Protection of Jobs and Businesses

Anneliese Dodds Excerpts

Wednesday 9th September 2020 Commons Chamber

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

I beg to move,

That this House calls for the Government to abandon its one-size-fits-all withdrawal of the Coronavirus Job Retention and Self-Employment Income Support Schemes, and instead offer targeted income support to businesses and self-employed people in those sectors of the economy that have been hardest hit by the virus and are most in need of continuing assistance, and in those areas of the country which have been placed under local restrictions due to rising rates of infection.

Our country is in the grip of a jobs crisis—a crisis that will intensify if the Conservative Government do not change course. Between April and June this year, the number of people in work fell by the largest amount in over a decade. By July, there were nearly three quarters of a million fewer employees on the payroll than there were just four months earlier. We know that these are extraordinary times. That is why Labour has acted as a constructive Opposition, working with the Government, businesses and trade unions to do all we can to save lives and livelihoods. But it is not enough for the Government now to say simply that this is an unprecedented crisis and that only so much can be done to mitigate the damage. In their amendment to this Opposition day motion, the Conservatives maintain that

“any deviation”—

I repeat, any—

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

Some humility, willingness to listen and flexibility is desperately required here.

Under this Government, the UK has suffered the highest number of excess deaths in Europe. It has experienced both the worst quarterly fall in GDP in Europe and the worst quarterly fall among all G7 nations. The evidence suggests that the number of job vacancies in the UK has fallen further than in any comparable economy and that it will take us many months to get back to pre-crisis levels.

Our people have suffered a double whammy: a health crisis coupled with a jobs crisis, both made worse, I regret to say, by the Government’s unwillingness to listen, learn and accept that they do not always know best. But there is still time to change course. Around 4 million people are still furloughed under the Government’s coronavirus job retention scheme. Another 2.7 million people have so far made claims under the self-employment income support scheme, the second and final phase of which has just opened. Many more people have not yet had any support from this Government at all and have fallen through the gaps between the various schemes.

[Caroline Lucas (Brighton, Pavilion) (Green)]

The hon. Member is making a really powerful point. Does she agree that a huge injustice is being done to the self-employed, many of whom have gone for six months without any support whatsoever? These are our small business owners who take some of their salary and dividends for perfectly good reason. Does she agree that the Government should take their fingers out of their ears and start listening to the self-employed?

[Anneliese Dodds]

I am grateful to the hon. Member for that intervention. I agree with her. We have repeatedly raised that issue with the Government. Repeatedly we have been told that the computer says no—that no response is possible. That does not appear to be the case given the evidence. There would be means to assess people’s previous income. If there is a concern around fraud, ultimately additional deterrents can be added to the system to prevent any such fraud.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

Will my hon. Friend give way on that point?

[Anneliese Dodds]

I will give way, but I am aware that there are many, many speakers for this debate, so I wish not to do that too frequently.

[Mr Dhesi]

I thank my hon. Friend for giving way. Given the importance of the aviation sector, which has been particularly hard hit, the likes of myself have been calling for an extension of the furlough scheme and a sector-specific deal. However, due to Government inaction and procrastination, thousands of individuals within my Slough constituency are now being made redundant, or are on the verge of being made redundant. Does she agree that it is now time for the Government to act before we lose those jobs for good?

[Anneliese Dodds]

I am very grateful to my hon. Friend for raising that point. The jobs crisis that we are talking about is particularly intense in many of those communities impacted by the withdrawal of support for industries critical for the future of our country. Of course, as he mentioned, we were promised a sector-specific deal for aviation. We have not received it. We have not had the Government sitting down with the sector to work through the different scenarios and how we can plan for the future in that case. And we are not seeing the targeted wage support in aviation or, indeed, in other industries critical for the economic future that we desperately need.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

rose—

[Anneliese Dodds]

I will take one final intervention, given that it is from the Government Benches, but then I will make some progress.

[Kevin Hollinrake]

I am grateful. On a sector-based approach, I think that, in an interview with The Guardian, the hon. Member said that such an approach would pose challenges. Has she yet published the solution to those challenges?

[Anneliese Dodds]

I fear that the hon. Member may have missed off the end of the sentence, which is that, while it poses challenges, ultimately that does not mean that those challenges should not be stepped up to—they should be faced up to by the Government. His Government have accepted the need for some targeted support for hospitality and retail with the grants. There is also the Eat Out to Help Out scheme. Yes, there will be boundary issues. We fully accept that, but, ultimately, to govern is to lead. It is to take difficult decisions. The Government trumpet the fact that they worked with industry, with trade unions and with other stakeholders in creating the furlough scheme. They need to do that again to work through these challenges and to create the targeted system of support that is needed.

[Kevin Hollinrake]

Will the hon. Member give way?

[Anneliese Dodds]

I will make some progress if the Member will permit me. He may find the answers to his questions—any further ones—in what I am going on to say.

In addition to those groups of people who I have just mentioned, we know that there are many others who are concerned about their futures working in parts of the UK that are still subject to local restrictions, or that may be subject to additional restrictions in the future. We also have huge numbers of people, as we have just been discussing, who work in sectors that are still not back to business as usual, despite their critical importance for our economic future—whether we are talking about highly skilled manufacturing or the creative industries—yet the Chancellor is ploughing ahead with this one-size-fits-all withdrawal of the income support schemes, pulling the rug from under thousands of businesses and millions of workers all at the same time, irrespective of their situation. He is doing so without any analysis, it appears, of the impact of this withdrawal on unemployment levels and the enormous long-term costs of so many people being driven out of work.

[Jim Shannon (Strangford) (DUP)]

One of the categories that comes under severe pressures, as the shadow Minister and others in this House will know, is local councils. Their staff have been furloughed and they are having to take them back but their budgets are squeezed. Does she support my plea that additional help must be given to those councils to protect and retain jobs, because people are operating as a skeleton staff for almost a standard level of service provision, and it is just not possible to deliver that?

[Anneliese Dodds]

I am grateful to the hon. Member for raising that point. The Government promised local authorities that they would meet their calls to back-fill not just the spending that they have incurred during this period but the income that was lost. What do we have instead? We have a resiling from that promise. That is problematic because of the huge impact it will have on employment in different areas—local authority employment can be a critical part of many economies—but it is also an enormous issue for the economic development in those areas, where ultimately the lack of local leadership will be a huge problem. The Government need to hold to their promise in that regard.

[Anthony Browne (South Cambridgeshire) (Con)]

The shadow Chancellor says that she wants to extend the furlough scheme, but the key question is: how long for? The Chancellor said when he announced it that it would end in October. If it is October, the shadow Chancellor says it should be November; if it is November, then she says December. If she wants a sector-specific scheme, when does it end—at the end of the crisis, as some of her colleagues have said? Is that when the virus is eradicated? What is the solution?

--- Later in debate ---

[Anneliese Dodds]

With all due respect to the hon. Member, he may have missed what I said. We believe that the Government need to sit down and talk to exactly the stakeholders they trumpeted so much about working with when they created the furlough scheme, so that it can provide the system of support that is necessary to protect jobs and protect our economic capacity. As I have said time and again, we do not believe that a continuation of the furlough scheme precisely as it stands now is what is required. We need a targeted wage support scheme, which is exactly the approach being taken by huge numbers of other countries but which this Government are turning their face against.

[Several hon. Members rose—]

[Anneliese Dodds]

I will make some progress because I am aware that so many Members want to speak on this critical subject.

For some businesses and staff well on their way back to normal, it is absolutely right and proper that wage support ends. As I said, we are not arguing for a continuation of the furlough scheme exactly as it stands across every sector of the economy, but for others, many of which are sectors crucial to our country’s economic future, additional targeted support could be the difference between survival and going under.

The Chancellor says that he wants to pick winners, but the necessary public health measures that his Government have enacted have created losers. Across the economy as a whole, about one in 10 workers are still furloughed. For the transport sector, it is closer to one in five. For arts and entertainment, it is one in two. Yet he is stubbornly insisting on treating every part of the economy as if it is in exactly the same situation, and in doing so putting the recovery and millions of people’s livelihoods at risk. A targeted extension of Government wage support to enable short-hours working does not mean extending support for everyone forever; it means targeting it at where it is needed most.

[Several hon. Members rose—]

[Anneliese Dodds]

With respect, I will not give way as I have done so many times and I am aware of the time pressure with many Members wishing to participate in this debate.

We need support that is targeted to the sectors of our economy that have been hardest hit by the virus but are critical to our country’s economic future; to areas of the country that are subject to local restrictions because of this Government’s failure to get a proper grip on the health crisis; and to businesses that would be viable in ordinary times, employing people doing jobs they love, but just need a little more help to get through this crisis. These are people like those I spoke to over the summer in north Wales working in advanced manufacturing. They do not want a permanent handout from Government, just more support while the economy is still in dire straits to help them get back on their feet. Without that support now, jobs like theirs will take years to come back. Jobs in the supply chain linked to their plant will vanish too, and with them the economic prospects for their communities.

