at June next year as a minimum, which would cost £10 billion. That is not much more than withdrawing the scheme would cost, as the Chancellor is proposing at the moment, and is a drop in the ocean compared with the eventual cost if we do not support the economy.
I agree wholeheartedly. I do not want to put a date on it today, but the costed proposal from the Scottish Government, which has been looked at by the National Institute of Economic and Social Research, is for an eight-month extension. That would save tens of thousands of jobs in Scotland, and even more across the United Kingdom, and pay for itself, because debt as a percentage of GDP would fall rather than rise. It makes perfect sense from every single point of view. It has to be about analysis rather than just picking a date in the calendar, which is essentially what the Government have done.
All in all, the scheme is a great investment, and a better one, as hon. Members have said, than the deadweight job retention bonus scheme. As we have heard, many countries are extending their similar schemes, and we should not be the outlier in that regard. There is an urgency about the situation, because employers are deciding right now what they are going to do with furloughed employees at the end of October, so we cannot wait. We need a commitment from the Government today.
The scheme does not require to be completely unchanged. We have heard about some of the flexibilities and the changes that were made as we went along, and more changes could be made as we go ahead. It could be targeted by sector, as some have suggested. There must be a focus on areas where there are local lockdowns or other restrictions. We could look at the other models that have been implemented by countries such as France and Germany, which involve short time and wage subsidies.
I join hon. Members in highlighting the desperate plight of those who have been left off the lifeboat altogether for totally unjust reasons. That includes a huge number of people who simply changed jobs at the wrong time; those who work only a small number of hours for a particular employer, which puts them below the minimum salary threshold; those paid in the form of dividends; and those working as PAYE freelancers, especially in industries such as TV and the arts, who have been hung out to dry.
Many came close to qualifying under the job retention scheme or the self-employment income support scheme, and it is heartbreaking that they were left qualifying for neither. The reality is that many have been left with nothing, or next to nothing, because they are not entitled to other support. Essentially, the Government response appears to be that it would be too hard to fix for everybody, but that is as nothing compared with the hardship that has been inflicted on my constituents.
In the context of the Government being happy to invest £10 billion in a job retention bonus scheme that is likely to have little impact, investing in support for those excluded people could be transformational for them. That may well be more labour-intensive for HMRC, rather than relying on real-time information submissions, but it can be done. As the Minister knows full well, there is a tax office in Cumbernauld that is set to close, possibly in the next few months. If he wants to keep that tax office open, I am sure that the employees there would be happy to do the work required to extend the scheme. At the end of the day, my constituents and the excluded across the UK are not asking for anything more than fairness. I hope that the Treasury will think again and offer those people a hand on to that lifeboat.
Order. I know that some Members have applied to speak in both Back-Bench debates and I do not think it would be fair if they lost out on both debates, but the only way that we can adjust for that is by lowering the time limit to three minutes. I apologise; I do not like three-minute debates. I made the point last week that we have two debates of a similar nature and it would have been rather better, and more Members would have been able to speak, if we had had just one debate on this issue. I call Anthony Browne for three minutes.
I congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) on securing this debate and my right hon. Friend the Chancellor on coming up with a policy so good that it gets a warm welcome from across the political spectrum. It is a delight to hear Labour and SNP Members praising Conservative party economic policy—a real triumph—but all good things come to an end. [Interruption.] I look forward to them praising the rest of the economic policies.
The proof is in the pudding. The latest Eurostat figures show that employment in the UK has dropped far less than in other European countries.
The second quarter this year versus the first quarter has seen a drop of 0.7%—that is half the drop in employment in Germany, one quarter the drop in France and one ninth the drop Ireland. We can demonstrably prove that we have been far more successful at preserving jobs in the UK.
Looking at the unemployment figures that we had just this week, there was a rise in unemployment, but it went from 3.9% to 4.1%. Most economic commentators believed that the rise in unemployment would be far greater. I very much welcome the fact that we have more strength in the labour market now than most people expected. Obviously, every job lost is bad news, and my heart goes out to anybody who has lost their job.
We have been hearing about the cliff edge, and there is a big question about how high that cliff edge is with 9.6 million people having been on furlough. Anecdotally, however, everyone I know who has been on furlough has now gone back to work. The latest figures from the ONS, which are from 15 August—over a month ago—show that only 11% of the workforce are on furlough. That is roughly 3 million people. If we look at the trajectory, we are probably now down to about 5%, with 1 million to 1.5 million still on furlough. I look forward to seeing the latest figures. We have another six weeks or so to go until the end of October, so it is not a cliff edge, but a tapering out. I very much welcome that, and again, that is tribute to the Chancellor’s policies and the flexibility, with employers being given nudges to get people back to work.
One of the most critical points is to understand the difference between protecting jobs, which is what the job retention scheme was about, and helping people find work at the end. There will be structural changes to the economy. The airline industry, for example, which the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) mentioned, will not be the same size—not next year, not the year after and not in three years’ time. What are we going to do for the people in the airline industry? Are we going to put them on the job retention scheme for ever? At some point, we have to move on, look forward and actually help people find jobs, and that is why I very much welcome the schemes that the Chancellor is focusing on now. Rather than paying people to stay at home and not work, we are providing incentives for employers, such as the kickstart scheme or the bonuses for apprenticeship, to help people who are out of work get back into work. That is the way forward.
The Labour party will do everything within its power to convince the Government that they need to find an urgent solution to the pending jobs crisis of withdrawing the job retention scheme next month. Trade unions and businesses agree. For us, jobs are not about statistics; jobs are about people, families and communities, and they just do not know what the future will bring. Time is running out. Redundancy notices are being written now. We are facing the worst economic crisis we have ever seen. My constituency is forecast to be the second worst hit place in the country, and that is why I am standing here today.
