Economic Outlook and Furlough Scheme Changes

Andrew Gwynne Excerpts

Tuesday 16th June 2020 Commons Chamber

[Jesse Norman]

I recognise that there are some people in that situation, and it is very unfortunate that they may not be able to qualify for either scheme. To be clear, that would mean that they could not have been on a PAYE scheme within the past three years, as described by the rules, or indeed qualify under the self-employment scheme for other reasons. However, we take the point that my hon. Friend makes. We have discussed this in detail and I have explained to the House, again in some detail, why it is hard to reach those people, but we continue to look at that very closely.

[Andrew Gwynne (Denton and Reddish) (Lab) [V]]

Today’s unemployment data shows that 11,400 across Denton and Reddish are furloughed. There are 3,950 claimants— 2,000 higher than in March—and 800 of those are now under 24. In Greater Manchester, Diane Modahl has been appointed as chair of the new young persons taskforce, which will help to develop a young persons guarantee, but what more can the Government do nationally to help ensure that our young people are not left behind?

[Jesse Norman]

Again, I almost did not recognise the hon. Gentleman—I congratulate him on his coronavirus hair growth. I think the point that he raises is absolutely right. We are of course looking at the differential impact of the pandemic across the age spectrum, as well as regionally and across other dimensions. It has been well recognised and recommended by many that energetic action in the labour market to support young people and those making a transition between one job and another, or going back into work, will be very much something for us to focus on over the next few years.

Future Relationship with the EU

Andrew Gwynne Excerpts

Tuesday 9th June 2020 Commons Chamber

[Penny Mordaunt]

My hon. Friend is damn right.

[Andrew Gwynne (Denton and Reddish) (Lab) [V]]

One of the concerns has always been the potential for a future British Government to deregulate hard-fought workers’ rights. That ought not to be a worry if there is political will, so have the Government met trade unions and the TUC about maintaining and, indeed, improving our employment standards outside of the EU once the transition period ends in December?

[Penny Mordaunt]

Of course, not only the Cabinet Office but many other Government Departments have negotiations with a wide range of stakeholders, including the unions. The British people value the things that the hon. Gentleman has spoken about. They value their rights. They value high standards. They value high environmental standards, and all the other things that many Members care about, because they know their constituents care about them. On these things, including particularly on employment law, the UK has led the pack, so I would say to him: have a little faith. It is his job not to trust the Government, but he should trust the people.

Covid-19: Economic Package

Andrew Gwynne Excerpts

Tuesday 12th May 2020 Commons Chamber

[Mr Speaker]

Returning to the north-west, let us hear from Andrew Gwynne.

[Andrew Gwynne (Denton and Reddish) (Lab) [V]]

Although I welcome the announcement on furlough, the Chancellor knows that the Government’s covid response would have completely stalled without local government, yet our councils are now financially on the brink. The extra funding does not cover all the costs, which is something that Ministers promised. Will he ensure that our councils are fully reimbursed for all covid-related costs and lost income and protect the sector that has protected us?

[Rishi Sunak]

In a moment of nostalgia, let me say that the hon. Gentleman and I have a shared passion for local government and an admiration for the work that they do, and I know that he will remain an advocate of theirs. They have been provided with more than £3 billion of extra support. Of course, we are in constant dialogue with local government, whether in social care or others, to ensure that they get the financial resources that they need.

The Economy

Andrew Gwynne Excerpts

Monday 27th April 2020 Commons Chamber

[Rishi Sunak]

Without knowing the particular details of those businesses, I can say that many businesses in the retail, leisure and hospitality trade will be eligible for cash grants of £25,000. Also, all businesses can use the furlough scheme, which is significant, and there will be business rates holidays for those businesses. Furthermore, the statutory sick pay rebate scheme I announced earlier will be up and running next month, which will allow businesses to apply for a rebate on their statutory sick pay bill for up to 14 days per employee. That could benefit businesses by up to £48,000 as well. I hope that all those packages put together provide some relief to my hon. Friend’s business and many others.

[Andrew Gwynne (Denton and Reddish) (Lab) [V]]

The Chancellor rightly stepped in to do the right thing by many of our businesses as covid-19 hit our economy, but is he aware that there is a small group of people who took on pub tenancies between the last eligible date he set in the grant rules and the lockdown? I have three in my constituency. It is a sizeable financial commitment, and even more so when they then cannot trade for the foreseeable future. Will he look again at the rules and assist this small number of people now in limbo with no access to help?

[Rishi Sunak]

I am happy to look at the specific situation the hon. Gentleman raises, although I would caution that it is difficult to make changes to these schemes. As many Members have said, the important thing is now getting cash out to people, and the only way to do that is to let these systems run as designed, but I am happy to look at the issue he raised.