I called on the Chancellor to be more flexible when he gave his summer economic statement in this House two months ago. What do we get instead? A panicked handout of £1,000 bonuses to any business, anywhere, that brought back a furloughed employee. That is too much public money to dole out to a business that was going to bring back workers anyway. The Chancellor allocated £9.4 billion for that bonus scheme. Let us just imagine how much more effectively that money could be spent if only he had thought flexibly about how to respond to the crisis. Let us imagine how many of those at-risk jobs could be saved. The economic reality simply does not support the approach the Chancellor is taking, and he should have the courage to recognise that and change course.

The Chancellor may not wish to take our word for it that a targeted, flexible form of wage support is the right way to go, but he could at least be persuaded by the examples of other countries, such as Germany and France, which have each extended their schemes to last for two years; the Netherlands, which has extended its scheme for a further nine months; or Australia and Ireland, both of which have committed to support furloughed workers until March next year. Of course, in our own United Kingdom the devolved Governments have called for targeted wage support to be continued, not snatched away at the same pace across all sectors of our economy.

If that is not good enough for the Chancellor, he could listen to trade unions or think-tanks—after all, he trumpeted working with trade unions to create the furlough scheme in the first place. He could listen to the TUC, which has proposed a job retention and upskilling scheme; the Institute for Public Policy Research, which has advocated a coronavirus work sharing scheme; or the Joseph Rowntree Foundation, which has suggested a covid-19 job support scheme.

If that is not compelling enough, perhaps the Chancellor could heed the voice of business. The British Chambers of Commerce has said that

“businesses across the UK are going to need further support to weather uncertainty over the coming months.”

Make UK has called for

“an extension of the Job Retention Scheme to those sectors which are not just our most important but who have been hit hardest.”

[Several hon. Members rose—]

[Anneliese Dodds]

If I may, I will finish this point and then take one more intervention; I do not want to frustrate all those colleagues who wish to speak in this debate. The Federation of Small Businesses has said that

“it is time for the Government to bring forward a rescue package for those who have been left out.”

The Institute of Directors has said that the Chancellor’s bonus scheme would

“do little to prevent job losses”—

and that—

“some form of an extension to the furlough scheme should remain on the table.”

The CBI has been clear:

“It’s too soon to pull business support away at the end of October.”

The Chancellor likes to think that he has the ear of business, but it is clear that he is just not listening when business tells him to change course.

[Kevin Hollinrake]

The shadow Chancellor makes some fair points, particularly about working constructively with government. On that basis, should she not constructively set out her solution to these problems, rather than simply saying that the Government should solve them? Obviously, she has ideas of how to solve them, so why does she not publish solutions?

[Anneliese Dodds]

I would love it, frankly, if the Chancellor and his team wished to open talks with the Opposition, with business, with trade unions, looking at the different options that I have just set out. I know the hon. Gentleman is one who does look at detail. I have just set out a variety of different models that have been set out by business, trade unions and think tanks. We want to work with government on this. If he is signalling that he wishes that discussion to happen, I hope that his Front-Bench colleagues will take that invitation up as well. It is not just he who wishes to have that discussion with his Front-Bench team. I note that a huge number of Conservative Members want to participate in this debate, and I am keen to hear their thoughts on it. Some of their colleagues have already pronounced on it. The right hon. Member for Preseli Pembrokeshire (Stephen Crabb) has said that there should be

“targeted extensions to the furlough scheme beyond October.”

The hon. Member for Harborough (Neil O’Brien) has said that he can see the case for it, too. How many more Conservative Members are worried, privately, about the impact on their constituents of this Chancellor pushing stubbornly ahead with his plan to take support away from everyone, all at once?

[Rachael Maskell (York Central) (Lab/Co-op)]

I recall the Chancellor saying that he would do “whatever it takes”. The hospitality and tourism sector, which covers a quarter of the jobs in my constituency, is now entering its third winter in a row, as the sector puts it. Should not support be targeted at that sector, too?

[Anneliese Dodds]

My hon. Friend has been such a champion for those jobs in York and, indeed, for jobs throughout the country. I say to her exactly what businesses in tourism right across the UK have been saying to me when I have spoken to them: they do not want a handout; they just want a fair chance. If they end up having to close their businesses—if they end up having to lay off staff—it will take a very long time to build those businesses back up again. The Government should be listening to them.

Indeed, the Government should be listening, as I said, to the Government Members who are concerned about the withdrawal of the scheme. More than half a million at-risk jobs belong to people living in the constituencies of the Chancellor’s newest colleagues on the Government Benches—over 18,000 in Burton, more than 20,000 in Watford and in excess of 21,000 in Milton Keynes North—but so far, the Chancellor is not listening. Of course, he has not come to the Chamber today to hear what Members have to say about the very real fears of their constituents. We have not heard him speak in the House since the summer recess, despite the fact that our country is in the grip of a jobs crisis.

The Labour party, trade unions, think-tanks, business and even the Chancellor’s own Back Benchers can all see that what the Government are doing will make our jobs crisis worse and lead to untold misery for millions of people, as well as reducing our economic capacity for the future. We are all sounding the alarm; the question is: what will it take for this Government to listen?

Economic Update

Anneliese Dodds Excerpts

Wednesday 8th July 2020 Commons Chamber

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

Our country has been through a great deal over these past few months. Hundreds of thousands have wrestled with this terrible disease. For many months, people have had to go without being able to embrace their loved ones or even to say goodbye. Tens of thousands have died. Our NHS, social care and other workers had made extraordinary sacrifices. We owe them so much.

The Government have had to take big decisions, too—we acknowledge that—but today should have been the day when our Government chose to build a bridge between what has been done so far and what needs to be done to get our economy moving again. It should have been the day when the millions of British people worried about their jobs and future prospects had a load taken off their shoulders. It should have been the day when we got the UK economy firing again. Today, Britain should have had a back-to-work Budget; but instead we got this summer statement, with many of the big decisions put off until later, as those on the Government Benches know full well.

Labour is a constructive Opposition during this time of crisis. We will not criticise for criticism’s sake. But when the Government fall short we will speak up, and the blunt truth is that we have one of the highest death rates in the world and among the deepest economic damage in the industrialised world from coronavirus. So the very first thing the Chancellor must do is prevent additional economic damage due to the slow public health response of his Government.

As we have seen throughout this crisis, the failure to match soaring rhetoric with meaningful action has consequences for people across our country. Despite all their talk, the Government have failed to create a fully functioning test, track and isolate system. That has damaged public confidence and, in turn, harmed consumer demand. Despite all their talk, the Government have failed to produce a clear system for local lockdowns. The lack of timely information sharing has led, as we all know, to the imposition of an additional wide-scale lockdown in Leicester.

The Government’s contracts with outsourcing firms amount to almost £3 billion, but we still have not got test, track and isolate working properly in the UK, as it is in many other countries, and the Government still have not got a grip on the low value and limited scope of sick pay, risking people’s ability to self-isolate. Fear is corrosive. Fear is hurting our economy. The Government have got to get this right.

Of course, we welcome the Government’s announcement today of targeted VAT cuts on hospitality and tourism and of vouchers to be used in restaurants. Local businesses desperately need that support, and so many low and middle-income people in particular really need help right now. That is why we have repeatedly called for social security to better meet their needs and prevent people risking losing their homes. If delivered properly, these measures should help.

But the Chancellor himself said, when interviewed on “The Andrew Marr Show”, that the best the Government can do to boost demand is to give consumers and workers the confidence and psychological security that they can go out to work, to shop and to socialise in safety. So please, Chancellor, work with your colleagues so our public health response catches up with that operating in other countries. The Prime Minister asked, what have I been doing about that? My party has been repeatedly suggesting solutions to the public health problems facing our country, and we need to adopt them in the UK before this crisis becomes even more severe.

Now the Government must act not just to deal with unemployment as a symptom, but also with its cause. Research reported this week in the “Telegraph” indicates that British workers have already been the biggest casualty in the global jobs cuts. It showed that while jobs markets in many other countries have already fully recovered, in Britain it could take comparatively much, much longer for vacancy levels to return to normal. The levels of unemployment that this country saw in the past were not just an economic waste; they ruined lives. We are seeing the same impacts again—the same devastated high streets and communities robbed of their pride and purpose.

Of course the re-employment bonus announced by the Chancellor is necessary, not least because his Government refused to put conditions on the use of those funds related to employment. But, first, how can he ensure that that money will not just go to those employers who were already planning to bring people back into work and, secondly, what will he do for those firms that lack the cash flow to be able to operate even with that bonus? Related to that, the Chancellor still needs to abandon his one-size-fits-all approach to withdrawing the job retention and self-employed schemes. No one is saying that those schemes should stay as they are indefinitely; the Opposition have never said that, but we have said that the money spent on the job retention scheme must not serve merely to postpone unemployment. The scheme must live up to its name, supporting employment in industries that are viable in the long term. We also need a strategy for the scheme to become more flexible so that it can support those businesses forced to close again because of additional localised lockdowns. There is still time to avoid additional floods of redundancy notices. It is the Government’s duty to help Britain through this and stop employment reaching mass levels again.