I look at our twin cities of Münster in Germany, where people have an additional 14 months’ security, or our twin city of Dijon in France, where people have until January and then a possible extension until July 2022. Workers in my city do not have that security and safety. They are scared because they could be on the dole before Christmas.
The Treasury should invest in these jobs because they are good jobs. The problem we saw with this Government after 2010—we are seeing it now—is that if we do not invest in good-quality jobs, we end up with low pay and low-wage jobs. That means low productivity and less money going back to the Treasury. That is why we are calling right now for more flexibility to be built into the job retention scheme and for help for the sectors that are struggling, such as tourism, hospitality and leisure, which are so dominant in my local economy.
Yesterday, I raised with the Prime Minister the fact that 17,700 people in my constituency are currently on furlough. Their future looks bleak unless the Government act. The 8 million people who visit York each year just are not there, and people in my constituency are saying that they are facing their third winter in a row as they move into the next season without the support they desperately need. Some 22% of jobs are forecast to go in York—one in five jobs. That is terrifying. That is why we need the Government to step up now. Time is not on our side.
Looking at companies in my city, employers are worried, too. Great Rail Journeys, established in 1947, has already had to lay off staff and has 80 members of staff currently furloughed. It helped people at the start of this crisis to cancel or postpone their bookings, and now they are not seeing more money coming in. We absolutely need to support these parts of the economy.
Finally, I say this to the Minister: I stand here for the sake of the livelihoods of my constituents. They need their jobs preserving, and I look to him to do that.
As we are all only too aware, neither the health crisis nor the economic crisis is over, and we are going into the winter. In both respects, the furlough scheme has a role to play to protect workers until our economic recovery is truly under way. I would like to thank the public servants who have administered the job retention schemes. In many cases, we have had much contact with them, and they have done an excellent job. Of course, as we have already heard, Germany and France have recognised this and taken the considered decision to extend their equivalent furlough schemes.
Let us consider the unequal fiscal settlement between Westminster and the devolved nations. While the main levers of our response, such as health, are devolved in Wales, Westminster doggedly refuses to cede further economic powers to the Welsh Government to underpin these health interventions. Even as the UK Government borrow their way out of the immediate crisis, Westminster continues to enforce an artificial cap on the Welsh Government’s borrowing ability. It is one rule for Westminster and another for the devolved nations.
Of course, this has an effect. Welsh Government-mandated local lockdowns without furlough support could mean families being forced to choose between putting food on the table and statutory sick pay of less than £100 a week. This is an unfair and an unworkable choice, and it highlights the real consequences of Westminster ending furlough too early for Wales. During the good times, refusing to allow Wales the financial means to help ourselves might be interpreted as dog in the manger behaviour, but in these hard times, it is wilfully obstructionist.
Our response is interconnected, but the UK Government intervene in unforeseen and possibly unforeseeable ways. For example, outdoor centres such as the Urdd in Glan-llyn near Bala in my constituency—but across north Wales and, I am sure, across England as well—are struggling as the Department for Education in England continues to forbid such school-based activities, yet the UK Government, rightly in my opinion, insist that schools should reopen and office workers go back to their offices. The workers at these outdoor centres are caught as the collateral between different policies, and where do they stand? They look to lose their livelihoods.
We believe that furlough must continue, specifically for severely affected sectors such as tourism, leisure, hospitality and the arts, which have lost a key proportion of their earnings season and are now heading into a bleak winter. Some of them tell me they have lost two thirds of their earnings season. The important message, if I could leave this with the House, is that these are not zombie businesses. Their business model was viable and they were flourishing before covid, and they only need to be conveyed safely through the winter season to have a viable and flourishing future. Anything else would be an abdication of responsibility by this Government and would risk undoing the collective sacrifice of the past several months across all four nations of the United Kingdom.
Our economy has contracted by one fifth in the last quarter, and it is clear that we have entered a great and deep recession. The Office for Budget Responsibility predicts that unemployment will peak in quarter 4 at between 9.7% and 13.2%. At 13.2%, that is absolutely unprecedented, at least according to the figures available from the Office for National Statistics, and even at 9.7% it is unlike anything we have seen for nearly 40 years. One in 10 people could be out of work. The Chancellor has said over and again that the economic challenges we are facing are unprecedented, and he is right to say that: the situation is unprecedented. The projected unemployment figures show that in black and white.
Of course, we have welcomed the job retention scheme and it has been a life support, as has been said, but why are we stopping the treatment when the economy is still sick? That is why I do not understand the reason for the blanket withdrawal of this scheme, especially after the Government’s mixed messaging and inability to implement a proper track and trace system, which is causing a second peak and local lockdowns up and down the country. The public health crisis is driving this recession, so the economic crisis will not go away until we get a grip of that. The Government need to look at what sectors are most affected and extend the scheme in those areas to keep people in their jobs.
As well as protecting jobs, we must also protect people’s rights at work. It is disgraceful how some employers are using this crisis to drive down pay and conditions. For example, the staff at British Gas are rightly standing up against the absolutely outrageous fire and rehire tactics of Centrica, their employer, and British Airways staff are going through the same challenges. That is not about getting people back to work; it is about putting millions of people’s jobs and security at risk.
Crises such as the one we are living through should not be seen as opportunities to restructure businesses for shareholders. Instead, we must come together to ensure that, in the Chancellor’s own words, no one is left behind. Well, 3 million people have been left behind, so we need to plug the gaps in the job retention scheme for the people who have begun to work after the cut-off point before the lockdown. We also need to extend the scheme where it is appropriate to do so and to defend the rights of people in work by banning the disgraceful fire and rehire tactics that are being used to force down wages and conditions.
