The Economy

Karin Smyth Excerpts

Wednesday 8th July 2020 Commons Chamber

[Steve Barclay]

Again, we have taken measures with specific support, as my right hon. Friend the Chancellor set out. That is why we are cutting VAT for campsites and the tourism sector from 20% to 5%. That is part of it, but as the Chancellor also said, if we extended as the hon. Lady suggests, others would say, “Another month, another month, another month”, and people would be away from the labour market for a long period, which would not be in their interests.

[Karin Smyth (Bristol South) (Lab)]

Bailey of Bristol in my constituency is a world-class manufacturer, and I totally echo the point made by my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) that these businesses are not talking about forever. They are clearly talking about getting through to the spring. That is not that long, and it is a big investment. Please will the right hon. Gentleman reconsider?

[Steve Barclay]

Again, this was covered extensively in the earlier debate. First, the furlough is already in place for an extremely long period, until October. That is eight months, and we are only halfway through it. Secondly, other measures are being put in place, including measures to incentivise employers to bring those on furlough back. It is not right that people should stay on furlough for an extended period of time—[Interruption.] Nor have the Opposition set out exactly which sectors they want it extended for, or how that would apply in areas such as the supply chain. We would simply get an indefinite period in which that scheme would be —[Interruption.]

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[Karin Smyth (Bristol South) (Lab)]

I was in the Chamber when my hon. Friend the shadow Chancellor spoke earlier and it was obvious that the Prime Minister was visibly irritated by her comments, particularly those on public health and test and trace. However, as was echoed by my hon. Friends the Members for Ilford North (Wes Streeting) and for Nottingham South (Lilian Greenwood), we cannot separate the public health crisis, and the way in which the Government responded to it, from the response needed to the economic crisis. I am not an economist, but I have spent a lot of time in the health service and I know that we cannot rebuild the economy unless we build that public confidence. We saw last weekend that people start going back to places only when they know it is safe to do so.

At the beginning of this crisis, with my experience working in emergency planning in the health service, I thought the Government would revert to the usual tried and tested processes that were in place and that they would trust local government public health officials to trace people properly, as they know how to do. I have been totally shocked—I will admit, perhaps naïvely—at how incompetent the Government have been with their national imposition around the entire system, which has failed us so badly and led to so many excess deaths. Only belatedly are they turning to local government and that local public health expertise that does exist. Local government needs proper funding to continue to do that work to get a proper system in place so that people have the confidence to go back and support the economy. We cannot separate the two.

What we have had today is not a strategy for the future; it is not ambitious. I want the Government to succeed in putting the economy back together. I have three young people at home. I am desperately worried about the future for young people. Bristol South was devastated by the recession in the 1980s and people still bear the scars of that loss of jobs and loss of security, as well as the impact on people’s physical and mental health. I want the Government to do much better.

Most businesses in Bristol South are small and medium-sized enterprises and there are many freelancers. They are not getting the support that they need. Women are more likely to be in shut-down sectors, particularly in retail and hospitality. Women—in fact, all families—cannot work unless there is decent child care and social care in place. The Women’s Budget Group—

[Nadia Whittome (Nottingham East) (Lab)]

My hon. Friend may have been about to make the point that analysis from the Women’s Budget Group shows that over 2 million jobs could be created in the care sector, which is more than are being created by any of the Chancellor’s schemes today. Does she agree that the Government should meet with the Women’s Budget Group to address this clear oversight in their policy making?

[Karin Smyth]

I am grateful for that intervention. That is exactly the point that I was going to make—more than 2 million well-paid jobs in this sector. In Bristol, social care makes up 13% of employment and it desperately needs supporting. The Minister has left the Chamber, but he commented in relation to another question that women’s income is quite important to families. It is not the 1950s. It is not pin money that women are earning. They are supporting their families and the gentlemen in the Treasury need a bit of help on the real economy as it affects women, which we are ready and willing to offer.

I want to focus my final comments on the further education sector and adult skills and training. They seem to be a bit hidden with respect to what we have seen today, and I am still trying to understand the detail, particularly as it affects apprenticeships. I am co-chair of the all-party parliamentary group on apprenticeships and I have long supported the Government’s work in this area, working very closely with Ministers. Again, I want to see the apprenticeship system succeed. It is a ladder of opportunity for my constituents who are the least likely in the country to go to university. Please do better.

I have written to the Education Secretary suggesting an approach by Bristol City Council to retain some levy funds so as to be able to support public sector recruitment for apprenticeships. I would like an answer quite soon. Also, I would like to understand from the Government today whether we can clarify what impact the kick-start programme, which we do welcome, will have on businesses if they take on apprenticeships. If that could be addressed later, I would be very grateful.

It looks like colleges are getting some money, but it is a long way short of what they have been losing. City of Bristol College is hugely skilled in blended learning, supporting the most vulnerable and the least skilled youngsters, as well as those with greater skills, in our economy. We want further education colleges to succeed. They are ready to help with catch-up, training and adult skills, but they need to be properly funded to do that.