We need action to ensure the support needed for key sectors of our economy—for our small and medium-sized enterprises and our manufacturers. While we of course welcome the long-overdue arts and culture package, we still have not heard the Government’s plans for other sectors. Many of us expected to hear them today, but we have not. The Project Birch process has been slow, tortuous and opaque. Large parts of industrial Britain need help to get through this—to keep their employees in jobs and keep their suppliers in jobs. Meanwhile, it appears that there will be no solutions for SMEs who cannot take on additional debt until the autumn. This risks many SMEs going to the wall.

Until now, the Chancellor has described a targeted, sectoral approach as the Treasury “picking winners”, but the necessary public health measures have created losers. As the Chancellor himself said just now, the Government required many businesses to shut down to prevent the spread of this disease. Supporting businesses that are viable in the long run but currently starved of cash flow is not a matter of “picking winners”: it is about protecting our country’s economic capacity for the future. Failure to do so—to make the job retention and self-employed schemes more targeted and focused and to support viable businesses—is driving up unemployment in this country. The claimant count is on course to top 3 million people in June—the highest number since the previous record in 1986. This is the Chancellor’s record, and one that cannot and must not be worsened.

Where unemployment arises as a symptom of economic damage, more must be done to help. Labour repeatedly called for the Government to match the ambitions of Labour’s future jobs fund and Welsh Labour’s Jobs Growth Wales programme, and finally the Government have come forward with a scheme apparently modelled on them—the kick-start scheme. The Conservatives cancelled the future jobs fund, of course, and it has taken almost 10 years for them to catch up. As with their belated adoption of our call for “jobs, jobs, jobs”, perhaps this gives a new meaning to the phrase “Project Speed”. We now need to make sure that the kick-start scheme provides genuinely additional opportunities for young unemployed people. The Government must also recognise the specific challenges faced by older jobseekers, many of whom are becoming unemployed for the first time, and those based in especially hard-hit places. Reimposing sanctions now is punitive and counter- productive when jobseekers need support.

We must be ambitious for the future of our country’s economy. Our ambition should not just be to build our way out of this but to do so in a greener and cleaner way. For this, we need more than the reheated announcements by the Prime Minister last week. Of course the investment announced was welcome, not least because much of it was already committed to by the Government. However, core elements are missing. For example, £50 million to support retrofitting in social homes is just a seventh of what the Conservatives said they would be spending every year. The muddled confusions over stamp duty over the past 48 hours reflect a broader lack of strategy when it comes to house building, particularly for genuinely affordable and social homes. Overall, the UK’s green investment package barely touches the sides of other countries’ commitments. Even with what was announced today, it only equates to just over the value of Germany’s investment in one green technology alone—hydrogen. The Committee on Climate Change has indicated how far behind the UK is in the race to decarbonise. Failure to heed its recommendations is not only damaging to our planet, but it also cuts us out of leading the development of the key technologies of the future. The Conservatives are still refusing to impose conditions on investment to ensure that it contributes to the goal of net zero and that it supports local jobs, uses local firms, leads to sustainable skilled employment in local areas and prevents the use of tax havens and other forms of asset stripping.

If the Chancellor really wants to “build back better”, he must prevent a rerun of the past. From 2010 onwards, we have seen how families’ resilience has been eroded. We entered this crisis with a quarter of families lacking even £100 in savings. In a typical classroom of 30, nine children are growing up in poverty, and our economy is the most regionally unequal in Europe. Our local authorities continue to be cut to the bone, with many standing on the brink of bankruptcy as we speak, and rather than the promise that our NHS and social care services would get whatever they needed this winter—to weather a potential second wave—those words were conspicuously absent from the Chancellor’s speech just now.

Politicians in this House have gone out on our doorsteps to clap key workers, while the lowest paid have struggled to keep a roof over their heads. We must have a new settlement for the future: an end to poverty pay for our social care workers and those who clean our hospitals and deliver our groceries. We want a recognition of the value of the work of those who have been taken for granted for far too long.

There were some initial press reports that the Government were due to announce generalised tax increases or cuts to services this autumn, which were contradicted by the Prime Minister, who rejected whatever had apparently been briefed out by the Treasury—that has happened quite a few times. I say to the Government that, if they do increase taxes during the recovery and cut back on the public services that we all rely on, it will damage demand and inhibit our recovery. Labour is not calling for tax rises. We are calling for growth.

The Tory manifesto committed to no rises in income tax, national insurance or VAT, and therefore it is for the Conservatives to set out how any additional spending will be paid for. It is the Chancellor’s job to ensure that the economy bounces back from this crisis, so that there is money in the coffers to protect the public finances.

Last week, the Chancellor’s colleague, the Prime Minister, tried to claim the mantle of FDR—as we all know. Perhaps now we know why he went for Roosevelt. It is because this week the Prime Minister blamed carers for the failings in the system that his Government had underfunded for the past decades. Now we know why he went for Roosevelt. It is because the last thing that his Government would have wanted was the sign on the desk of Harry Truman, the successor to Roosevelt, which said, “The buck stops here.” If this Government had a sign, it would probably say, “The buck stops anywhere but here”. But they cannot escape their responsibilities: to govern is to choose. It is to choose to finally sort out test, track and isolate, to prevent unnecessary additional unemployment and to build the green jobs of the future. This is a moment when our country needs its Government to help Britain through.

[Rishi Sunak]

I thank the hon. Lady for that contribution. Throughout this crisis, she and I have spoken and, where possible, I have tried to find common ground for our measures with as broad a coalition as possible, including with members of the Opposition. I do feel that it is necessary, however, to reiterate just a few points. She talked about vulnerable people, but, as I said, the analysis published today shows that our interventions have helped the poorest in our society the most. Those are the values of this Conservative Government. We will make sure that no one is left behind during this time of national crisis, and we will ensure that those who are most vulnerable get the support and protection that they deserve

The hon. Lady also talked about jobs and the difference in different countries’ reactions to the labour market. She is right: our economy is more reliant on consumption than other economies. It is also more reliant on social consumption than other economies. That is why the acute difficulty of social distancing and the shutdowns have affected our economy more than others. That is why, to help protect those 2 million jobs in the 150,000 businesses in those sectors and the people who are, on average, lower paid—women, black and minority ethnic communities, and rural and coastal communities—we have put in place what I believe to be bold and decisive measures to help protect employment in those sectors.

The hon. Lady talked about conditionality on funds that we provided. Here, she has to choose. It cannot be that you can develop significant interventions to provide liquidity and cash support to businesses at scale and speed, while at the same time having an incredibly targeted approach, imposing conditions on individual businesses. You have to choose one or the other. We unashamedly chose the former. The speed of what was happening to our economy and the scale of what was happening demanded an approach that required us to take a broad-brush approach, and that was the way we could get help to as many people as possible as quickly as possible. But where individual businesses come to the taxpayer and require bespoke support, it is right that we impose conditions on those businesses. I have been very clear that that is what I would do and, indeed, that is what we have done. Without going into the details, as that would be inappropriate, such interventions will come with conditions: conditions on executive pay, protecting employment, climate change obligations, how supply chains and small businesses are treated, and obligations around tax. Those are all commitments and conditions that the taxpayer would expect us to make and that is what we have done in the one instance where the support has been provided thus far. It is what we will do for any future support.

The hon. Lady talked about a green recovery. This Government are proud of their record on our environment. She talks about Germany and other countries. When I stood here in March, we outlined one of the most ambitious and far-reaching investment programmes for our environment and tackling net zero from any Government this country has ever seen. Carbon capture and storage, the nature for climate fund, investing to further the support for electric vehicles, new charging stations, tackling air quality, taxes on polluters—those are all measures we have already taken. I am glad that other countries are catching up. We have decarbonised faster than almost every other European country. It is a record that those of us on the Government Benches are proud of.

The measures we have announced today represent some of the most far-reaching measures any country has taken to tackle energy efficiency. They will provide thousands of pounds of grants for homeowners up and down the country to create local jobs and ensure we can reduce carbon emissions from our housing stock, which today account for almost a fifth of all our emissions. The Committee on Climate Change has said we must address that. In our manifesto, we committed to addressing it. Rather than waiting to get started and rather than the five-year plan outlined in our manifesto, we are getting on with it today.