Charter for Budget Responsibility

Andrew Gwynne Excerpts

Wednesday 20th July 2016 Commons Chamber

[John McDonnell]

Of course. That is why we support a fiscal charter approach and have produced a realistic one—fiscal charters must be realistic. If the Government set targets and then miss the three that they set themselves, that undermines the credibility of the Government’s economic policy making.

The only hope of rescuing the existing charter is by activating its knockout clause, which the Chancellor referred to in an earlier speech. To remind hon. Members, if growth has been below 1%, is below 1% or is forecast by the OBR to be below 1% on a rolling four-quarter by four-quarter basis, the charter’s targets can be suspended. The problem is that the OBR recently announced that it will not release new projections until later this year, so we remain in the dark about whether the charter targets are still in operation. In the absence of evidence to the contrary, we can only assume that the charter still holds. That means Departments and other public agencies are operating under the old rules; they are still implementing planned spending cuts and still holding back investment decisions. It is essential for the wellbeing of this country that the House repeals the updated charter, because as it stands the charter still requires achieving a surplus, which we all know is impossible to achieve, as I believe the Prime Minister admitted today.

[Andrew Gwynne (Denton and Reddish) (Lab)]

One flaw in the current charter is that it is all about the supply side—reducing welfare costs, reducing debt and eliminating the deficit. What this economy needs at this moment in time is investment. We need investment in infrastructure and in skills, and we need investment in the future.

[John McDonnell]

As always, my hon. Friend is spot on. We are on the same page as almost every organisation that has an interest in the economy in this country: the CBI; the Federation of Small Businesses; the British Chambers of Commerce; and the TUC. All of them are saying exactly as he has said.

--- Later in debate ---

[Mr Gauke]

My hon. Friend makes a very important point. In particular, in the context of corporation tax—after all, it is a tax on profits and on the return on investment—if we lower the rate and increase the return on investment, we would expect, all other things being equal, to see an increase in investment by such companies. In recent years, we have seen increases in business investment and in foreign direct investment. I would argue that we face some immediate challenges as a consequence of the Brexit vote, but I remain convinced—the evidence is very strong—that the steps we have taken on corporation tax will ensure that we are better prepared than we would otherwise have been.

In the context of the challenges we face, whatever one’s views—remain or leave—I think everyone predicted that a vote to leave would result in some short-term turbulence in our economy. As the Prime Minister has rightly said, Brexit means Brexit, but we have to get through this immediate period, in which some of the risks that exist will crystallise. Since the referendum, the value of our currency has dropped by a tenth compared with the dollar, and independent commentators expect to see a general slowing of investment, exports and business decisions. However, if we do all we can to stabilise our economy and set it back on a clear path, I believe we can prosper in the new circumstances.

[Andrew Gwynne]

Are we not missing a trick here? The Chief Secretary will know that bond yields are at an all-time low. Private sector growth is not as strong as it perhaps ought to be. There are really good projects that are ready to be invested in and there are companies that are desperate for investment. Is it not now time for the Government to redouble their efforts to refocus their economic policy on a proper programme of investment in growth?

[Mr Gauke]

I do not think the hon. Gentleman gives the Government the credit we are due for what we are doing on infrastructure. I understand the argument that we need to do more to improve our infrastructure, but let us remember what we have done: more than a quarter of a trillion pounds has been invested in infrastructure since 2010, the average annual investment in the last Parliament was 17% higher than in the preceding one and we have set out plans to invest more than £100 billion in infrastructure by the end of this Parliament.

We are taking measures on infrastructure, but we must put those in context. We also have to ensure that we have sound public finances. The immediate response to the shock of leaving the European Union has to be to work closely with the Bank of England as it carries out its role of providing stability and confidence in our economy. Monetary policy should be the first means of response to an economic shock such as this. We will use the summer period ahead to assess the situation, based on the economic data, and come the autumn we will report back to the House, setting out how we will respond on spending and taxation.

Let me be clear with the House: we continue to believe in fiscal responsibility. This country should not, as it did in the earlier part of this century, make itself vulnerable to economic shocks by letting public spending get out of control. As the Chancellor has made clear—and, indeed, as the previous Chancellor, my right hon. Friend the Member for Tatton (Mr Osborne), made clear—our target to reach a surplus by 2019-20 should not be sought in the economic circumstances we now face.

As hon. Members know, our fiscal plans to reach a surplus always came with a clear caveat: if our economic circumstances were to alter significantly and the independent Office for Budget Responsibility were to forecast less than 1% real growth on a rolling four quarter on four quarter basis, that target would be reviewed. With expert forecasters suggesting that we are highly likely to see that risk to our growth crystallise in the time ahead, we have announced that we will no longer seek to bring the budget into balance by 2019-20. As the Chancellor has said to the House, that does not mean that we can go forward without a clear framework for achieving fiscal balance over an appropriate timeframe. We will address that issue in the autumn statement.

