Protection of Jobs and Businesses

Jim Shannon Excerpts

Wednesday 9th September 2020 Commons Chamber

[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.

--- Later in debate ---

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

I beg to move an amendment, to leave out from “House” to the end of the Question and add:

“welcomes the Government’s response to Covid-19 which has already protected the livelihoods of over 12 million people through the eight-month long Coronavirus Job Retention Scheme and Self-Employment Income Support Scheme; acknowledges the support for hundreds of thousands of businesses up and down the country through unprecedented loan schemes, business grants and tax cuts; further welcomes the help to support, create, and protect jobs through measures such as the Eat Out to Help Out scheme, a temporary cut to VAT and stamp duty, increased incentives for apprenticeships, and the new Kickstart Scheme, as set out in the Government’s ‘Plan for Jobs’ policy paper published in July; and further acknowledges that any deviation from this Government’s proposed plan will cause damage to the United Kingdom economy.”

The House needs no reminding of the scale of the economic challenge facing our country. Recent GDP figures confirm that we have entered an acute recession on a speed and scale that we have never seen before. An economic crisis on this scale means that whatever the Government do, jobs will be lost, businesses will close and, as the Chancellor said last month, “hard times are here”. We should not underestimate the challenge ahead, but neither should we underestimate the Government’s resolve or that of the British people.

From the outset of this pandemic, the Government have acted decisively to protect people’s livelihoods, with one of the most generous and comprehensive packages of support anywhere in the world. We are doing everything we can to recover our economy, support businesses and give everyone the opportunity of good and secure work. Our economic response is moving through a careful, co-ordinated plan, in three phases: first, the immediate response, which started with the Budget in March; secondly, the specific plan for jobs announced in July, to protect, create and support jobs; and thirdly, rebuilding, on which we will say more in the autumn Budget and the comprehensive spending review. Let me take this opportunity to thank the many people—including Members from all parties—businesses and other organisations that have brought forward ideas and suggestions to help us to shape that plan.

[Jim Shannon]

I put on the record my thanks for all that the Government have done through the schemes that have helped many of my constituents. One thing needed to make this situation work is the co-operation and help of the banks. Will the Minister consider extending freezes on cards and loans for businesses, especially those in the retail and hospitality sectors? Discussions with the banks and credit card providers are critical to help companies to get over the line. We should extend that period to help them to recover.

[Steve Barclay]

As the hon. Gentleman will know, my hon. Friend the Economic Secretary to the Treasury has regular discussions with the financial institutions; he will have heard the concerns set out by the hon. Gentleman and will be happy to take them forward in terms of how the banks respond. In some of the other measures the Government have taken—for example, on mortgage holidays—we have seen a recognition of and response to the concerns we have heard about from our constituents.

--- Later in debate ---

[Alison Thewliss]

The hon. Member ignores the fact that the SNP Government do not have the full range of powers that we need to protect our economy and which only independence can give us. He knows that is the case.

This is no ordinary economic downturn. The UK Government, on clear and urgent public health grounds, instructed and required many profitable, productive and sustainable firms to close. In sectors, such as hospitality, events, tourism, aviation, culture and the arts, these limitations will remain for the foreseeable future.

[Jim Shannon]

One thing we have not yet considered in this debate is the proposal for a four-day working week. Does the hon. Lady think a four-day working week could enable the economy to maintain its position and get beyond the dark spots of next January, February and March?

[Alison Thewliss]

The hon. Member makes a very good and well-considered point. There are lots of opportunities the Government have not considered for how we might spread around the limited and reducing number of jobs we have in order to keep people in employment.

The Federation of Small Businesses has noted that tourism and retail account for nearly half a million jobs in Scotland, many of them seasonal and rural, and many of them now facing the furlough scheme’s winding down at the very time business is at its quietest. As we have seen from local lockdowns, such as those in Leicester, Aberdeen and Greater Manchester, there is an urgent need to put in place more flexible and enduring support—exactly the type of further action the Chancellor promised he would take. Aberdeen, for example, only managed to raise £232,000 via the “eat out to help out” scheme because of the local lockdown imposed on hospitality there. That compares with over £1 million each in Glasgow and Edinburgh. We need to look at whether the schemes in place are flexible enough when local lockdowns happen.

A further spike and further local restrictions seem inevitable, so ending support now is incredibly short-sighted. Until public health grounds for closure are removed, the SNP believes that the Government have a clear responsibility to assist and support wherever they can. The Chief Secretary to the Treasury mentioned some additional schemes at the tail end of his remarks, but I would ask him to think very carefully: could he live on the money he proposes for those asked to self-isolate? If he ran a business, could he survive and pay wages, pay for stock, the rent and all the bills on the grants he has announced? He probably could not, and many businesses cannot and will fold as a result without support.

The Chief Secretary to the Treasury talked about phases of this crisis. The coronavirus is not done with us yet. Life is not going back to normal any time soon. The British Chambers of Commerce’s quarterly recruitment outlook revealed that 29% of firms expect to axe jobs over the third quarter—a record high. At the same time, the number of new job opportunities is also depressed across almost all sectors, as is reflected in the various vacancies data. For example, the Office for National Statistics and Adzuna data show the number of online job vacancies for Scotland for the week to 21 August to be almost half the 2019 average—down 49 percentage points—and the Office for Budget Responsibility has warned that UK unemployment could surpass the peaks of the 1980s after weaker than expected economic growth. The Chancellor and his Treasury team have a duty to prevent this kind of economic scarring. The devastation of the 1980s still haunts many communities, and I urge them not to gamble with the life chances of the people we are here to represent.