The hon. Lady spoke about furlough. Here again, I make no apology for the fact that we must and should wind down this scheme. I am glad that today the OECD made it clear that it also believes wage support schemes must be carefully wound down in order to get people back to work, protect jobs and return to growth. I see the hon. Lady has moved around on this issue. She said at the end of May that a targeted approach would “pose challenges” and force “hard choices”. I have not heard from the hon. Lady how she would solve those challenges and hard choices, but we remain committed to protecting people in their jobs. We understand that businesses that have had to furlough employees have been through a difficult time, which is why today we outlined a £9 billion policy—the job retention bonus—to support workers and to support businesses who bring those furloughed workers back.

Lastly, the hon. Lady talked about the future jobs fund. I am guided by the evidence. Parts of that scheme did work well and I am not dogmatic—I will do what works—but there are major differences to the kick-starter scheme. The kick-starter scheme will be bigger. It will help more young people. It will be broader, involving the private sector. It will be better value for the taxpayer, ensuring less money is spent on administration fees and more money is in the pockets of young people working.

We have questions from the hon. Lady, We have opinions from the hon. Lady, and last week, we even had tests from the hon. Lady. The one thing we do not have from her is a plan. I closed my statement by saying that this Government were making an unambiguous choice to make this moment meaningful for our country. Now, Labour Members must choose. Do they believe, as we do, that Britain has the energy and power to bounce back? Do they have confidence, as we do, in our incredible public services? Do they believe, as we do, in the enterprising spirit of British business? If they do, then they should do what is right and back our plan for jobs.

Oral Answers to Questions

Anneliese Dodds Excerpts

Tuesday 7th July 2020 Commons Chamber

[Rishi Sunak]

My hon. Friend, as always, is a champion for the industry, and he knows how important it is to the UK economy. I can tell him that, at the Budget, we committed to a consultation on aviation tax reform. We remain committed to that, and will bring forward the timing in due course.

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

The Chancellor stated earlier that the job retention scheme is being wound down from the autumn. It is actually being wound down from the start of next month across all sectors at the same time, and we are already seeing the impact of that in very substantial redundancies. The Resolution Foundation called this week for a targeted continuation of the scheme for the hardest hit industries and those areas affected by additional lockdowns. The Chancellor has said he does not want to pick winners, but this health crisis has involved Governments designating losers, quite rightly, for public health reasons, so why is he persisting with the one-size-fits-all removal of the job retention scheme, when this will inevitably lead to additional redundancies?

[Rishi Sunak]

This is not about picking winners or losers. This is about protecting people’s health, and where it is incumbent on the Government to step in and make sure that we can protect people’s health through targeted intervention, that will remain the right thing to do. With regard to economic support, my right hon. Friend the Health Secretary has made it clear that support has been provided to the local council when this has been the place to do so. With regard to the furlough scheme, we are of the belief, rightly, that this is a universal scheme, it is generous, it has been extended to October and it is winding down in a gradual and temperate manner.

[Anneliese Dodds]

I have to say that it is disappointing to hear that the Chancellor is not budging from this position. As mentioned, it is already leading to additional waves of redundancies—avoidable redundancies in many cases. Labour has repeatedly called on the Government to match the ambitions of Labour’s previous future jobs fund in developing support for unemployed young people, so may I ask the Chancellor why, put together, the traineeship fund and green jobs challenge fund—just announced—amount to less than a quarter of the size of the future jobs fund? That hardly reflects a focus on jobs, jobs, jobs.

[Rishi Sunak]

I am not quite sure that is right. In reality, the future jobs fund was around £1 billion. We announced yesterday the £2 billion green home grant to provide home efficiency upgrades for hundreds of thousands of homes and create tens of thousands of jobs up and down the country. Not only will households save money on their electricity bills and save carbon, but we will create good local jobs in the process.

Economic Outlook and Furlough Scheme Changes

Anneliese Dodds Excerpts

Tuesday 16th June 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 the economic outlook for the UK and the Government’s strategy to protect jobs and the economy in light of upcoming changes to the furlough scheme.

[The Financial Secretary to the Treasury (Jesse Norman)]

Before I start, may I join with all the words that have been said in praise of Jo Cox during the proceedings so far? I know that many more such words will be said today. One thing that colleagues may not know, amid all the many things that they have been told about her, is that she was very fond of visiting Symonds Yat in my constituency in Herefordshire. I look forward to the day when many other people can do that, following lockdown.

From the onset of this pandemic, the Government’s top priority has been to protect the NHS and to save lives, but we have also made it clear that we will do whatever is needed to support people, jobs and businesses through the present period of disruption, and that is what we have done. On Friday, the Office for National Statistics published its first estimate of April GDP and showed the economy contracting sharply by a record 20.4% on the month. It is clear that restrictions introduced during the lockdown, while necessary, have had a severe impact on output.

However, it is important to note that the OECD, the Office for Budget Responsibility and other external forecasters have all highlighted that the cost to the economy would have been significantly higher were it not for the swift and decisive action that the Government have taken. Measures such as the coronavirus job retention scheme—the CJRS—which has protected almost 9 million jobs and more than 1 million businesses, have helped to limit the adverse impact of the crisis. It is also important to note that the OECD forecast the UK to have the strongest recovery of all the large countries that it looked at, with an unemployment rate projected to be lower than that in France and Italy by the end of 2021.

As we are reopening the economy, the Government are supporting putting people back into work. Last month, my right hon. Friend the Chancellor announced that the CJRS would be extended for four months, until the end of October. From July to October, employers currently using the scheme will be able to bring furloughed employees back part-time. That will ensure that the CJRS will continue to support all firms so that no employer faces a cliff edge.

This remains a very uncertain and worrying time for businesses and employees alike. The Government have set out separately the five principles that must be satisfied before we make further changes to the lockdown rules, which we based on advice received from Scientific Advisory Group for Emergencies. However, I can assure the House that the thoughts, energies and resources of the Government are focused increasingly on planning for the recovery. We will develop new measures to grow our economy, to back businesses and to boost skills. I am confident that the United Kingdom can continue to thrive in a post-covid world.

--- Later in debate ---

[Anneliese Dodds]

The OECD’s global outlook suggested that the reduction in GDP in the UK due to the current hit of coronavirus will have been the largest out of all developed economies. The enormity of the economic impact appears confirmed by the claimant count and other unemployment data out today. It seems that the slow and confused health response is being followed by a slow and confused response to saving jobs, despite the huge long-term costs of unemployment. Labour has called for an exit strategy, but what we seem to have is an exit without a strategy, including on jobs.

Will the Treasury change its one-size-fits-all approach to the furlough and self-employed schemes, which risks additional waves of unemployment? Will it act to encourage young people to stay in education and training, and out of unemployment? Will it build on previous schemes such as the future jobs fund to support the young unemployed, and provide tailored help for other hard-hit groups such as older workers?

Although more support for apprenticeships is desperately needed, it will not be enough. Will the Treasury act now to create the extra support that cannot currently be delivered by Department for Work and Pensions staff, who are occupied with huge numbers of extra claims? Will the Government catch up with other countries that have already announced their stimulus packages, given that many employers are deciding now on whether to retain staff? Will they apply conditions to Government investment to include requirements to promote upskilling and re-employment? Above all, rather than a limited Budget statement in July, will the Government set out the back-to-work Budget that we need, with a focus on jobs, jobs, jobs?

[Jesse Norman]

I thank the hon. Lady for her questions and comments. Of course, the issues that she highlights are of great importance and receive an enormous amount of attention in the Government and in the Treasury, but I am a little surprised by some of the things that she said. I remind her that the OECD report, in addition to forecasting the strongest recovery, also highlighted the quick and comprehensive response that the Government put in place to deal with covid. It also noted the relative robustness of the UK’s public finances relative to those of other countries. Colleagues are entitled to decide whether they accept what the OECD says, but they cannot discount the bits they do not like and accept the bits that they do.

The hon. Lady refers to the Government’s response as “slow and confused”, but I find that very odd. She said to the CBI in April that “this scheme was about preventing mass unemployment”, and “undoubtedly it has prevented a worse situation, there’s no question about that”. She congratulated the Government, business and trade unions, and said that we saw with the job retention scheme “an excellent example of tripartite working”. I think she is right about that, but I do not think she can take the line she takes now and disavow those other things that she said, when Labour was being a bit more bipartisan than it is at the moment, in praise of the Government’s schemes.

Finally, the hon. Lady talks about the Government adopting a one-size-fits-all approach, but I would remind her of what she said in The Guardian on 20 May 2020:

“A more differentiated approach”—

that is, not a one-size-fits-all approach—

“would, admittedly, pose challenges for the government. Hard choices would need to be made, including how to deal with difficult boundary issues”.

She is right. It is also true that the Government have adopted a more differentiated approach than she gives us credit for, as witness all the work we have done with the hospitality and leisure industries.

So I am a little confused, but I do think it is important to focus on the positive achievements of the job retention scheme and the self-employment scheme, which, as the hon. Lady rightly notes, have prevented a much worse alternative and have been brought into place with great speed and ability by Her Majesty’s Revenue and Customs.