Like many Members on both sides of the House who have spoken, I come to praise the furlough scheme and to beg the Government not to bury it. There is no doubt that it has saved many families from poverty over the past six months. A recent estimate shows that something like 9.6 million people have been on the furlough scheme, and there are probably 6 million still on it. The point made by many people here today is: why stop it now? That is a position that I absolutely support.
We are facing a really uncertain future, and this country will depend upon an effective test, trace and isolate process being in place if we are to live with this virus in the medium term. That, more than anything else, is what is needed to keep our economy up and running. Much has been said in the Chamber over the past week about testing and tracing, but I also want to highlight the point about isolating. If we want people to isolate effectively to keep infection rates down, we must provide them with the financial support to do so.
This is about more than the furlough scheme; it is also about the Government’s approach to the whole economy and how they will ride the economic dislocation that we will all face in the months to come. We are calling on the Government not just to extend the furlough scheme until next year but to make it available to anyone who needs it, because the weakness of targeting certain sectors is that people will be left out. As the hon. Member for Sheffield, Hallam (Olivia Blake) mentioned, over the past six months that has affected about 3 million people who earn their income in many different ways.
A lot of support seems to be targeted at people who pay mortgages and earn salaries, but we all know that there are many more ways to earn a living and that many people have been missed out. We need a strategy for the whole economy to help us with the approaching economic dislocation. We need investment in green jobs. We need those people who are going to lose their jobs in the near future to retrain urgently to work on retrofitting houses with better heating, on renewable power and on electric vehicle infrastructure. I echo what the hon. Member for Sevenoaks (Laura Trott) said about ensuring that the needs of women and minority groups are considered as we think about this just transition to a greener future.
I want to highlight the Public Accounts Committee’s findings on the furlough scheme in its inquiry last week. It found that between 5% and 10% of the scheme had been lost to fraud, so I urge the Government to look at that and to ensure that we have financial sustainability for the scheme for as long as it is needed. We need better controls to ensure that the money is being spent where it is needed. Echoing what my hon. Friend the Member for Edinburgh West (Christine Jardine) said in the earlier debate, I also urge the Government to cancel the job retention bonus scheme. Those businesses that have already got people back into work do not need the extra money. That money needs to go to those who are still facing an uncertain future.
We know it has been a tough time for business, just as it has been a tough time for everyone, and the support so far has been invaluable, but what was the alternative? Should we have allowed companies that had been trading successfully for many years and been responsible for thousands of well-paid, permanent, highly skilled jobs to go under because of a short-term disruption that has impacted on everyone? Some of the biggest employers in my constituency, such as Vauxhall and Airbus, fit that description. They should play a huge role in the future prosperity of my area, but at the moment they face uncertainty. We cannot afford to lose our place as a world leader in aviation. The Airbus plant at Broughton is a centre of excellence in wing-making and the workforce are among the most highly skilled in the sector. Those jobs deserve to be supported.
Turning to Vauxhall in Ellesmere Port, we were all very pleased to see production start again last month, although due to reduced demand in the car market and social distancing measures in the plant, not everyone has gone back in. As it seems clear that social distancing rules will be here for some time, getting back to full capacity may be some time off, so why is the support not being provided to recognise that? The automotive sector is not going to come out of this as quickly as other sectors. We need that support soon or we risk losing the very jobs that we have fought so long and so hard to keep.
We must not forget the 3 million or so excluded people who have not received any assistance at all. Some may be able to carry on, but as local lockdown restrictions continue to increase and the Government seem incapable of stopping a rise in infections, it is likely that there will be further economic damage to come—perhaps not as widespread as earlier this year, but to those caught up in it, totally ruinous. Those involved in the wedding industry and social clubs, for example, whose main business is dealing with large functions, cannot expect to be operating fully for a considerable time. We need a Government prepared to listen and prepared to act to develop a more nuanced and sector-specific package.
I hope that we will not keep hearing the same story from Conservative Members saying that we cannot pay people to sit at home forever, because if they actually listened to what we are saying, they would know that that is not what we are asking for. We want the businesses and sectors that were successful and were keeping people in employment before the pandemic struck to be recognised for what they are—an essential part of the UK economy that, going forward, we will need more than ever. We cannot afford to throw them under a bus now because of problems outside their control, because many of these jobs, particularly the well-paid, secure jobs in sectors like manufacturing, will not come back. We need a commitment from Government that they will provide long-term support to safeguard the future of businesses and to support jobs. Otherwise all the effort that has been put into job retention so far will have been for nothing.
The most recent figures we have suggest that there are 14,500 people furloughed in Ellesmere Port and Neston alone. Let that figure sink in—it is an awful lot of people. Hopefully many of them are returning to work, or will be shortly, but even if three quarters of them do so, unemployment will still double in my constituency. It has already doubled once this year as a result of the national lockdown, and we cannot afford for it to double again. Do this Government really want to preside over a 1980s-style jobs crisis? I really do not think they do.
In March, the Chancellor promised to do whatever it takes to get us through this crisis, but six months on, we now have one of the deepest recessions in the OECD. We have already seen the fastest rise in unemployment since the financial crisis, with almost 700,000 more people unemployed—and that is before the furlough scheme is wound down. This is set to happen in just 44 days’ time, which means that we are weeks away from an unemployment crisis cliff edge the likes of which this country has not seen in generations. The Bank of England predicts that more than 1 million jobs will go by Christmas, while others predict that ending furlough as planned will lead to 4.5 million people being unemployed—a level higher than even during the great depression of the 1930s. That includes an estimated nearly 6,500 jobs that are at risk in Coventry South. This would be an utter disaster. These are not just statistics; these are people’s lives. Every job lost is another family pushed closer to or deeper into poverty. It is another child going hungry at night. It is another sleepless night of worry about rent or mortgage payments and how the bills will be paid.
