Economy Update

Alison Thewliss Excerpts

Wednesday 16th June 2021 Commons Chamber

[Steve Barclay]

My right hon. Friend draws attention to exactly why the attack from the Opposition is misplaced and why the furlough taper is justified—because there is demand for labour from businesses. He also knows that it is part of the wider package of support. As a former Secretary of State, he has done a huge amount to champion the need to support people looking for work. That is what the doubling of the number of work coaches is doing. We announced a further £2.6 billion of additional support for the Department for Work and Pensions in the spending review, alongside further specific measures such as the restart scheme, to tackle the situation of those who have been unemployed for over a year. Over 1 million unemployed people on universal credit will have access to that scheme.

This is about a combination of the furlough, which is providing much-needed support but needs to taper, and a wider plan for jobs, including the restart scheme, the kickstart scheme, the tripling of traineeships, and the increase in the apprenticeships incentive to £3,000—a whole package alongside the doubling of the number of work coaches.

[Alison Thewliss (Glasgow Central) (SNP) [V]]

My thoughts are also with the family and friends of Jo Cox.

Over the past 15 months, companies in sectors such as tourism, travel, hospitality, events, the arts, the night-time economy and weddings—and their supply chains—have been building up debts and have not even gotten close yet to breaking even. It is shameful that not an extra penny of support is being announced for them today. The debt incurred by businesses could take a decade to pay back and will be a drag on recovery. The Treasury Committee was told last week by the British Retail Consortium and UKHospitality that their estimate of commercial rent arrears alone stands at over £5 billion. The Minister has extended the moratorium today and spoken of legislation, but what is his plan to deal with this debt? He asks businesses to start paying back, but with what?

Under the Treasury’s furlough scheme, businesses must pay an additional 10% of their employees’ wages on 1 July, rising to 20% in August, before the scheme is due to end in September. When this happened last year, businesses could not cope with the costs and people lost their jobs. Kate Nicholls of UKHospitality has called this situation unsustainable, and the Federation of Small Businesses has called for urgent additional support.

So will the Minister delay the furlough increase, and will he now extend furlough and the self-employment income support scheme for as long as they are required? Will he act to support those like the Blue Dog employees in Glasgow, whose employer’s behaviour has meant that they have not received the payments they were entitled to? Will he finally—finally—put things right for the millions unjustifiably excluded from UK Government support schemes, such as those on short-term pay-as-you-earn contracts? Many have faced absolute financial ruin through no fault of their own, and it is high time they got support, and an apology from the Minister. Will he make the VAT cut to 5% permanent to give hospitality, tourism and events a much-needed boost into next year, and extend it to the hair, beauty and personal services sector? Will he keep the universal credit uplift and make an increase to sick pay?

The UK currently has the lowest stimulus package of any G7 country despite suffering the worst economic slump. We now need to boost it like Biden with a major fiscal stimulus of at least £100 billion. There is so much more that Scotland would do with the economic levers if we had access to them—so if the Minister will not act, will he give Scotland the power to do so?

[Steve Barclay]

The Scottish Government are still not using all the powers available to them on tax and welfare, and I always feel that before they seek further powers it would be useful for them to use fully the ones they already have. I found it slightly odd that the hon. Lady said that not a penny of support had been announced, because the whole point of the package that was announced was the extensive support going on until the end of September. She seems to be ignoring that and suggesting that everything should start afresh from today.

The hon. Lady mentioned business rates, which I picked up on earlier. This financial year, over 90% of businesses in the retail, hospitality and leisure sector that benefited from the 100% business rates holiday last year will receive a 75% cut in their business rates for the full year to March 2022. Let me just put that in context. In that last year, that tax cut cost £10 billion. This year, it is an additional £6 billion. The hon. Lady says that not a penny has been announced, but there is a further £6 billion of tax cuts on business relief this year in addition to last year. I think it is worth remembering the wider picture of the £352 billion of support.

The hon. Lady mentioned universal credit. We have been very clear from the start that it was a temporary uplift; my right hon. Friend the Chancellor set that out at the time. She also mentioned delaying furlough. As my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) mentioned earlier, there are good reasons why it is not in people’s interests to be on furlough for extended periods of time if their job has disappeared and is not going to come back and if there are other businesses that want to employ that labour. The furlough has achieved its main purpose in retaining the link between labour and business and allowed businesses to bounce back better as a result. So before asking for new powers, the Scottish Government should be focusing on the delivery of their response to covid and recognising the fact that we have been able to respond in this way because we have the strength of one United Kingdom. It is through this wider resilience that we have been able to put together a package of the size that the Chancellor has done.