Covid-19: Economic Package

Anneliese Dodds Excerpts

Tuesday 12th May 2020 Commons Chamber

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

To ask the Chancellor of the Exchequer if he will make a statement on the Government’s economic package in response to the covid-19 outbreak.

[The Chancellor of the Exchequer (Rishi Sunak)]

Thank you, Mr Speaker, for your warm wishes.

This Government’s plan is one of the most comprehensive anywhere in the world. We have provided billions of pounds of cash grants, tax cuts and loans for over 1 million businesses, tens of billions of pounds of deferred taxes, income protection for millions of the self-employed, and a strengthened safety net to protect millions of our most vulnerable people. These schemes speak to my and this Conservative Government’s values. We believe in the dignity of work, and we are doing everything we can to protect people currently unable to work.

Yesterday my right hon. Friend the Prime Minister set out our plan for the next phase of the public health response, and today I can confirm the next stage of our job retention scheme. This scheme has been a world-leading economic intervention, supporting livelihoods and protecting futures. Seven and a half million jobs have been furloughed—jobs we could have lost if we had not acted—and nearly 1 million businesses supported who could have closed shop for good.

As we reopen the economy, we will need to support people back to work. We will do so in a measured way. I can announce today that the job retention scheme will be extended for four months, until the end of October. By that point, we will have provided eight months of support to British people and businesses. Until the end of July, there will be no changes whatsoever, from August to October the scheme will continue for all sectors and regions of the UK, but with greater flexibility to support the transition back to work. Employers currently using the scheme will be able to bring furloughed employees back part time. We will ask employers to start sharing with the Government the cost of paying people’s salaries.

Full details will follow by the end of May, but I want to assure people today of one thing that will not change: workers will, through the combined efforts of the Government and employers, continue to receive the same level of overall support as they do now, at 80% of their current salary, up to £2,500 a month.

I am extending the scheme because I will not give up on the people who rely on it. Our message today is simple. We stood behind Britain’s workers and businesses as we came into this crisis and we will stand behind them as we come through the other side.

[Mr Speaker]

I now call Anneliese Dodds, who is speaking virtually. I ask her to speak for no more than two minutes.

[Anneliese Dodds]

Thank you, Mr Speaker, for granting this urgent question. I would also like to wish the Chancellor many happy returns.

As a constructive Opposition, we want to work with the Government to ensure that people’s jobs and incomes are protected and the furlough scheme is a critical element of that. Many of the more than 6 million people who are currently furloughed were taken aback by comments made in the media by Government spokespeople suggesting that, for example, people needed to be weaned off an addiction to the scheme. There were many intimations that changes might have been announced to that scheme by the Chancellor, potentially in the media, without the opportunity for proper scrutiny.

I have only heard about these changes in the last few seconds. We will look at them very carefully, but there are some critical principles that the Chancellor surely must follow as he redesigns the scheme.

First, we must acknowledge that people did not want to be furloughed. It occurred through no choice of their own and through following the Government’s advice about the closure of sectors. It is critically important that they are not penalised for that choice.

I welcome the flexibility mentioned. We have asked for that repeatedly; it applies in many other countries. It has been a long time coming, but I welcome the fact that it is occurring now.

That flexibility includes an employer contribution, so the Chancellor needs to provide more information about that employer contribution now. He also surely needs to provide more information about alternatives to the scheme. Other countries have job creation, training schemes and redeployment schemes. We do not have those yet. Will the Chancellor work with me, trade unions, businesses, local authorities and further and higher education institutions to create the support that is so desperately needed?

[Rishi Sunak]

I thank the shadow Chancellor for her warm wishes and for the constructive support for today’s announcement. I will address two specific points that she raised. First, the word addiction is not one that I have ever used and it is not one that I agree with. Nobody who is on the furlough scheme wants to be on the scheme. People up and down the country believe in the dignity of their work, of going to work and providing for their families. It is not their fault that their business has been asked to close. It is not their fault that they have been asked to stay at home. That is why I established the scheme to support those people and their livelihoods at this critical time. I wholeheartedly agree with the shadow Chancellor in that regard.

On the next steps, I am pleased to tell her that I have already been talking to the TUC and, indeed, the CBI about the future; helping those people to get back into work who, unfortunately, may lose their jobs through this period. That issue weighs heavily on my mind. Every person who loses their job through this difficult period is a person the Government are determined to stand behind, whether that is with new skills, new training or indeed through supporting businesses to create new jobs. We are determined to make sure that that happens. I look forward to continuing my conversations with Opposition Members and with the trade unions, the CBI and other business groups as we look forward to a brighter future. As we get through this crisis, people can come back to work and we can create the jobs and opportunities, and a brighter future for tomorrow.

The Economy

Anneliese Dodds Excerpts

Monday 27th April 2020 Commons Chamber

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

I am grateful to the Chancellor for advance sight of his statement, and to all the Treasury civil servants, and those in HMRC and the Department for Work and Pensions, who have been working incredibly hard to get these schemes running. I fully appreciate that the Chancellor’s job has not been an easy one, but it is our job as a constructive Opposition to point to problems that we are hearing from the frontline, and to indicate solutions. It appears that at least some of those problems are more acute in our country than in many others.

The Purchasing Managers’ Index figures that came out last week indicated a sharp fall in business confidence. Sadly, that was not a surprise. It has been clear for some time that the economic slowdown we are currently experiencing is sharp and deep. It was, however, unsettling that those figures suggested that business confidence has taken a stronger hit in the UK than across the eurozone. I have heard from small business owners who put their life and soul into their firms, but have less than two weeks of cashflow left, and they are devastated. We all need to work together to get the different support schemes working for our country. We must fix this.

I am well aware that many of the conditions for shifting out of lockdown are not within the Chancellor’s grasp. However, his Government need to be open about blocks on progress and how they will remove them. That applies to the test, track and trace regime, which must be in place before key sectors can open again. It also applies to the creation of a national tripartite system to ensure that workers and employers have confidence that they can return to work safely when the right time comes.





The Chancellor is directly responsible for the economic package, and he knows that we supported him in creating the furlough scheme; indeed, we called for it. But the evidence is that some other key elements of the economic package are failing, so, in a constructive spirit, I want to ask the Chancellor whether he would countenance solutions in three areas—first, on CBILS. It is a relief to hear from the Chancellor that he has listened to calls from the Opposition, business and others that we need a full guarantee for at least some loans—he has stated those of up to £50,000—but we need to be clear that the UK has an enormous mountain to climb. Switzerland has a population of under 9 million, yet it approved four times as many loans in its first week as the UK has done in a month. We are running out of time, so how will the Chancellor ensure that the bounce-back loans get to the businesses that need them? How will they get out of the door, and what plans does he have to ensure that the banks will have the capacity to provide those loans?

Secondly, recent figures suggest that one in 10 in our workforce looks set to be unemployed as a result of this crisis, with all that that entails for people’s future prospects, incomes, and their and their families’ health. Again, I say to the Chancellor that we will work with him. We have indicated many of the gaps in existing schemes to protect incomes, and will continue to push for them to be filled. However, we must be clear: the reason that those gaps are such an income-crushing, insecurity-producing crisis for so many is that, in most cases, the only alternative to coverage by these schemes is universal credit, which pushes people right down to an average of 10% of the income of the rest of the workforce. The DWP has made some welcome changes, but failure to change the initial loan into a grant threatens to create even more of a debt crisis among households. Apparently the Government are sympathetic to changing the loan into a grant, but we are told that the computer system just will not allow it, so my second question is: will the Chancellor knock heads together and get the computers to say yes to switching UC loans into grants?

Finally, as the Chancellor knows, before this crisis we had an economy that simply did not work for so many. Around a quarter of all families lacked just £100 in savings, even before the crisis began. The UK is the most regionally unequal country in Europe, and we have just had the longest squeeze on living standards—not just in a generation, but in eight generations. The recovery from this crisis must be faster and wider to ensure that as many people as possible have a job to come back to. We need a flexible furlough scheme. The Chancellor told me previously that it cannot currently be made more flexible, but other countries have done so. Will he work to amend the furlough scheme to allow workers to come back on a part-time basis, and will he do as so many other countries are doing, from Germany to New Zealand, and talk about how those hit hard by the crisis can be supported not just now, but in the future, with employment-boosting redeploying retraining schemes? The aftermath of the pit closures tells us that an approach where the Government shrug their shoulders will scar our economy for generations to come, so my last question is: will the Chancellor work together with me, trade unions, businesses and local authorities to develop a plan to offer the hope of work to those who have already become unemployed, and get our economy moving again?