But this cliff edge is not inevitable. A deepening jobs crisis can be prevented—it just takes political will. Look at France, Germany, Ireland, New Zealand, Australia and elsewhere—their Governments have stepped in and extended wage support schemes. If they can do it, so can we. This is demanded by those from trade unions like mine, Unite, which last week launched the “SOS for jobs!” campaign, to the head of the CBI, who has said that it is wrong to pull away support at the end of October. I urge the Government: listen to trade unions and listen to businesses; do not pursue a reckless one-size-fits-all winding down of the furlough scheme, but instead step in and extend targeted support to protect jobs, workers and livelihoods, and bring in urgent measures to support everyone who fell through the cracks of the support scheme from the very beginning.
But the Government should not just leave it there. We do not just need to save jobs: we need to create new, good, unionised jobs. I urge the Government to invest in our industries and in our communities and bring forward a green new deal. This could create more than 1 million green new jobs, with programmes ranging from retrofitting homes to make them greener and bills cheaper, to building up green industries in areas like Coventry that have skilled workers and proud manufacturing industries.
These are urgent demands. We are at the edge of a jobs cliff edge. Workers in Coventry South need the Government to act to avoid an unemployment tsunami. I urge the Government: protect jobs now and invest in our green future before it is too late.
I congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) on achieving this debate. It must surely be evident to the Government from the number and variety of occasions when this subject is raised by Members in this place that there is a general feeling across the House and in the country that we need to continue the support that the job retention scheme has offered.
I will not subject right hon. and hon. Members to a repeat of my contribution to last week’s debate, other than to say that we are in a crisis in this country that poses the greatest threat to our health, our economy and the wellbeing of individual households across the UK of any in our lifetimes. It is only because of the strength of the job retention scheme so far that we have been able to protect about 10 million jobs. Seven million people are currently supported by the furlough scheme, and to withdraw it at the end of October seems rash and too soon.
A Government Member said a little while ago that the scheme got us through the worst of the crisis and there is no longer any need for it. Surely we all saw the news today that the north-east of England has gone back into lockdown, posing an immediate threat to jobs, retail and wholesale in that part of the country. If we were in any doubt, surely that is evidence that we need to continue to support all industrial sectors through the crisis.
As I mentioned earlier, it is estimated that continuing the scheme until June 2021 would cost the country about £10 billion. That might seem like a large amount of money, but it will be dwarfed into insignificance by the long-term cost to our economy, our wellbeing and each sector if we pull the rug from underneath them at the moment. There should, instead, be a bridge to transition us from where we are now to whatever our economy will look like afterwards. This is an opportunity to support families, to invest in a transition to green jobs and to ensure that this country has a future that is economically stable.
Millions of people in this country who are currently on the furlough scheme look to us for support and reassurance about their future, and to hear that they will not face the financial hardship that many of them fear. It is incumbent on us to ensure that we do not let them down by removing that support too soon.
The coronavirus job retention scheme is a pragmatic approach to supporting workers, protecting jobs and bolstering the economy for a rapid recovery after lockdown. It has been a relief for many of my constituents to be placed on furlough rather than being made redundant, but many of those same constituents face fear and anxiety about the Chancellor’s cliff edge next month. It is critical that the Government act with urgency to extend the furlough, focusing on sectors of the economy that have been particularly hard hit by coronavirus and for which operation as normal is not yet possible.
Unemployment causes economic hardship, but it also has a devastating effect on health and wellbeing. It increases depression and anxiety, cardiovascular disease and mortality. That is why the scheme matters so much. Mass unemployment is not a price that communities up and down the country can afford to pay for the pandemic. We need a flexible approach to furlough that is targeted at sectors of the economy that provide good jobs, but that have been particularly hard hit by coronavirus and cannot return to business as usual.
In my constituency, we benefit enormously from cultural industries and the performing arts—both national institutions in central London and local theatres such as South London theatre and Brixton House, which is due to open a brand new building this year, and grassroots music venues. They make culture accessible and provide vital experience and employment, particularly for our young people from black, Asian and minority ethnic backgrounds. The cultural sector helps us to process the events going on around us, which is more important than ever in this time of turmoil. The sector needs sustained support if we are not to lose the precious things it adds to our communities and our society.
ExcludedUK estimates that more than 2 million self-employed people have been left without meaningful support during the coronavirus pandemic. I have been contacted by countless constituents who have fallen through the gaps. The scheme is simply too inflexible and does not account for diverse forms of self-employment; I wish to highlight, in particular, the newly self-employed, people taking parental leave or sick leave in the past three years, and those with a combination of PAYE and earnings from self-employment.
The coronavirus pandemic has brought enough heartbreak and tragedy to our communities, and I urge the Chancellor to act now, to show flexibility and creativity, and to avoid adding the tragedy of mass unemployment to the burden our communities have to bear.
I congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) on securing this important debate. Last week’s Opposition day debate on the furlough scheme demonstrated that there is huge demand in all parts of the House for raising constituents’ cases, so we have a welcome further opportunity to do that today. Since March, we have all been receiving a huge amount of correspondence from constituents whose livelihoods have been affected by the pandemic. I wish to take a moment to pay tribute to my casework team, who were newly hired just as the pandemic hit and have done a fantastic job in getting up to speed and directing so many constituents to the different, varied and sometimes complex support schemes run by local authorities, the Scottish Government and the UK Government.
