Public Health Restrictions: Government Economic Support

Anneliese Dodds Excerpts

Tuesday 13th October 2020 Commons Chamber

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on economic support available to individuals and businesses in areas of the country subject to additional public health restrictions.

[The Chief Secretary to the Treasury (Steve Barclay)]

Yesterday, the Prime Minister and the Chancellor set out further measures to support local authorities through the crisis. On Friday, the Chancellor set out how we will support jobs in every part of the UK through an extension of the job support scheme, and these announcements build on the Chancellor’s September statement on the winter economic plan.

Throughout the pandemic the economic policy focus has been clear—to save jobs. Last month, we set out our plans to help viable businesses that can open through the job support scheme. However, businesses that are required to close due to coronavirus restrictions will also need our help. On Friday, the Chancellor announced the expansion of the job support scheme. Where coronavirus restrictions legally require business premises to close, we will pay up to two thirds of an employee’s salary, up to £2,100 a month, if they cannot work for a week or more. The scheme is nationwide and will run for six months.

In addition, businesses in England required to close will be eligible for a non-repayable cash grant of up to £3,000 a month. This can be used for any business costs. On Friday the Chancellor and I agreed with the First Minister of Wales, the First and Deputy First Ministers of Northern Ireland and the Finance Minister of Scotland on this additional package of support. We have now also guaranteed an extra £1.3 billion of funding to the Scottish, Welsh and Northern Irish Administrations if they decide to do something similar, bringing total guaranteed Barnett funding for this year to £14 billion.

In addition, as announced yesterday, we are providing local authorities in England with around £1 billion to protect vital services, and up to £500 million for local authorities at high or very high risk.

These measures build on the Government’s economic package, one of the most generous in the world, and underline our unwavering commitment to the people of this country.

[Anneliese Dodds]

Just over a month ago the Conservatives passed a motion in the House stating that

“any deviation from this Government’s proposed plan will cause damage to the United Kingdom economy.”

The first deviation came two weeks later when the Chancellor announced his sink-or-swim job support scheme, design faults in which are already leading to substantial and unnecessary job losses. The second deviation came as a belated response to the imposition of localised restrictions announced on television last Friday, with further measures announced yesterday—yet Leicester, for example, has been under localised restrictions for over 100 days. The Chancellor told us to learn our new limits as we go. His handling of the economic crisis is testing patience to its limits, especially the patience of those whose jobs are threatened.

The Government must answer many critical questions, but here are just three: first, why will local areas be provided with support for test, trace and isolate only once they are already in tier 3? This is indefensible. Secondly, there is £1.3 billion-worth of unspent local grants. Why will not the Government allow this money to be used to support local businesses in affected areas? Thirdly, why are workers in closed businesses expected to face poverty as a result of the businesses they work for doing the right thing?

[Steve Barclay]

It is slightly odd that Opposition Front Benchers talk about deviation when their position has deviated as much as it has, not least on the curfew, which they said they would support yet refused to.

On the hon. Lady’s points of substance, the package of support announced by the Chancellor and Prime Minister did support local authorities with an additional £1 billion, as I said in my opening remarks, plus a further £500 million to address trace and trace locally, reflecting the fact that the Government are listening to local leaders and bringing forward responses. We saw that with the additional funding allocated to Merseyside and to Scotland, Wales and Northern Ireland—again reflecting our listening in conversations with the First Ministers of Scotland, Wales and Northern Ireland.

The hon. Lady makes a fair point about underspends that has been made by a number of colleagues. She is right to point to the sheer extent of support that we have offered, including the grants of £10,000 and £25,000. To deliver them at pace, they were allocated on the estimations that we had. As a result, the actual spend that has been required has led to some local authorities having very big underspends and others not. If we were to say that the authorities where the estimates were incorrect should benefit disproportionately, we would be accused of treating some unfairly compared with others. We met the need that was addressed at that time through the awards.

It is right from a fiscal point of view that the underspends are returned because they are surplus to the requirement on which they were allocated. In last week’s urgent question issues were raised by Merseyside Members, and ministerial colleagues engaged, listened and the funding for Merseyside more than doubled per head.

It is a slightly odd line of attack for the Opposition to say that we should not bring back underspends where they met their need but the estimations were inaccurate, yet not use the money to respond to the legitimate needs of areas such as Merseyside and elsewhere that are being moved into tier 3.