[Rishi Sunak]

May I welcome the shadow Chancellor to her place, and thank her for the constructive dialogue that I have had with her over the past two or so weeks? Let me address her questions directly and swiftly. First, I turn to her question about the loan guarantee programme and the banks’ operational capacity. Obviously, this is something that the Economic Secretary and I, working with the banks, have spent a lot of time on over the past few weeks. I am grateful to the banks for re-engineering their entire systems to offer this brand new bounce-back loan. I am assured that it will be available from next Monday morning. There will be a very simple application process, and the banks will not have to conduct more than the customary fraud and anti-money laundering checks, which of course would be reduced for their existing customers. If someone has an existing business account with a bank, the process should prove incredibly rapid, and they should have the cash in their bank account within a day or two. The banks are readying their systems for that launch date as we speak.

I hear a lot from many commentators that we should copy what was done in Switzerland. Now, Switzerland does have 100% guaranteed loans—I absolutely agree that it does—but it is worth bearing in mind that it does not provide very much else in the way of direct fiscal support for their businesses. Indeed, after extensive dialogue with the Swiss Government, it is very clear that, for them, the loan guarantee scheme is the primacy of their direct fiscal support to businesses. In this country, we have provided tens of billions of pounds in direct cash support—in tax cuts through reducing business rates, in cash grants of £10,000 or £25,000, and by paying people’s statutory sick pay bill. These very direct cash impacts, I believe, are more generous than asking companies to take on a loan, which is why I believe that the Switzerland comparison is not analogous. Secondly, the Switzerland furlough scheme requires employers to contribute a fifth of the payment to the scheme, whereas in this country, our furlough scheme removes that very considerable cash burden from businesses.

As I always say when I am at this Dispatch Box or answering questions elsewhere, it is important to look at the totality of all our economic interventions. When measured as a percentage of GDP, it is very clear to me, as has been empirically shown by others, that the sum total of our fiscal intervention to support businesses and people through this crisis is one of the most comprehensive and generous, in terms of scope and scale, anywhere in the world.

Turning to the next question—on universal credit and support for the most vulnerable—I firmly agree that during this crisis, we must of course look after the most vulnerable in our society, and from the Budget onwards, I have strived to do exactly that. We have invested extra funds into tax credits and into universal credit, improved eligibility for statutory sick pay, improved employment support allowance, improved how these schemes work for the self-employed, improved the local housing allowance and, indeed, created a brand new hardship fund for local authorities to help people with their council tax bills. All these investments have a sum total of over £7 billion of investment by this Government to strengthen the safety net to help the most vulnerable in our society through this difficult period.

Lastly, with regard to the future, I wholeheartedly believe that the best way out of this is to ensure that as many people as possible can return to the job that they had. That is the best way to protect people and to protect their livelihoods, their families and their household incomes, which is why all our support has been conducted with that aim in mind—how can we help to support businesses? How can we help them to keep their employees attached to that business? I believe that our furlough scheme stands at the centre of that. All the other interventions will help to support that aim so that as we emerge from this crisis, we can bounce back as quickly as possible to the life that we once knew.

Finance Bill

Anneliese Dodds Excerpts

2nd reading & 2nd reading: House of Commons & Programme motion & Programme motion: House of Commons & Ways and Means resolution
Monday 27th April 2020 Commons Chamber

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

Thank you, Mr Speaker. May I echo the Financial Secretary’s comments about the hard work that you and the parliamentary authorities have gone to, to ensure that these proceedings could go ahead? Of course, as the Opposition we are well aware of the need for Government to have a legal basis to continue levying taxes, and we approach this Bill very much in that spirit.

Many of the clauses in this Finance Bill were written many months ago, with a large number of them involving relatively minor fixes to existing tax legislation—not exactly the vegetable waste and pig swill that the Financial Secretary referred to in his colourful and wide-ranging perorations, but none the less in large part delivering technical aspects of already announced policies. In fact, overall, this Bill presents a picture of continuing the business as usual of the last 10 years.

However, it is unthinkable that we will go many months before additional fiscal measures will need to be brought in by this Government. There will be an urgent need to stimulate the economy as and when we move out of the lockdown, and when boosting consumption will not threaten to damage disease containment. Other measures may well be needed to help alleviate some of the numerous supply-side problems caused by the current dislocation.

Finally, of course, we will need to deal with the considerable burden created by the costs necessarily incurred in fighting coronavirus. Subsequent Finance Bills will need to be very different from this one, and I want to use the time I have available to spell out why. We will need new approaches to taxation generally, the social contract with business, funding public services, the climate crisis and tax reliefs. I will deal with each area briefly in turn.

First, we of course need a different and fairer approach to tax. The Bill largely continues the previous framework, with its reductions in the tax paid by the very best-off people, while support for the worst-off has been reduced. The Financial Secretary will, I am sure, be aware of the Institute for Fiscal Studies analysis of the distributional consequences of successive Budgets since 2010. As of 2019, for example, due to changes in tax and social security, the poorest 10% of households have seen losses of 11% of their income, on average, as a direct result of reforms. Among those with children, the losses amount to 20%: that is £1 out of every £5 being removed from low-income families with kids. Large numbers of frontline careworkers fall into that category. We know from recent research by the Resolution Foundation that half of careworkers are not paid the real living wage, and tens of thousands appear to be paid even below the national minimum wage. They deserve better. In contrast, the best off 10% of people have seen losses of only 2% in their incomes due to tax and social security changes since 2010.

As all in this House will remember, George Osborne maintained that, in his recovery, 80% of the reduction in debt should come from cuts to spending and only 20% from tax changes, yet the latter went alongside cuts in income tax, inheritance tax and capital gains tax for the very best-off people.

There is already a lively debate about how we should deal with the costs incurred by the coronavirus. The academic consensus is that decisions taken to load the cost of debt on to spending cuts in the 2010s made our recovery slower than it would have been otherwise, so it was the slowest not only in a generation but in eight generations, and slower than in many other countries. I am not saying that to castigate the Government; I am saying it because we will need to adopt a radically different approach to future Finance Bills from that seen over the last 10 years.

We are currently feeling the impact of that decade’s fiscal approach very keenly, especially when it comes to UK households’ resilience. A quarter of UK families entered this crisis with less than £100 in savings—making it impossible for them, for example, to buy a new cooker or get their car fixed—and almost 2 million households did not even have a cooker in their home in the first place. As and when we return to what will be a very different normality, we must have building up financial resilience at the core of future Finance Bills. That will mean instituting a more progressive tax system, with those with the broadest shoulders contributing to services that benefit us all.

Secondly, we will need a new social contract with business. As discussed at length during the statement, huge numbers of businesses are currently struggling like never before. We have already discussed the Government’s economic package today, and I must emphasise again that there is a very strong expectation from the public that public support must translate into protecting jobs, not the extraction of value into already deep private pockets.

We have called for the Government to consider the examples of other nations, such as France and Denmark, as well as that of the Labour Government in Wales, when approaching the bail-out of different large firms. Jobs must be retained, workforces must be supported, and we should expect and require good corporate behaviour going forward. That means a ban on public funds being passed into tax havens or doled out immediately in dividends, no share buy-backs on bailed out companies, and a commitment to improvements in environmental performance in future.

We also need a renewed focus on dealing with the enablers of tax avoidance and evasion. I regret that we still do not see that when it comes to those who facilitated disguised remuneration loan arrangements, while those who received such arrangements continue to be affected by the loan charge.

The Bill rightly rows back on the Government’s previous ill-advised commitment to cut corporation tax further to 17%, by maintaining it at 19%. The OBR estimated that a cut to the latter rate would reduce receipts by £5.4 billion a year in three years. Recent reductions in corporation tax have not boosted investment in the UK. It was clear that such a reduction simply could not be afforded in current circumstances, and we therefore welcome that element of the Bill. When we talk to businesses, as I am sure Government Members do regularly, rates of corporation tax are not the headline reason for locating in the UK. Other factors are far more important, such as workforce development and training, logistical factors such as transport, and—critically—business rates, which are a key issue for many companies in our nation.

There is, of course, an imbalance in the taxation of those businesses based in fiscal property compared with internet-based businesses—the division between bricks and clicks. The Bill details the digital services tax—a new 2% tax on the revenues of search engines, social media platforms and online marketplaces that derive value from UK users. We welcome that tax to the extent that it recognises the comparative under-taxation of many digitally provided services, but we are concerned about the restricted scope of the measure. It means, for example, that Amazon will continue to pay a lower rate of tax in relation to revenue than many high street bookstores and other retailers. In addition, it fails to fill the gulf in unpaid corporation tax from many of the largest technology firms. TaxWatch UK has suggested that the UK is losing £1.3 billion in corporation tax from just five of those firms, and the digital services tax would make up less than half of that.

The current crisis suggests that digitally based businesses will amount to an even larger part of our economy in the years to come, so we need to get this right. Above all, our Government need to be more explicit about their discussions with international partners about the move to a formula-based corporation tax system. Given the ability of those firms to shift profits between countries, we must work with other countries to apportion taxing rights better.

The OECD’s anti-base erosion and profit shifting project was a good start, but it failed sufficiently to inform countries in the global south. I hope Ministers will be more forthcoming in future about what they are doing to seek that international consensus, not least given current hostility from the US towards multilateral approaches in a number of areas. This topic is controversial, and we need to hear more than just that our nation is engaged in those discussions.