Across the whole of Fife nearly 30% of all employees were furloughed. That is a huge number and I give credit to the Treasury for its implementation of the scheme. It is an example of how pooling and sharing resources has allowed the prevention of huge job losses. We have already heard today that all this is put in jeopardy if the scheme ends next month unilaterally, and I re-echo the calls that have been made. I cannot stress enough how vital the scheme is to so many businesses in my constituency. But for all the good the furlough has done, the painful reality for a not insignificant minority of people is that they have missed out on the scheme, for reasons that are, in essence, arbitrary. I welcome the recognition of that in the motion.
For some, that reason is just a date. One of my constituents had not been in work, he started a new job on 29 February and the cut-off date meant he was ineligible for the scheme. He was let go from his job and there was no recent employer to rehire him. Another constituent was placed in a similar situation. She was switching employment just as covid-19 hit, and her new employer could not open the business because of the lockdown and so simply could not take her on. The rules of the job retention scheme were adjusted so that old employers could rehire those people caught in limbo, but that was a workaround, not a solution that is an any way meaningful. She was eligible for furlough but was not furloughed because her old employer refused to rehire her so that she could be furloughed, although that would have come at no cost to them. So she has missed out and instead has had to apply for jobseeker’s allowance.
Even for those who were furloughed the scheme has not always been perfect. One constituent, a childcare agency worker on a zero-hours contract, contacted me because the way furlough is calculated has meant that her regular full-time hours are not considered, and she has experienced an incredibly severe drop in earnings. That has meant an incredibly tough few months trying to survive on very little.
Those are three cases, but there are many more. For thousands of people in my constituency, this has been a difficult year. A lot of people who never thought they would be relying on our welfare system are now doing so because they did not meet arbitrary eligibility criteria and slipped through the gaps. It will now be clear to so many people that what is deemed as our “safety net” does not work. As we look to rebuild, I hope we will reflect on our welfare system and on whether it provides the right support for those who need it. I am increasingly convinced that a more substantial, universal safety net has to be the way forward.
Thank you, Mr Deputy Speaker.
I thank the Minister and the Government for all that they have done through the furlough scheme and the help for businesses, because without that many, many businesses would have failed. I wish to make four quick points. First, the prospect of an estimated 4 million unemployed is, in itself, a reason to pull out all the stops to see employees able to get back on their feet and start back in their paid roles. It is important that provision is made and consideration is given to how that might happen.
My local high street has survived and seems to be getting out the other side of this, but we have tourism in our area—it is a core economic policy for the Ards and North Down Borough Council—-so we need to ensure that that is still there. I ask the Minister seriously to consider the four-day working week as a possibility, looking at the costs and benefits at this time. I implore the Government to look proactively for solutions, such as a four-day week, rather than simply close the scheme.
I would also like to quickly mention the airline and aerospace industry. Furlough is the only way that some of my constituents can pay their bills, and to go from a pilot’s wages to universal credit is just not on. If those people are back in their job in a few months’ time, they will be paying high taxes and national insurance. My final point is about the many businesses slowly bringing staff off furlough. I believe it is important in the short term to ensure that staff are retained on furlough, so that they have those jobs in the long term.
I believe I have eight minutes to speak, and I will do my best to keep to it. These are important debates, and I have some sympathy with your view, Mr Deputy Speaker, about seeing whether we can merge them.
I thank my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) for leading the debate with a fantastic and robust speech. The key point she made was about the costs versus the savings of the job retention scheme, with the social cost of ending it too early being that millions of jobs will be affected, including in the aviation sector.
My hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) made the important point that we are in deep and dangerous waters, and we could extend the furlough scheme for eight months, rather than end it on an arbitrary date. I certainly support his view that tax offices should be kept open. He made the case well for Cumbernauld, and I have opposed HMRC office closures across the United Kingdom. Perhaps the Treasury could take a leaf out of the Department for Work and Pensions’ book. Two years ago, half the jobcentres in Glasgow were closed, and the Department for Work and Pensions is now having to reopen them as a result of the demand that it believes will be placed on them. It is also having to look at opening jobcentres in other areas where it closed them two years ago.
My hon. Friend the Member for North Ayrshire and Arran referred to the bewildering vote in Holyrood last night, but I have to say, it was not as bewildering as the statements we heard from a number of Conservative colleagues that the job retention scheme was somehow a key feature of Conservative economic theory. That was not the case in March, when such a scheme had not yet been put in place by the UK, and when Opposition parties were raising examples of schemes put in place by other countries to support workers. It was that pressure, I would suggest, from all Opposition parties and Opposition Members asking the Government to look at international examples and put in place a scheme to protect workers that was the reason for the job retention scheme.
The hon. Members for Edinburgh West (Christine Jardine) and for Ellesmere Port and Neston (Justin Madders) made an important point about local lockdowns. If, for reasons of public health, there must be a local lockdown in an area of the United Kingdom and the job retention scheme no longer exists, what support will be made available? Are we really suggesting that people and businesses should make a choice whether to follow the public health guidance or to challenge and ignore it because they are not getting support? That is a dangerous path to go down and a reason why we should consider extending the scheme. No one should have to make that choice. There were optimistic forecasts in March that this would be a three or four-month event, and then things would suddenly get back to normal, but that is not the case, and I think the optimistic forecasts about what happens next will also not take place.
I echo the remarks of the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts), who rightly said that people will have to make choices, and some of those choices are unacceptable if the job retention scheme is not extended. I also echo the remarks of the hon. Member for North East Fife (Wendy Chamberlain). The pressure on the constituency office teams of every Member since March has been considerable. Whether you have been a Member for decades or came in the door in December, we can all agree that this is the busiest that any constituency office team has been. Part of the reason is having to address inquiries from constituents about the nuts and bolts of the job retention scheme. For example, some people who were new starts in March were missing out, and we had to pressure the Government to make those sorts of changes.