I would also like to know what the Government have estimated the regional economy of the west of England to be. We have been a net contributor to the Treasury in the past; we seem to be falling behind. When will we understand what these proposals mean for the west of England? At the start of this crisis, the Government said they would support local government. Bristol City Council is £76 million in debt. We need the Government to do better. Please support Bristol.

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[The Economic Secretary to the Treasury (John Glen)]

It is a privilege to close this debate on behalf of the Government and I thank hon. Members from across the House for their varied and considered contributions, which I will reflect on in a few moments.

At the outset of this crisis, the Government introduced a £160 billion package of measures to protect jobs, incomes and businesses from the harm and disruption caused by covid-19. Thanks to the action that we took, millions of jobs and livelihoods have been safeguarded through the worst months of the pandemic. Most importantly, our frontline services have received the money that they need to tackle this virus head-on and to support the most vulnerable in our society, but we have always been clear, as the Chancellor reiterated today, that we are ready to take further action as the circumstances developed.

Throughout this crisis, we have listened to hon. Members across the House, just as we have listened to businesses and those working in public services. That is why we announced the bounce back loan scheme in response to some of the challenges with the CBIL scheme to help the very smallest firms and sole traders who might not otherwise be able to access the finance that they needed. It is why we announced that both the coronavirus jobs retention scheme and the self-employment income support scheme would be extended into the autumn. It is worth remembering that we still have three and a half months to go on those schemes. It is why my right hon. Friend the Secretary of State for Digital, Culture, Media and Sport came to this House on Monday to announce a bespoke package of support for theatres, museums and our hard-hit creative industries. As a former Arts Minister, it is great to see the National Gallery leading the way by opening today.

Today marks a new phase in our new economic response as we look to the future and to our recovery with a plan for jobs. It is a plan that will build on the success of our jobs retention scheme by rewarding and incentivising employers to keep previously furloughed staff in work through the autumn and into the new year by paying them a jobs retention bonus.

[Karin Smyth]

Will the Minister give way?

[John Glen]

I will not, given the time.

It is a plan that puts young people front and centre, with a kick-start scheme that will pay employers to create quality jobs for 16 to 24-year-olds at risk of long-term unemployment, alongside new funding for apprenticeships, traineeships and sector-based work academies. We shall be issuing guidance very shortly on how those schemes will interact with the extra support that we are putting into jobcentres. It also means that we shall invest in infrastructure, decarbonisation, and maintenance projects that will serve the needs of communities across the country, while creating jobs and apprenticeships here and now.

Through our collective efforts, coronavirus has been brought under control in this country, but it has not disappeared completely. Even as our economy reopens, many businesses and families will continue to face significant challenges. The Chancellor made it clear today that the Government are not driven by ideology; we are guided by the simple desire to do what is right. For that reason, we will continue to take significant steps to support the economy in the weeks ahead. We will, for example, inject new certainty and confidence into the housing market by increasing the stamp duty threshold to £500,000 for first-time buyers. That recognises the additional expenditure in the economy derived from a house purchase, and, we anticipate, will have a significant effect.

Few sectors have been harder-hit, though, than retail, hospitality and entertainment, so, from next Wednesday, VAT on food, accommodation and attractions will be cut from 20% to 5%. I welcome the positive comments from across the House for that measure. Through the month of August, everyone in the country will be entitled to a Government-funded discount of 50% in restaurants, pubs and cafés, Monday to Wednesday. The “eat out to help out” discount is the first of its kind in this country, and proof that the Government will leave no stone unturned in our efforts to protect people’s jobs and livelihoods.

I shall now mention some of the themes of this afternoon’s debate. My hon. Friends the Members for Stoke-on-Trent South (Jack Brereton), for High Peak (Robert Largan) and for Keighley (Robbie Moore) emphasised the need for investment in local infrastructure and levelling up, and that means investing now to prevent long-term damage to the economy and support the private sector. That is why the Government have brought forward the shovel-ready projects.

On the theme of sustainable public finances and recapitalisation, my right hon. Friends the Members for Wokingham (John Redwood) and for Chipping Barnet (Theresa Villiers) and my hon. Friend the Member for North East Bedfordshire (Richard Fuller) recognised the challenges ahead with respect to the third phase that the Chancellor referred to today, and we shall be responding in the Budget later this year. My hon. Friend the Member for North East Bedfordshire raised a particularly important point about the need to encourage the private sector to generate the jobs ahead.

My neighbour, my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes), made a passionate speech, referring to the need to address urgently the challenges faced by the beauty industry. She also mentioned the disproportionate impact on women, people from the BAME community and the disabled, and we shall be responding to the excellent report that her Committee, the Women and Equalities Committee, produced in the spring.

There was a moment of synergy between my hon. Friends the Members for Buckingham (Greg Smith) and for St Albans (Daisy Cooper) as they backed the “eat out to help out” campaign, and my hon. Friend the Member for South Dorset (Richard Drax) emphasised his commitment to that in terms of support for pubs.

There were also references to the need for resilience with our local authorities, who have received £3.7 billion in new grant funding. We will work closely with local authorities as we move into the next stage.