I hope Ministers will be more forthcoming in their approach when it comes to local government finance, which is crucial in providing public services—from social care, to helping the homeless, to providing areas for leisure and play. Local authorities will be crucial in helping to rebuild the economy after this period, through their work on economic development.

My third point concerns the need for the Government to commit to a proper, deep and wide review of local government finance that takes account of the full impact of the crisis in terms of extra expenditure and forgone income, and which considers business rates and council tax in the round. We still only have a commitment to yet another restricted review of business rates. Surely we can be more ambitious in that area, as the need for a deeper review is now very strong. The goal must be to provide certainty and stability about the provision of local public services.

An additional area where action is needed is tackling the climate crisis. Survey evidence, albeit tentative at this stage, suggests a renewed appetite from the public to grasp the challenges posed by the need to decarbonise. The Bill makes small moves in the right direction. It incrementally increases vehicle excise duty, using emissions as a benchmark—the Chief Secretary to the Treasury mentioned that—and it introduces the world- wide harmonised light-duty vehicles test procedure, a UN-established vehicle testing procedure, in an attempt to prevent the gaming of emissions standards by vehicle manufacturers. We encourage the Government to adopt a steady replacement of all testing procedures within that framework. More broadly, we need a far stronger shift in taxation to disincentivise carbon production. The previous Finance Bill continued implicitly to support fossil fuels in a number of areas, and this one only sets the scene for some elements of the promised new plastics tax and the new emissions controls that will be necessary. Given that we have declared a national climate emergency in this very House, we need far stronger action in subsequent Finance Bills.

Finally, we fail to see in the Bill any substantive change in the Government’s approach to tax reliefs. This is essential. Public funding will be under pressure, so we must choose very carefully what we subsidise through these reliefs.

The incidence of tax reliefs has increased over recent years, yet there is little thorough oversight of their impact. Labour has called repeatedly for a thorough review of tax reliefs, but this Bill does not deliver one. As public finances come under substantial pressure, that position is no longer sustainable.

The National Audit Office’s recent report on tax expenditure showed that the Government are not reporting costs of over two thirds of reliefs; that must change. Alterations are made in this legislation to entrepreneurs relief—that was right to state—but the Institute for Fiscal Studies has suggested that the £1 million limit is still too generous. Furthermore, it does not achieve its principal aim of boosting investment, with the IFS stating:

“If one of the aims of reduced capital gains tax rates on business assets is to incentivise individuals to invest more in their businesses, this evidence suggests they are not working.”

We must ensure that corporate tax reliefs are focused on employment retention and promotion, and the provision of public goods. That is as essential for entrepreneurs relief as for the hundreds of others that continue to receive little public scrutiny.

There are many measures in the Bill that are sensible, that tidy up anomalies and that make life easier for taxpayers and HMRC, and we welcome them. But, as I have said, in many ways this feels like a Finance Bill for a different age. Subsequent Budgets and Bills will need to recognise the need for a much more resilient household financial situation and much more resilient public services, and will need to move away from the demand-sapping, confidence-stripping approach that has characterised the response to the last crisis. We stand ready to work with the Government where we can to achieve that new approach.

[Madam Deputy Speaker (Dame Eleanor Laing)]

We now have to introduce a formal time limit of five minutes. Members in the Chamber will be able to observe the clock, but I strongly advise Members who are participating virtually to have a timing device nearby that they can see, because, due to necessity, the five-minute time limit will be very thoroughly enforced.

Oral Answers to Questions

Anneliese Dodds Excerpts

Tuesday 24th March 2020 Commons Chamber

[Rishi Sunak]

I pay tribute to my hon. Friend for the work he does championing improved accessibility for his disabled constituents, which is why in the Budget we announced £50 million to remodel 12 stations. I spoke to the Secretary of State for Transport this morning about Burnley Manchester Road station, and he is happy to take a call from my hon. Friend.

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

Transport infrastructure and, indeed, all infrastructure relies on the construction industry, and in particular its workforce. We have had reports of workers working in close proximity in construction—indeed, I have seen that myself, including at transport-related facilities this morning—in some cases with no hygienic support and no evidence of enhanced cleaning. The industry has been described as a breeding ground for infection. What action is being taken to protect workers in that industry?

[Rishi Sunak]

The hon. Member is absolutely right: we must ensure the safety of our workers in their industries. The guidance from the Government last night was clear that people should go to work if they cannot work from home. In common with other countries such as Italy or France, construction has remained open, but of course it is right that that is done safely. I know that my right hon. Friend the Housing Secretary is in touch with the sector and I believe that he has had conversations about guidance in this regard.

--- Later in debate ---

[Steve Barclay]

My right hon. Friend is absolutely right. The Chancellor has made it clear that we will do whatever it takes to protect our NHS frontline, not just through PPE, as he correctly identifies, but by looking at additional capacity, such as in the independent hospitals sector, and at the support available, including the £1.3 billion allocated to speed up the discharge of patients, the £1.6 billion allocated to local authorities for adult social care and, of course, funding such as the £30 million for diagnostics research and £10 million for diagnostic testing that has also been allocated in recent days.

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

As a House, we require more specific detail about exactly what funding and arrangements are being provided across Government in relation to testing and PPE availability. We are all hearing from staff that they do not have the resources they need. The Minister talked about that funding, but to what extent is it being spent in the field, and what discussions has his Department had with the Department for Business, Energy and Industrial Strategy and the Department of Health and Social Care about pulling in additional manufacturers not just for ventilators but for PPE and testing?

Contingencies Fund Bill

Anneliese Dodds Excerpts

Committee stage & 2nd reading & 2nd reading: House of Commons & Committee: 1st sitting & Committee: 1st sitting: House of Commons
Tuesday 24th March 2020 Commons Chamber

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

This has been a very wide-ranging debate on a Bill that, though very short, is of course critically important, so it is important that we talk about its different elements. As my right hon. Friend the Member for Hayes and Harlington (John McDonnell) set out, the official Opposition support the Bill, but it elicits substantial questions. The first is about the different aspects of the expenditure; the second is about the process for delivering it; the third is about the process for overseeing it; and the fourth is about the Bill’s role in relation to the rest of the financial decision making cycle. I will try to touch on those aspects briefly.

First, we have had a wide-ranging debate on the measures. I will be very brief, so I will not be able to pick up on every issue that was covered. There has been discussion of NHS and social care spending. We still require more transparency about the additions to that spending, particularly around the targeting of PPE and testing. As the hon. Member for Gordon (Richard Thomson) said, there are still many issues on social security. For example, we have no clarity about exactly what the hardship funds provided by local authorities will be spent on. Will it be just council tax relief, or will it be more? We really feel the lack of the social fund here.

Of course, the problems for renters continue, as was rightly pointed out by my hon. Friend the Member for City of Chester (Christian Matheson). As my hon. Friend the Member for Blaydon (Liz Twist) said, many issues faced by charities are not dealt with by the sources of support that have been announced recently. I hope that the Minister listened to her recommendations and will take them up.

We have had a lot of debate about self-employment. We need those measures put in place as soon as possible. There was discussion about the scope of the measures, and the idea of not funding those self-employed people who already have resources. We seem to have one approach for the goose and another for the gander. For example, the system of loans is not conditional, whereas in some other countries it has been conditional on certain activities undertaken by the firms. We need to be fair.

On salary support, as the hon. Member for Thirsk and Malton (Kevin Hollinrake) said, it is essential that we keep as many people in work as possible. My party strongly agrees with him and has pushed for this measure. It is terrible for people if they lose their job, and terrible for the company because of all the associated costs and disruption. We need responsible behaviour from companies. We do not want to be talking about the villains after they have committed their villainy; we need the Government to call them out and to act. The Health Secretary did so eventually in relation to Sports Direct, but we need action much more quickly.

We need more clarity about vulnerable workers. We still have pregnant women and people with severe asthma being told they have to go to work, they do not have any choice. Clear guidance is needed on that and on insurance.

We need clarity on support for specific industries, as the hon. Member for St Ives (Derek Thomas) said, talking about transport and the travel industry in the Scilly Isles. He is right that that is a critical problem. As my right hon. Friend the Member for Knowsley (Sir George Howarth) said, talking about the construction industry, we need more pressure from Government on the critical issue of safety at work. What we are seeing all around us is immensely disturbing.

Again, we need more clarity on the business interruption loan scheme. Are personal guarantees required or not? If they are, when are they required? We have to ensure that a clear message comes through on that and on the British Business Bank and how quickly new banks are being brought into a relationship with it. Before, I heard days, not weeks. Which is it? We need this to be sorted out as quickly as possible. The right hon. Member for Kingston and Surbiton (Sir Edward Davey) asked a number of pertinent questions about the banking system that we need to look at here.

