Covid-19 Economic Support Package

Jonathan Gullis Excerpts

Wednesday 14th October 2020 Commons Chamber

[Anneliese Dodds]

I am grateful to my hon. Friend for making that point. I believe that, actually, the contact rate is radically higher—above 90%, which is very significantly different. We are in a peculiar situation where our Government appear to believe that it only makes sense for local areas to get those powers, and the resources necessary to deliver them, once infections are already at an extremely high rate—once they are in tier 3. I find this very peculiar. Perhaps the Chancellor can explain why that support is only provided once local areas are at a high infection level.

Adequate support must be provided to those at the sharpest end of this crisis—those working in businesses that have been closed for public health reasons. The expansion of the job support scheme to closed businesses acknowledges an obvious gap in the original scheme. The Government maintain that, with their changes to universal credit, the lowest-paid workers will receive up to 88% of their previous income, but that ignores the continuing problems that the Government refuse to fix with universal credit and allied areas of policy. Why have they still not uprated the local housing allowance to median market rents so that affected people can cover their housing costs? Why will they not extend the ban on evictions? Why have they retained the benefit cap, now affecting twice as many people as at the start of this crisis? Why have they not abolished the two-child limit on universal credit and tax credits? Will the Government follow the previous Labour Government and reduce the waiting period for support from the mortgage interest scheme?

The list of questions goes on and on. It includes really significant ones about firms that have not been legally required to close but whose business has been heavily impacted by the imposition of new restrictions, so they will struggle to keep staff on for even a third of their hours. For those firms, the Chancellor’s job support scheme too often fails to incentivise businesses to bring back more staff part-time, instead of keeping some full-time and letting others go.

[Jonathan Gullis (Stoke-on-Trent North) (Con)]

When the hon. Lady talks about Government intervention and support, will she welcome the eat out to help out scheme, which meant that ceramic tableware manufacturers in Stoke-on-Trent saw orders massively increase? Will she personally write to them to apologise for saying that she wants to shut down the hospitality sector and therefore make sure that the kilns never start up again?

[Anneliese Dodds]

I have been very grateful to representatives of the ceramics sector, with whom I have had a lot of dialogue. I am very concerned about their situation. I am concerned about the lack of targeted support that has been provided to maintain our manufacturing capacity. I regret that the hon. Gentleman did not listen to what not just Labour but SAGE experts had been stating clearly: this Government will end up being potentially forced into a situation where they must apply additional restrictions. Why wait until a time when restrictions will be less effective when we will have had many weeks of reduced business confidence for the very restaurants that I, too, am deeply concerned about, which will have suffered from week upon week of reduced demand? I say: take decisive action now; that is what is needed.

In key sectors, the cost of keeping on more staff on fewer hours is higher in the UK scheme than under comparable initiatives in Germany, France and the Netherlands, even when the poorly-designed job retention bonus is factored in. Businesses want to do the right thing by their staff, but the Chancellor is pushing them to flip a coin and decide who stays and who goes. When will he fix the flaws in the job support scheme?

The Government have also left yawning gaps in their offer for the self-employed. From the start of next month, the support available will fall from 70% of pre-crisis profits to just 20%. That might be an appropriate policy if we were seeing a healthy economic recovery and rising consumer demand, but that is, very sadly, not the case. We need a targeted scheme that works for those self-employed people for whom business is still nothing like back to normal. Months on from the start of the crisis and the first package of economic support, there are still too many people who have fallen through the gaps. The Government’s message to those people is just, “You’re on your own—sink or swim.” That is not good enough. So I ask again: what will the Government do to help those who have been excluded from support so far?