As has been said, extending the furlough scheme by eight months would save 61,000 jobs. In August, in Scotland, 34.4% of staff in the accommodation and food services were still on furlough; in the arts, entertainment and recreation sector, it was 57.5%. These are key sectors of the economy and are viable jobs going forward. Sectors such as the arts, entertainment and recreation, for example, are key parts of the economy that take on young workers and people not interested in working in a conventional workplace—say, an office or factory—and are key to going forward and a key part of the rebuild and of putting young people into work.
We can no longer have vague promises of creative solutions. As several Members have said, according to some estimates, unemployment could be greater than in the great depression of the 1930s. According to some assumptions, there could be 4.5 million people unemployed—even higher than the unemployment in the 1930s. We are seeing an explosion of redundancies, while the Government are saying they will do whatever it takes, but the point has been well made: it has not stopped Centrica, British Airways and other employers who wish to fire and rehire. I hope the Government will look very sympathetically at the private Member’s Bill put forward by my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands), because that practice really needs to end.
We are in a serious situation now, given the number of employers who have announced job losses: Rolls-Royce, 9,000; Jaguar Land Rover, 1,100; John Lewis, 1,300; Boots, 4,000; Marks and Spencer, 950; Alexander Dennis, a bus company in Falkirk, 650; Costa, 1,650. These will all have serious economic impacts, and we need to do everything we can to ensure that those jobs are saved. I hope the Government do accept the demands of the Treasury Select Committee that they look carefully at extending the job retention scheme. I hope they will do that.
In closing, not one Member has said that the job retention scheme should go on forever, but extending it by eight months is a sensible proposition, and as others have said, we need to look at what other countries are doing and match that.
I congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) and the Backbench Business Committee on securing this debate.
We have heard some excellent contributions from across the House, and it has been reassuring to hear so much consensus, not just on the Labour Benches, but from SNP Members and the Liberal Democrats. We even heard a short but sweet contribution from the hon. Member for Strangford (Jim Shannon), and not forgetting of course the contribution from Plaid Cymru too.
Alongside those excellent contributions was a rather depressing sense of déjà vu, because just last week the shadow Chancellor warned that our country was in the grip of a jobs crisis, and she warned that the crisis would intensify if the Government failed to change course. This week, those warnings came to pass, with the latest unemployment figures. Between March and August, 695,000 workers disappeared from the payroll and the claimant count more than doubled and now stands at 2.7 million. The number of vacancies in August was almost half that we saw at the same time last year. We have warned for months that a one-size-fits-all approach risks fuelling unemployment, ruining lives and risking the economic recovery that we need following this crisis; but, instead of listening, the Chancellor seems determined to roll back one of the Government’s most effective responses to this crisis, the job retention scheme.
A total of 9.6 million jobs have been furloughed through the job retention scheme, including 17,500 in my constituency. It peaked at 8.9 million on 8 May, and most recent estimates showed 13% of all jobs still furloughed in the two weeks up to 9 August. As we heard from my hon. Friend the Member for Leicester East (Claudia Webbe), in so many sectors the picture is far bleaker: 51% of those in arts, entertainment and recreation furloughed; 27% of those in accommodation and food services furloughed; and 19% of those in transport and storage furloughed.
That is not surprising. We have said consistently that there are many businesses and some sectors that are inevitably hit harder and for longer, through no fault of their own. Indeed, at this very moment more communities across the country are facing local lockdown. More businesses are facing closure or severe disruption through no fault of their own.
As my hon. Friend the Member for Coventry South (Zarah Sultana) reminded us, the Chancellor said at the outset of the crisis that he would do “whatever it takes”, but there are communities across this country—millions of people, in fact—who have had no support at all, who do not think the Chancellor is doing whatever it takes. In fact, a Chancellor who we were happy to support when he announced the job retention scheme is looking increasingly stubborn and inflexible, determined to roll back the furlough scheme by asking employers already to contribute more to the costs and rolling it up altogether in just six weeks’ time.
The IPPR has warned that 2 million jobs could be lost as a result of that single decision. As my hon. Friend the Member for Sheffield, Hallam (Olivia Blake) spoke of so powerfully, the economic crisis we are experiencing is likely to worsen if the Government continue on this course, entrenching inequality in our country that was already intolerable before this crisis even began.
The hon. Member for South Cambridgeshire (Anthony Browne) pointed out, possibly quite reasonably, that it is unusual to see a policy from a Conservative Chancellor receiving so much support and acclamation from the Opposition Benches, but there is a good reason for that. As we have already heard from other hon. Members, the job retention scheme did not fall out of the sky and it certainly was not the brainchild of the Chancellor alone. The reason it was so successful was that the Chancellor listened to calls from the Opposition for wage support and even got business representatives and the trade unions around the table to design the scheme.
There is a model there for the Chancellor to follow: one that is listening, one that is inclusive and one that recognises that if we are serious about tackling economic inequality and injustice and about getting Britain working again, we need the voice of the workers at the table. Sadly, the Chancellor has stopped listening to the voice of labour—the official voice of labour represented here on the Opposition Benches, and the official voice of labour that we heard this week at the TUC congress.
If the Chancellor will not listen to the voice of labour, if he has stopped caring about the interests of labour and workers across the country, perhaps he will listen to business voices—the CBI, the Federation of Small Businesses, the British Chamber of Commerce, and businesses up and down the country—calling on him to show some understanding of the long-tail impact of this public health crisis and the impact it is having on their businesses and their ability to keep good people in good jobs, in viable businesses that just need that bit more time.