There are big questions not just about elements of the spending but about its delivery. As my hon. Friends have said, many organisations that were already fragile are having to spend resources without knowing exactly how those resources will be backfilled. Such organisations include local authorities, NHS trusts, schools or groups of schools, multi-academy trusts, transport providers and charities. I am very concerned that we have seen organisations stepping into the breach to deal with areas where there is not appropriate central Government support—or was not initially—and not being appropriately recompensed. For example, district councils have stepped into the breach and tried to co-ordinate volunteering, support food banks and so on. Will they receive the support they need to backfill those costs? It is not clear, and it should be.

Regarding the process for this Bill, I want to make it clear that the official Opposition will continue to offer to work with Government on these measures, but it vital that we have continued accountability. The hon. Member for Hitchin and Harpenden (Bim Afolami) talked about the pause in accountability that could occur after Parliament rises. I believe we need to ensure that accountability is continuous. We have some good cross-party working and cross-party discussions; issues have been placed on the agenda not just across parties, but by different Members within the Conservative party. It is important that continues, so I hope that there will be mechanisms to ensure that.

We will need further revisions to the package, at the very least by July. There will be lasting costs as a result of the crisis that are not provided for in the Bill, such as the costs of all the medical procedures that are postponed, the reduced tax revenue for local authorities, and of course the human cost, which is enormous. What will be the impact on children’s education? We must take an earlier look at those matters than necessarily what would occur during the normal financial cycle. These medium-term costs have to be dealt with.

Above all, in future Budgets we need to focus on building resilience. Currently our response to the crisis is more expensive because of the lack of resilience in our society and our economy. Take all the debate about people who are self-employed: a big part of that arises because our social security system is so unfit for purpose that it simply cannot support people’s incomes, not just in terms of its parameters, some of which to do with housing costs have been changed while many have not, but because of the infrastructure—the enormous waits for universal credit and the fact that so many families and individuals in our country, after a long period of income stagnation, simply do not have the resilience to cover any last-minute costs. The salary support system is taking so long to deliver at least in part because of HMRC’s lack of capacity. We really need to get a grip on many of the developments in the labour market over recent years that are making the response more difficult—not least the growth in bogus self-employment.

Many people are sacrificing an enormous amount to try to deal with this crisis and ensure that its impact is lessened as much as possible. It has been an unequal sacrifice. We need to ensure that we are never in this situation again, and that means a longer-term approach to our public finances than we have had over recent years.

Budget Resolutions

Anneliese Dodds Excerpts

Monday 16th March 2020 Commons Chamber

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

Thank you, Madam Deputy Speaker—that was slightly unexpected, but I am sure it reflected this wide-ranging and well-subscribed debate. We have heard some excellent maiden speeches. I wish I could praise them more fully, but it was wonderful to hear from the new hon. Members for Burnley (Antony Higginbotham), for Don Valley (Nick Fletcher), and for Great Grimsby (Lia Nici). I wish them every success in this place.

As my hon. Friend the Member for City of Chester (Christian Matheson) said, this was a Budget of two halves—a response both to coronavirus and to longer-term issues—but we needed an emergency Budget even before coronavirus came along. I am afraid I cannot agree with the rosy description the Minister gave of our economy at the start of the debate. Sadly, before the current crisis began, our economy was flatlining. We had three months of 0% growth up to January, we have had the lengthiest squeeze on living standards in this country since Napoleonic times, and we have had the slowest recovery from an economic crisis for 100 years.

We needed an emergency response in this Budget for the long term as well as the short term. I will talk about where there are some questions about the short-term response, but we broadly agree with the direction of travel and will work with the Government on those issues. However, we really need to see the long-term response. I hope we will have more detailed discussions about that, particularly once the present crisis has passed.

There has been much debate in the last few hours about public services. A number of Members talked about the new investment coming in, but a number also mentioned confusion about testing. We got more clarity during the course of the afternoon, but I make this plea to the Government: it is critical to have transparency. It was clear, at least in what I heard from the Health Secretary, that policy has been driven to an extent by the availability of testing. If that had just been made clearer earlier, we would have avoided much unnecessary confusion. We also learned today that the NHS will be required to identify and contact individuals who will need to self-isolate. I know many GP surgeries are doing that already, but we must recognise the hours that that mammoth task will take up.

Surely we also need more detail on international action. We heard the Health Secretary say today that every effort is rightly being made to bring on new ventilator capacity, for example. Can we have more detail about what work is being undertaken with other countries so we do not have an unseemly scramble for resources that are so desperately necessary in our country and others?

There was much discussion, too, about social care. As my hon. Friend the Member for Coventry South (Zarah Sultana) rightly said, we are in a difficult situation already when it comes to our social care services, with 500,000 fewer people receiving publicly funded care now than back in 2010. We did not have specific information about how social care organisations—not necessarily the small and medium-sized enterprises, which might be covered by other schemes—will be supported. A number of those bodies are already in financial difficulties. How will they be supported? We need that information.

On business support, the Health Secretary said he had his “eyes wide open” to the economic consequences of this crisis. His eyes are wide open, but he needs to take more action, given the dawning realisation of the potential impacts, which were described eloquently by my hon. Friend the Member for Vauxhall (Florence Eshalomi). Many of us share her concerns—including, it appears, Paul Johnson from the IFS, who stated today that the support so far is insufficient. We need answers to questions such as, what will be the role of the British Business Bank? What will be the precise co-ordination between banks? We know the Government are working with them, but what exactly will be done?

Critically, we also need answers about insurance. I was pleased to hear that the Economic Secretary is talking to the insurance industry but, first, we really need to understand when and if the Government will state explicitly that it is necessary to close facilities such as pubs, restaurants and leisure facilities. We know that, lacking footfall, they will practically close, but they will not be covered by insurance. Please—we need more information about that. As the hon. Member for Meriden (Saqib Bhatti) said, please can we ensure that this coronavirus is recognised for insurance purposes and push the companies to do that?

Then, of course, there are questions about support for individuals. There is a debate about sick pay tomorrow, when I am sure many Members will mention, as others did today, the need for short-working arrangements. That was mentioned by the right hon. Members for Tunbridge Wells (Greg Clark) and for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) and the right hon. Member for Wokingham (John Redwood). He is not a man with whom I am always in perfect agreement, but he was absolutely right to point out the need for those arrangements. Germany is looking at introducing them again, as it did during the financial crisis, and Ireland is already shifting towards a similar position. As my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) said, we seem to be a bit behind the curve when it comes to the international response in that regard, particularly in comparison with France.

There are also many questions about social security, which is essential in a situation where, as my hon. Friend the Member for Oldham West and Royton (Jim McMahon) said, so many people are a payday away from poverty. We heard many questions about help for the self-employed, which was mentioned by the right hon. Member for Epsom and Ewell (Chris Grayling) and my hon. Friend the Member for Manchester, Gorton (Afzal Khan). Simply saying that people can go on to universal credit or employment and support allowance, with all the issues we know they have, just is not good enough. As my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) said, unless we deal with income maintenance now, we will make the economic contraction even sharper than it needs to be.

There was much discussion today about housing. My hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) pointed out the dire impact of overcrowding in trying to deal with this crisis. I understand discussions about mortgages are going on and that there will be guidance on rough sleeping, but we need clarity on exactly what is going to change. Are the Government going to work with courts on evictions, foreclosures and so on?

Questions were raised about support for older people and whether the free TV licence would be provided for over-75s. What exactly is the action on free school meals going to be? It is good that the Government are talking among themselves—the Education Secretary talking to the Health team and so on—about free school meals, but what action will be taken? When will our devolved Governments know exactly which funds will be available? Just always saying, “We’ll get that information later” is not good enough.

The same situation applies to local government. As mentioned so many times, including by my hon. Friend the Member for Enfield, Southgate (Bambos Charalambous), there is no clarity yet about when public health allocations will become clear. We heard in the debate that local authorities will have even more responsibilities, for example, for burials in some aspects. Their rent will be diminished through the housing revenue account. It was telling that the Secretary of State said that help for charities would need to come from clinical commissioning groups, not local authorities. That perhaps reflects how hollowed our local authorities are, but how will the national volunteer effort, which we heard about again today, be delivered if it is not with the support of local authorities?

The Minister said at the start of the debate that we should be fighting this war while we are planning the peace. Then let us learn the lessons. We need to recognise how our response is being made harder because of changes that have occurred over recent years. My hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) listed the many sad, historic NHS waiting list records we have recently reached. We did not have any reference, in introductory speeches, to the health inequalities data that have come out recently, and we did not have reference to the crises in mental health and other areas. We needed a long-term plan for social care before this crisis. We needed the 100,000 staff we are missing from our NHS before this crisis. We are asking those staff to make extraordinary efforts. They have a sense of grim determination, passion and commitment to do the right thing, but we should never, ever again be asking them to do the right thing with so few resources after 10 years.