Coronavirus Job Retention Scheme

Andy Carter Excerpts

Thursday 17th September 2020 Commons Chamber

[Andy Carter (Warrington South) (Con)]

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.

[Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)]

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.

[Andy Carter]

The hon. Gentleman talks about an arbitrary date of 31 October for ending the scheme. Does he have in mind a date when he would like it to end, or should it continue for ever?

[Stuart C. McDonald]

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.