Perhaps the Chancellor will listen to the economists and the think tanks urging him to show a more flexible approach to furlough and to take, as we have called for, a sector-by-sector approach to ending the furlough scheme. If he will not listen to them, perhaps he will listen to his own MPs. An increasing number of Conservative MPs have said publicly what many more are saying privately in the Tea Room: that it is a mistake to wind up the furlough scheme and a mistake to take this one-size-fits-all approach.
Indeed, that call was reflected in the cross-party but Conservative-led Treasury Committee of this House.
We heard from the hon. Member for Wimbledon (Stephen Hammond) that the Government are looking at taking a more creative and innovative approach. We have heard again today, as we have heard so often from Government Members, that it would be a mistake to continue with a blanket extension of the furlough scheme. No one has ever called for a blanket extension of the furlough scheme. The fact that so many fewer people are currently furloughed tells us that a blanket extension is not necessary. However, we know that many people in many sectors continue to be disproportionately affected and it is right that the Government should reflect that in a more flexible approach to the job retention scheme.
We shall doubtless hear again in the next debate the point that my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) made so powerfully. Let us not forget the 3 million people in this country who have not benefited from the Chancellor’s one-size-fits-all approach: the excluded. Other countries show us that a different way and a different choice are possible. There have been extended schemes in the Republic of Ireland, France and Germany. In a powerful speech, my hon. Friend the Member for York Central (Rachael Maskell) mentioned that the twin towns of Münster in Germany and Dijon in France have extended schemes. Our Government’s approach just does not cut the mustard.
As my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) among others pointed out, we are still waiting for the aviation deal that was promised in March. While on that point, I must reply to the claim by Scottish National party Members that the Scottish Labour party opposes calling on the UK Government to extend the furlough scheme. Last night, the SNP attempted to rewrite a Scottish Labour motion setting out the action needed by the Scottish Government to bail out the aviation sector and provide the support it needs. I cannot say I am surprised because it is a pattern that we often see. SNP Members are happy to come here and rightly challenge the UK Government to use their powers and resources to support jobs, workers and industries across the country, but the SNP Government are not prepared to use their own powers and resources. They are good at passing the buck, but terrible at taking responsibility for their decisions.
The hon. Member for Sevenoaks (Laura Trott) made some powerful points about the need to get women into work. She talked about the support that should be on offer for women, particularly childcare, retraining and providing new opportunities for people who find themselves out of work. That support is not yet in place and I hope that the Government hear her call.
We are told that we should let people lose their jobs now and be released from furlough because they will find other jobs. Those who make that claim are apparently ignorant of the fact that there are no other jobs yet for people to go to and that putting people out of work now means that they are staring at the grim reality of Britain’s social insecurity system.
I urge the Government to consider the costs of not acting, of allowing unemployment to rise further, of the personal tragedies and human misery that means for families across the country, and of the further, avoidable damage it will inflict on our regional economies and our economy as a whole. Maybe then those on the Treasury Bench will go back to the Department of Health and Social Care and say that until the test, track and trace system is working properly, the economic and public health damage will be self-inflicted by the Government, and Britain will pay a heavy price, not just now but in the longer term. That will be on the Government.
I congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) on introducing the motion and I thank the Backbench Business Committee for granting the debate. I thank other hon. Members for their contributions to an energetic, well-attended, engaged and interesting debate. As the hon. Lady will know—as we are all aware—we in this House continue to face an enormous challenge.
As has been widely recognised across the Chamber, since March, the Government have acted with great determination to protect people’s livelihoods. Indeed, I think it is recognised that our response has been one of the most comprehensive and generous anywhere in the world. The Office for Budget Responsibility and the Bank of England agree that the Government’s actions in the face of the pandemic have helped to safeguard millions of jobs and businesses.
The job retention scheme—the furlough scheme, as it has been described—has been central to that response. I will talk a little about that and then come on to some of the very interesting points made by colleagues from across the House. As the House will be aware, the furlough scheme was designed and implemented at extraordinary speed, and launched on 20 April, just a month after its announcement. Its purpose has been to help those who would otherwise have been made unemployed and to support businesses as quickly as we could. I do not think that anyone has questioned its success, as I have mentioned. According to the latest figures available, the CJRS has helped 1.2 million employers across the UK to furlough 9.6 million jobs, at a value of some £35.4 billion.
The hon. Member for Ilford North (Wes Streeting) will not often hear me say this, but how right he was to describe this as one of the Government’s most effective schemes. It is a hotly contested area, and there are many schemes that he could have chosen, but I think I heard him say—I wait to be corrected—that this was one of the most effective. He is absolutely right about that: it was, and it is. Detailed figures show that, up to 30 June, the CJRS had supported nearly 800,000 jobs furloughed in Scotland, more than 400,000 in Wales and almost 250,000 in Northern Ireland. The hon. Member for North Ayrshire and Arran was right to say that it would be churlish not to recognise the CJRS as a laudable scheme. It has had an enormous impact on every single constituency represented in this Chamber.
Opposition Members have pointed to other countries that they would like the furlough scheme to emulate. Of course, they are welcome to do that. They might, for example, want us to contribute at the same wage rate as in Spain, but in fact our furlough scheme does more than that. They might want us to support the same range of businesses as the furlough scheme in New Zealand does, but in fact we are supporting a much wider range of businesses. They might want our scheme to run for as long as that originally proposed in Denmark, but in fact our scheme runs for twice as long. In a majority of sectors in France, which has been mentioned on several occasions, businesses have had to make an employer contribution of 40%, which is significantly higher than in the UK. Why should we imitate that scheme? Why should we have a 40% contribution rate? I think that would be wrong.
