Covid-19 Economic Support Package

David Linden 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.

[Mr Perkins]

The hon. Member is absolutely right about the appalling health and economic consequences of this. Do he and his party support the advice from SAGE for a two-week circuit-breaker so that we can get on top of this health crisis and try to give the Government time to get test and trace to work? Does he support what the Labour party has called for?

[David Linden]

One of the things that we are seeing in Scotland is that test and trace is working a lot better, and that is because we have not hived it off to, for example, Serco. We have been very clear that we will follow the scientific advice and we will do our very best to get that balance. That is what we have seen with the restrictions that came into place last week in Scotland. We will see how that goes. We are always keeping things under review, but the reality is that we need to follow the advice and get a balanced approach. That is exactly what we are doing, and I am sure that we will see that bearing fruit.

I turn to the issue of the excluded 3 million. The SNP has consistently and continually raised the 3 million who were excluded from the Chancellor’s initial financial support packages back in the spring. Let us be clear that the Treasury continues, I am afraid, to exclude artists, freelancers and the newly self-employed from these recent economic plans. Three million people were shut out of the vital financial support that they desperately needed during the first wave of the pandemic and they were left to face huge financial insecurity, with their livelihoods and businesses put at risk. Rather than listening to the calls of these 3 million people, the Chancellor has decided to leave behind the self-employed yet again in his economic plans, with a 70% replacement of profits being replaced in November with just 20%.

Another group that has repeatedly been excluded from the Chancellor’s financial packages has been the arts and culture sector. We saw this week the closure of all Cineworld theatres across the UK, including the one in my constituency in Parkhead. I again call on him to provide sector-specific support for the arts and culture sector, which we know will continue to suffer during the second wave of the pandemic. [Interruption.] I hear the hon. Member for South Suffolk (James Cartlidge) chuntering away that the Chancellor has just done that, but many people in our constituencies in the arts and culture sector make it clear to us that that support does not go far enough. If the Chancellor has done that, why is Cineworld in Parkhead closing?

I have described thus far a very tough image of countless jobs being at risk. Many sectors are vulnerable and some businesses are wondering if they will make it to the new year, but the rising cases should emphasise to the House that we are still in the midst of this pandemic, which has already delivered severe blows to people’s incomes and financial security, with the most vulnerable people facing a disproportionate economic hit. That is why the SNP has repeatedly called upon the Government to make the £20 increase to universal credit permanent, especially after the latest findings from the Institute for Fiscal Studies, warning that 4 million families could see their support slashed if the Tory Government refuses to make that £20 uplift permanent.

The Joseph Rowntree Foundation has highlighted that nearly three quarters of a million more people, including 300,000 children, could be forced into poverty if the uplift is not made permanent. That must serve as a wake-up call for the Government. The Chancellor cannot continue to turn a blind eye to the vast inequality that exists right across the UK. With the winter months approaching, the poorest and most vulnerable people will suffer the most from the Chancellor’s economic plans, and it is quite clear that he has a choice in front of him and that he needs to do much better by them.

[Patrick Grady (Glasgow North) (SNP)]

Is that not exactly right? One way or the other, the Government are going to have to pay for this. They are going to have to meet the costs, and they can either do that by extending job support schemes by looking at really imaginative, creative, long-term support such as universal incomes, or through universal credit and all the social consequences that come from long-term unemployment and taking us back to the Thatcherite 1980s.

[David Linden]

I agree with my hon. Friend, but I have to say that I did give the UK Government a degree of praise at the beginning of the pandemic, because it did seem that they were moving in a way that perhaps was not part of traditional Tory ideology, with a lot more state intervention and a lot more Government support. I think there were quite a few of us in this House who, while we would disagree enormously on the politics, welcomed the fact that the Chancellor was willing to be innovative and try new things.

One thing I would say is that nobody prepares us for a global pandemic. Politicians and people in this House have seen recessions and people have seen wars, but nobody prepares us for a pandemic. Yes, there has to be a degree of flexibility on the part of all of us in this House, but the thing I am most concerned about is that the British Government seem to have moved away from those creative, innovative solutions they had at the beginning of the year. We now find ourselves in the midst of a second wave, and all of a sudden that dynamism and creativity the Chancellor has been credited with seems to have gone away, because of the pressure that comes from people on the 1922 committee. I do not think that people on the whole are going to forgive that.

[Kevin Hollinrake]

Does the hon. Member agree with the Opposition that there should be multiple circuit breakers, and if so, is that what the policy will be in Scotland?