I hear the argument that we should go for growth, but fiscal responsibility does not preclude our achieving economic growth. As has been pointed out in this debate, the UK has grown pretty well as strongly as any other major western economy over the past six years, even though we have undertaken a period of getting the public finances under control. The idea that there is a straightforward tension between economic growth and fiscal responsibility simply is not true. Indeed, it is by pursuing a policy of fiscal stability that we have maintained the confidence not just of the markets, as a consequence of which our gilt rates are lower than they would otherwise be, but of the general public, who know that in the end, if we keep borrowing and keep borrowing and keep borrowing, they will have to pick up the tab.

Oral Answers to Questions

Andrew Gwynne Excerpts

Tuesday 19th July 2016 Commons Chamber

[Mr Hammond]

I can certainly commit to looking at the data, and I can tell my hon. Friend that my approach to taxation is that it is there for a simple purpose: to raise revenue for the Exchequer. I expect the taxes we put in place to achieve that.

[Andrew Gwynne (Denton and Reddish) (Lab)]

T10. In the Queen’s Speech, the Government said that they will continue to support the northern powerhouse. Why, then, of the 15 infrastructure projects with the most public funding is only one in the north?

Article 50: Parliamentary Approval

Andrew Gwynne Excerpts

Monday 11th July 2016 Commons Chamber

[John Penrose]

The current Prime Minister has said that he believes it is very important not just for the UK Government to contribute, but for the devolved Governments—and, wherever possible, other parties on a cross-party basis—to contribute so that we can, whenever possible, speak as a nation with one voice. The hon. Gentleman is right to say the referendum was a pretty divisive affair. It is not just political parties that need to knit together again; society needs to knit together again. I am not sure that I would necessarily share the hon. Gentleman’s enthusiasm for a parliamentary Committee as the solution to achieve that, but I share his conviction that a degree of healing is required, and that all of us on both sides of the House have a duty to ensure that our respective parties and the communities that we represent are able to come together for the good of the country.

[Andrew Gwynne (Denton and Reddish) (Lab)]

More than 60% of my electorate voted to leave the European Union and I very much honour and respect their views. It is clear that the triggering of article 50 is unchartered waters for both this Government and the EU, so would it not make sense for the Government to be in open negotiation with their European counterparts to set out the parameters, process and areas of commonality, and then to come back to the House to announce the likely procedure so that we ensure that we have the very best deal for the people of Denton and Reddish and of the United Kingdom as we take forward the referendum result into reality?

[John Penrose]

The hon. Gentleman is absolutely right that article 50 is uncharted waters. No one has done this before and we are, of necessity, having to address brand-new problems. I will take the rest of his remarks as a submission to the incoming Prime Minister and her negotiating team. He is absolutely right that whatever decisions they make, and whatever process and timetable they lay out, those will have to be founded on one central principle that I hope we can all sign up to: we need to maximise the negotiating position and negotiating strength of this country as a whole to get the best deal possible.

Surplus Target and Corporation Tax

Andrew Gwynne Excerpts

Monday 4th July 2016 Commons Chamber

[Mr Osborne]

I thank my hon. Friend for his remarks. I should point out that I did not identify where the additional runway should be in the south-east of England, although I cannot but note that his constituency is next to Gatwick, so that may have been a loaded question.

As for my hon. Friend’s broader point, he is right to point to the stability of the banking system. Although we remain vigilant, we are not, today, talking about a banking crisis, despite a very significant adjustment in financial markets. That is because of difficult decisions made by this Government and their coalition predecessor to strengthen the capital requirements, so that banks have 10 times as much capital as they had seven or eight years ago, and to strengthen the oversight of our banking system by putting the Bank of England in charge. I think that those decisions have been justified by what has happened in the last 10 days, but that does not mean that we can ease up; of course we remain vigilant.

[Andrew Gwynne (Denton and Reddish) (Lab)]

The Chancellor referred to his fiscal charter, which, of course, has three pillars: the welfare cap, debt reduction in every year of this Parliament, and his target of deficit reduction by 2019-20. We know that he is not going to meet the last one, but can he update the House on the other two pillars?

[Mr Osborne]

The fiscal charter was explicitly designed to ensure that the House of Commons could hold Ministers to account for their fiscal policy, and, indeed, maintain controls on welfare policy. However, it also provided for a specific requirement, in the event of a negative shock, for them to come back to the House of Commons with a new proposal. That, it seems to me, is thinking ahead, and it has been required because of the challenges that we now face in the economy.

The Economy and Work

Andrew Gwynne Excerpts

Thursday 26th May 2016 Commons Chamber

[John McDonnell]

It is interesting to note that the inquiry into Google was started under the Labour Government. It is also interesting that the last assessment that was made, not by us but by the Financial Times—an independent organisation—said that the measures introduced by that Labour Government would reap tax rewards 10 times greater than anything introduced by this Government. After six years, the Chancellor has no one to blame but himself.

