Economy Update

Cat Smith Excerpts

Wednesday 16th June 2021 Commons Chamber

[Steve Barclay]

One thing my right hon. Friend the Chancellor has shown throughout the challenges of the pandemic is his nimbleness and willingness to respond to changing circumstances, but part of the design of the package of support was that, if there was a delay to step 4, it would be accommodated through the continuation of measures such as the furlough, the self-employment income support scheme, the business grants, the business rates relief and the loans programme. That was part of the design, but throughout the pandemic it has very much been the Chancellor’s ethos to respond to changing needs.

[Cat Smith (Lancaster and Fleetwood) (Lab)]

For as long as the health restrictions mean that businesses must stay closed, it is right that the economic support package supports jobs in those workplaces, but that simply is not the case. With the extension of the restrictions and, from 1 July, employers having to make a 10% further contribution to the wages of employees who are furloughed, jobs and livelihoods will be put at risk, including 3,700 jobs in my Lancaster and Fleetwood constituency. Surely the Minister can see how illogical that is, so will he reassess the tapering on the furlough scheme?

[Steve Barclay]

With respect to the hon. Lady, the number on the furlough has come down. As I mentioned in my opening remarks, there has been an increase in the level of employment since November, and my right hon. Friend the Member for Preseli Pembrokeshire mentioned some of the challenges around employers wanting to hire and finding on some occasions that the furlough is an impediment to labour moving. Actually, I do not think the data bears out the hon. Lady’s point. The furlough has been a very expensive but essential measure in order to reduce economic scarring, but it is right that it tapers as we bounce back and more businesses open, and I think the data supports that.