[David Linden]

I am not sure that the official Opposition are proposing multiple circuit breaks, to be fair to them, but it is not my job to defend the policy of the Labour party. However, what I will defend is the approach of the SNP Scottish Government, who are trying to do this in a balanced way, but we would like to see a lot more financial flexibility to do that. It would help if the UK Government gave us those financial powers. That is what I would say to the hon. Gentleman on that.

I want to come on to that very point, and highlight the work that the Scottish Government have done in supporting business during the second wave of the pandemic. The Scottish Government’s total package for businesses is over £2.3 billion. That is more than the consequentials received from the UK Government. As I mentioned to the hon. Member for Totnes (Anthony Mangnall), the Scottish Government are making an additional £40 million available to support businesses that will be affected by the new measures, and will work with affected sectors in the coming days. I am in no doubt of that. My city of Glasgow is one of those that have been under local lockdown restrictions, and the restaurants and bars in my constituency have had to shut down, but we have recognised when we have asked them to shut down, which is a way of trying to reduce the spread of the virus, that support must be coming.

The Scottish Government will continue to discuss with businesses how the support package we have offered can mitigate some or all of the employer’s contribution to the UK job retention scheme. We have put in place a £230 million “restart the economy” capital stimulus package to help stimulate the economy following the pandemic. We have announced details of a £38 million package of support for innovative early stage businesses. We have committed £2.2 million of funding to the Music Venue Trust, which will provide stability to grassroots music venues over the coming months.

What all this should highlight is that the UK Government’s financial plans have been and continue to be inadequate—excluding the self-employed, freelancers and artists; prematurely ending the furlough scheme; and refusing to make permanent the £20 increase in universal credit. Where we have had the power, the Scottish Government have spent £6.5 billion on tackling covid—above the Barnett consequentials—and they are doing all they can and all within their powers to support businesses across Scotland.

That is the issue at hand. There is only so much that the Scottish Government can do when the vast majority of Scotland’s tax and spending decisions are taken here in Westminster. The fact is that the Government cancelling the UK Budget simply demonstrates that Scotland remains an afterthought for the Tories. I would be more than happy to give way to the Chancellor if he can stand up and give some sort of clarity to Scotland’s Cabinet Secretary for Finance about what budget we are supposed to set when the Government have just gone ahead in this way.

[Rishi Sunak]

I have addressed this previously, in this place and others. There is absolutely no bar on the Scottish Government setting a Budget in advance of the UK Budget. The fiscal framework itself allows for that very possibility. That is exactly what happened at the start of this year, so there is simply no reason why that cannot happen. The OBR forecasts were provided as normal this autumn. Those forecasts are used by officials to make all the necessary calculations. It is simply wrong to suggest that the Scottish Government are unable to set a Budget until the UK Government have.

[David Linden]

Conservative Governments used to be really good on upholding the rule of law, and Conservative Governments used to be really good when it came to managing the economy, but we now have a Chancellor who appears to want the Scottish Government to set a completely blind Budget. For somebody who tries to advocate the idea of fiscal responsibility, that strikes me as rather bizarre.

People in Scotland are increasingly aware that the only way to move forward in terms of protecting our economy, managing our own finances and standing on our own two feet is with the powers of independence. With the United Kingdom Internal Market Bill destroying their hard-fought devolution, more and more Scots are supporting the SNP in calling for independence.

An Ipsos MORI poll revealed yesterday that 65% of people in Scotland think Britain is heading in the “wrong direction” compared with just 12% who think Britain is heading in the “right direction”. If we want to continue looking at polling, and I know the UK Government are doing quite a lot of polling on this issue at the moment—they are being a bit coy about releasing it—Ipsos MORI released a poll today showing that 58% of Scots now support Scottish independence.

I suggest to the Chancellor of the Exchequer that that backs up the point that people in Scotland can see this UK Government are not doing enough, and therefore they want to see these powers being transferred to Scotland so we can take our own decisions on these issues.

[Stewart Hosie (Dundee East) (SNP)]

Does my hon. Friend not think the Chancellor’s intervention was rather peculiar? The Chancellor is, of course, absolutely right that the Scottish Government can set a Budget, notwithstanding that it would be blind, but, depending on the Chancellor’s decisions, it may lead to subsequent in-year cuts or in-year changes. I am sure this Chancellor would not tolerate it if someone else was setting part of his Budget.

[David Linden]

I thank my hon. Friend for putting that on the record.

I do not want to detain the House too much. In conclusion, SNP MPs have stood up in this Chamber and made calls for the UK Government to do the right thing and support the public through the second wave of covid-19 cases. What they have put on the table so far does not go far enough, and that is why we will vote for the motion before the House tonight. I am grateful for the House’s forbearance.