The Queen’s Speech furnished us with plenty more unreal promises. The Government say that they

“will support aspiration and promote home ownership”.

Tell that to the hundreds of thousands of our young people who now have no serious chance of ever owning a home of their own. Home ownership has fallen to its lowest level in decades on this Chancellor’s watch. Rough sleeping has risen in London by 30% in the past year, the biggest rise since the current reporting procedures were introduced. Nearly 70,000 families are now living in temporary accommodation, including bed and breakfast accommodation. Nine in 10 under-35s on modest incomes could be frozen out of home ownership by 2025 according to independent analysis.

[Andrew Gwynne (Denton and Reddish) (Lab)]

That phenomenon is not just happening in London; we now have tents in the streets of Manchester. Is that not a shocking indictment of this Government’s housing policy?

[Jake Berry (Rossendale and Darwen) (Con)]

It is a shocking indictment of a Labour council.

--- Later in debate ---

[Mr George Howarth (Knowsley) (Lab)]

I begin by thanking the Chancellor for the £5 million he earmarked in the Budget for Shakespeare North. May I press him a little further and ask him to waive the VAT on the construction costs?

I want to talk today about the link between poverty, economic progress and education. Before doing so, however, I should perhaps say a word about my position on the EU referendum. In the previous referendum, in 1975, I chaired the “Huyton says no” campaign. That merry band of naysayers was a fairly eclectic group consisting of Labour party Young Socialists, the Communist party of Great Britain and two Tories who ran a ballroom dancing academy. Fortunately, the people of Huyton sensibly listened to our local MP at the time, Harold Wilson, and voted to stay in.

The argument that I want to advance today takes its inspiration—fittingly, in the centenary year of his birth—from Harold Wilson’s “white heat of technology” speech. Key to his argument in 1963 was that we needed to adapt to changing economic realities by embracing the challenges presented in science and technology. It also included an element about the importance of education as a pathway out of poverty. My argument is that we now face a similar challenge. How do we compete in a rapidly changing global economy? Do we, as some international corporations would suggest, adopt zero-hours contracts and other insecure forms of employment, or do we incentivise innovation and educate and train our workforce to take advantage of the opportunities that innovation creates? The first option is, in my view, a self-defeating race to the bottom.

However, we have to face up to some uncomfortable truths, one of which is the decline in manufacturing in the UK. In 1972, 32% of the UK’s GDP came from manufacturing. By 1997, that percentage was down to 14.5%, and by 2013 it had dropped further to 10.4%. The economic levers available to the Chancellor and the Government need to be remorselessly focused on creating incentives for innovation, using not only the taxation system but the export guarantee system and everything else available to ensure that the opportunities that exist in the world are brought within the reach of our country.

We also need to talk about education. We have serious problems with education in Knowsley. I do not want to go into too much detail, but we have a serious problem of under-attainment at GCSE level.

[Andrew Gwynne]

I just wonder how many secondary schools in Knowsley are academies.

[Mr Howarth]

That is the point. Out of the six secondary schools in Knowsley, four are already academies, so that is clearly not the solution to the problems we face. My own belief is that we need to start from scratch and completely rebuild the education system. Nothing should be protected from proper scrutiny or from modernisation. The curriculum, the public examination system, educational institutions and even the underlying philosophy behind education need rigorous questioning and frankly need to be radically redesigned to meet the real challenges that we face in the world. If we do not do that, areas such as Knowsley will continue to lag behind. We can, however, make bigger and bolder choices to meet the challenges and harness innovation and education as the twin engines of tackling inequality, deprivation and the random economic effects associated with where people live. Surely there is only one choice, and that choice must be progress.

Oral Answers to Questions

Andrew Gwynne Excerpts

Tuesday 19th April 2016 Commons Chamber

[Mr Osborne]

Of course I respect my hon. Friend’s views. We are having a referendum, and his vote and my vote count equally. I would make the point that our membership of the European Union enhances our national security—that point was also raised by the Secretary-General of NATO last week. Not one of this country’s allies or friends abroad are recommending that we leave the EU.

[Andrew Gwynne (Denton and Reddish) (Lab)]

The number of people sleeping rough on our streets has doubled since 2010 and increased by 30% in the past year alone, which is a shocking indictment of Government policy and society as a whole. Will the Chancellor step in and intervene in the shambles that is the Housing and Planning Bill, and ensure that support for homeless people such as hostels and specialist accommodation is protected?

[Mr Osborne]

In the Budget we provided more than £100 million extra to help with the problem of homelessness and the particular problem of rough sleeping. We have provided money for second-stage accommodation for people as they leave hostels, to ensure that they have secure accommodation to go to. I am always happy to listen to further representations or ideas from the hon. Gentleman or any other Member.