Covid-19 Economic Support Package

Anthony Mangnall Excerpts

Wednesday 14th October 2020 Commons Chamber

[David Linden (Glasgow East) (SNP)]

Recently the Government have quite rightly given stark and serious warnings of a second wave of coronavirus cases, with the numbers in hospitals increasing, the infection rate rising and further restrictions being put in place across the UK. While my SNP colleagues and I welcome what the Chancellor of the Exchequer has said recently, it is clear that he and his Government are not acting with the urgency that the situation deserves. Quite simply, the plans that he has set in place do not go far enough.

I have had countless constituents get in touch over recent weeks who are concerned about potential job losses and financial insecurity, with many wondering how they will get through the tough winter months ahead. The SNP has consistently warned the Chancellor that his economic plans, as they stand, are inadequate. We have repeatedly called for support for the industries suffering most during the pandemic, for an extension of the furlough scheme and for the increase in universal credit to be made permanent, but those calls have, I am afraid, fallen on deaf ears. It is my hope today that the Government will listen to what needs to be done, especially considering the recent serious warnings about the devastating impact of the second wave in which we find ourselves.

The SNP welcomed the Chancellor’s announcement that further support will be given to businesses being forced to close in new local lockdowns. However, that scheme, like the other financial packages that the Chancellor has announced, does not go far enough. From 1 November, the Government will pay two thirds of each employee’s salary for businesses forced to close in new local lockdowns, but that does not apply to workers whose employers cannot afford wages due to poor trading conditions, rather than any new Government lockdowns. For them, from 1 November, the furlough will be replaced by the new job recovery scheme, whereby the Government will pick up a maximum of just 22% of pay. To be eligible for the job recovery scheme, a company must pay an employee to work at least a third of the contracted time, and the remaining wages are split into three. The UK Government and the company pay a third each and the worker loses the rest. That is, I am afraid, completely absurd. Most people simply cannot afford to lose a third of their salary. They do not get a third off their rent, a third off their fuel and a third off their shopping when they go to Tesco.

I turn to the issue of hospitality. Yesterday, James Watt, the owner of BrewDog, had a conversation with Scotland’s First Minister, Nicola Sturgeon, to discuss supporting jobs in the hospitality sector, which is a massive priority for us. He was very clear in his agreement with the First Minister that the end of the job retention scheme will lead to a “a tsunami of unemployment”. He continues to urge the Chancellor to extend the scheme, stating:

“The proposed ‘Job Support Scheme’ will not protect jobs.”

This is not me, as an SNP MP, saying to the Chancellor that this is inadequate. This is somebody who is highly respected in the hospitality sector, and the Chancellor would do well to listen to him and not fiddle on his phone.

[Anthony Mangnall (Totnes) (Con)]

It is surprising to hear the hon. Member talk about the need to support tourism and hospitality sector when the SNP is putting forward rather puritanical bans on alcohol sales, no longer helping pubs and no longer helping the businesses in that sector. How can he lecture the Government on what form of support they should be giving after everything that they have done on the 15% cut?

[David Linden]

That was a wonderful addition to try to be a nice Parliamentary Private Secretary, but I am afraid that the hon. Gentleman clearly has absolutely no idea about the £40 million package put forward by the Scottish Government for the hospitality sector. Perhaps when he is sitting on the south coast of England dreaming up these lovely interventions to please his Whips, he would do well to read the full briefing paper.

The leaders of businesses across the UK agree that ending the furlough and job retention scheme is a very irresponsible and reckless decision, so to avoid mass redundancies, the UK Government must extend the furlough scheme in full. With the huge rise in covid-19 that we have seen so far with the second wave, and with the winter months approaching, now is not the time to be taking chances on job losses.

--- Later in debate ---

[Maria Eagle (Garston and Halewood) (Lab)]

I rise very much to support the motion that my hon. Friend the Member for Oxford East (Anneliese Dodds) has moved, particularly the part that says

“this House believes the Government should do what it takes to support areas with additional local restrictions”.

My own constituency is in the Liverpool city region, which is under tier 3 restrictions. The Chancellor might not know the unemployment figures for my particular constituency, but I can tell him that probably not unlike many other places, they have doubled this year. That is about 5,000 people.

I also have 15,000 people still on furlough in my constituency. I understand that when the Chancellor introduced the national furlough scheme, he wanted it to have an end point, but surely he anticipated that it would be ending when the pandemic was waning. In Liverpool, the pandemic is surging. We have no intensive care unit beds in Liverpool’s main hospitals: they are now full, and covid is impacting on other critical care, so the health service in Liverpool is already being impacted severely. Furlough is going to end in two weeks, and those 15,000 jobs are severely at risk, right in the middle of a huge resurgence in the virus.

The Chancellor has introduced his local furlough—that is the colloquial term—for those businesses that are forced by law to close, such as pubs, gyms, and other such businesses. I think it is wrong that those people who benefit from that, especially if they are on the minimum wage, should only get 67% of it. The Prime Minister said today that the figure was 93%, but they should get 100% of the national minimum wage. There should be a floor—let us be clear about that—and I hope the Government can do something about that. One does not have to pay 67% of the bills when furloughed, and food does not cost only 67% of what it normally does, so something needs to be done to help those people.

However, the Chancellor should also be very clear that there are many other businesses in my area, such as restaurants, that have not been forced to close but whose business is severely impacted. They have to close at 10 o’clock, and they have fewer tables. In my area, there is advice against non-essential travel. It is not essential travel to go to a restaurant, so people are advised not to go there, but these businesses are not going to get any support to keep their restaurants open through the local furlough scheme, and many of them will go bust.

[Anthony Mangnall]

Will the hon. Lady give way?

[Maria Eagle]

I am afraid I cannot give way, because I have only four minutes and some points to make. I apologise to the hon. Gentleman. The point is that many businesses and many thousands of jobs are at risk. They will not be getting extra support—I am sorry that the Chancellor is not listening—from any of his schemes in a tier 3 area. Those jobs and businesses are going to go. Those people will be unemployed and the Government will still have to pay towards their support.

May I also make the point in the short time I have left that 77,000 people in the Liverpool city region have been excluded as self-employed people from any Government support? They are barely hanging on and now with tier 3 restrictions yet again there is no support for these people or these businesses. What is happening will turn this pandemic, by the time Liverpool comes through it—and we will—into a cause of severe poverty and penury. It is not right that the Government are not doing enough to help.