At its conclusion in October, the furlough scheme will have been open for eight months from start to finish. Of course, it is understandable in that context that Opposition Members should be calling for an extension, but the Government’s view is that it is in nobody’s interests for the scheme to continue forever—I am not suggesting that that has been widely promoted as a policy option by Opposition Members—and, if it does not, it has to be brought to an end at some point. The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) mentioned that it was important to do that on the basis of analysis. Let me reassure him that no one does more analysis than the Treasury does. We look at these issues every which way. We draw on an extremely wide spread of data sources across a number of different areas of behaviour, in both the consumer sector and the wider productive economy. Our view, which has been expressed separately and independently by Andy Haldane, who has been mentioned in this debate, is that it would be irresponsible to trap people in jobs that can exist only because of Government subsidy.
My hon. Friend the Member for Sevenoaks (Laura Trott) was absolutely right to point to the importance of energising the possibilities for new work, new opportunities and new scope in the labour market, particularly for women. However, the onus must be on us to provide fresh work opportunities for those who need them across the UK, and the Government have been doing just that through the Chancellor’s plan for jobs.
As the House will know, we are thoroughly committed to the responsible management of the public finances, in part because no one can say how long this pandemic will last for. As has been recognised by none other than the OECD, the work of the last 10 years has given us relatively strong public finances, which we have achieved by bringing borrowing and public debt under control. That is what we are needing to draw on in tackling the challenges posed by covid-19. With Government debt now exceeding the size of UK economy for the first time in more than 50 years, we must continue to balance the needs of the present moment with the need to maintain the country on a sustainable financial footing.
The Minister will have heard a couple of folk refer to analysis that shows that by extending the scheme for eight months, debt as a percentage of GDP will fall rather than rise because of the positive impact that it would have on growth and total GDP.
I have not seen the National Institute of Economic and Social Research analysis that the hon. Gentleman talks about, which is somewhat embarrassing, since I am a governor of the national institute—I shall ask it to forward that to me. I am pleased to say that it is independent of its governors and rightly so. I will certainly look at that.
The point I would make is that although the scheme as such is winding down, Government support is very much not. It continues across a very wide range of packages and includes, as colleagues rightly mentioned, the bonus. I think that that is much underestimated by colleagues—it is a very important element. That guarantees a one-off payment of £1,000 to employers for each furloughed employee they bring back to do meaningful work and earn an average of £520 a month between November and January, and who continues to be employed by the same employer as at 31 January 2021.
I have very little time—if the hon. Member does not mind, I will proceed. That bonus is an important aspect because it provides a marginal benefit to a very large group of relatively low-paid employees. Of course, we have also launched the kickstart scheme.
Let me pick up a couple of points that have been raised. The hon. Member for North Ayrshire and Arran said that it is very important for Scotland to have powers of its own in this context. I echo again—I am becoming like a broken record—the hon. Member for Ilford North who said that the Scottish Government are good at passing the buck and bad at taking responsibility. The Scottish Government House has tax-raising powers devolved through the Silk commission. Let it use those. At the moment, the vast majority of money spent in Scotland and in Wales is spent by and raised through local government—regional government—but raised through UK Government, and that is crucial.
My hon. Friend the Member for Warrington South (Andy Carter) rightly pointed out that the Chancellor has included many flexibilities in the design of the furlough scheme, and it is important to recognise that it has evolved over time. It has not been a fixed thing. My hon. Friend the Member for South Cambridgeshire (Anthony Browne) rightly pointed out that the unemployment drop had been much less in the UK than elsewhere and that there had been a rapid fall in furloughing. He pointed to the tapering out that that implied and he is right about that.
The hon. Member for Richmond Park (Sarah Olney) was right to raise the point about the need for green jobs. The Government absolutely share that view, and that is one of the things that successive policies have focused on. I have no doubt that it will be an important part of the consideration in the net-zero review and all the other measures that are presently in place.
Quickly, on the issue of fraud—if I may for a second before winding up, Mr Deputy Speaker—it is much misunderstood; the planning assumptions that were outlined in the evidence from the CEO of HMRC are just planning assumptions, and we wait to see what the final numbers will be after enforcement. He has said in terms that he does not rule out penalties and potentially criminal procedures to bring that back under control—
I will not detain the House any longer, Mr Deputy Speaker. I know that there is another important debate on the horizon. I just thank everyone who has participated, and I am deeply disappointed that the Minister has not listened to the calls and continues to tell us how lucky we are with the support that we already have. That is cold comfort to those who are worried about their homes, their jobs and their future.
Question put and agreed to.
That this House welcomes the Coronavirus Job Retention Scheme and calls on the Government to examine, improve and extend that scheme’s operation and application to ensure that people who started work after the furlough scheme started are included and that this support continues until the UK’s economy is more robust, so that the goal of retaining as many jobs as possible is secured.
Like last week, I will not suspend the House; I will just pause while the Dispatch Boxes are sanitised and the main players take their positions, please, as others leave the Chamber. Remember “hands, face and space” and please leave socially distanced.
To let those who are taking part in the next debate know, the wind-ups will begin at 4.30 pm. Those participating in the wind-ups will have half an hour between them; it will be eight minutes, 10 minutes and 10 minutes, and then, if time allows, Caroline Lucas, who will open the debate, will have two minutes at the very end. This debate, like the last, is well over-subscribed, and we are much later going into the debate because of previous activities, so, following Caroline Lucas’s opening speech, there will be a four-minute limit. That is likely to be reduced later by Madam Deputy Speaker.