Economy Update

Rishi Sunak Excerpts

Thursday 5th November 2020 Commons Chamber

[The Chancellor of the Exchequer (Rishi Sunak)]

On Monday, the Prime Minister set out the action we need to take between now and the start of December to control the spread of coronavirus. In response, we are providing significant extra support to protect jobs and livelihoods in every region and nation of the United Kingdom: an extension to the coronavirus job retention scheme; more generous support to the self-employed and paying that support more quickly; cash grants of up to £3,000 per month for businesses that are closed, worth over a billion pounds every month; £1.6 billion for English councils to support their local economy and local healthcare response; longer to apply for our loan schemes and the future fund; the chance to top up bounce back loans; and an extension to mortgage payment holidays. That is all on top of more than £200 billion of fiscal support since March.

This statement follows the Bank of England’s monetary policy decisions earlier today, meaning all economic and monetary institutions are playing their part. As the House would expect, the Governor and I are in constant communication as the situation evolves. Our responses are carefully designed to complement each other and provide certainty and support to people and businesses across the UK. The Bank’s forecast this morning shows that economic activity is supported by our substantial fiscal and monetary policy action. Just last week, the International Monetary Fund described the UK’s economic plan as “aggressive”, “unprecedented”, successful in “holding down unemployment” and business failures, and

“one of the best examples of coordinated action globally”.

Our highest priority remains the same: to protect jobs and livelihoods. That is why we have already decided to extend the job retention scheme to December. But people and businesses will want to know what comes next, how long we plan to keep the scheme open, and on what terms. They want certainty. The Government’s intention is for the new health restrictions to remain only until the start of December, but, as we saw from the first lockdown, the economic effects are much longer lasting for businesses and areas than the duration of any restrictions. As the Bank of England has said this morning, the economic recovery has slowed and the economic risks are “skewed to the downside.”

Given this significant uncertainty, a worsening economic backdrop and the need to give people and businesses security through the winter, I believe it is right to go further, so we can announce today that the furlough scheme will not be extended for one month; it will be extended until the end of March. The Government will continue to help to pay people’s wages up to 80% of the normal amount; all that employers will have to pay for hours not worked is the cost of employer national insurance contributions and pension contributions. We will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.

Of course, as the furlough itself is now being extended to the end of March, the original purpose of the job retention bonus to incentivise employers to keep people in work until the end of January obviously falls away. Instead, we will redeploy a retention incentive at the appropriate time. For self-employed people, I can confirm that the next income support grant, which covers the period November to January, will now increase to 80% of average profits, up to £7,500.

I also want to reassure the people of Scotland, Wales and Northern Ireland. The furlough scheme was designed and delivered by the Government of the United Kingdom, on behalf of all the people of the United Kingdom, wherever they live. That has been the case since March, it is the case now and it will remain the case until next March. It is a demonstration of the strength of the Union and an undeniable truth of this crisis that we have been able to provide this level of economic support only because we are a United Kingdom. I can announce today that the up-front guaranteed funding for the devolved Administrations is increasing from £14 billion to £16 billion. This Treasury is, has been and will always be the Treasury for the whole of the United Kingdom.

I know that people watching at home will have been frustrated by the changes that the Government have brought in during the past few weeks. I have had to make rapid adjustments to our economic plans as the spread of the virus has accelerated. I would like to take this opportunity to explain how and why this has happened. During the summer, as we began slowly unlocking, it was our hope that the country would continue to be economically open, albeit with local restrictions being put in place as and when needed. We knew that there would likely be a resurgence in the spread of the virus, but with increased NHS capacity and test and trace, our belief was that we would be able to stay ahead of the virus. On that basis, we designed an economic approach that continued to provide wage support to people, incentivised businesses to retain staff beyond the end of the furlough scheme, and created new job-creation and training schemes such as kickstart, all built to support an economy that was broadly open but operating with restrictions and overall lower demand. At the time, this approach was not Government acting alone. Our proposals secured wide-ranging support, from the TUC to the CBI. It was their hope, as it was ours, that the public health situation would allow us to keep businesses and workplaces open.

The virus, however, continued to spread. Localised restrictions were having an impact, so we intensified this approach and added further areas. As these restrictions intensified, the economic impact, particularly on industries such as the hospitality sector, was significant, so in response we altered our approach to wage support, making it much more generous to employers and in turn protecting jobs. We also introduced a range of grants to businesses, whether open or closed, to help them meet their fixed costs, and additional funding for local authorities to respond to specific local economic challenges.

But again, the virus continued to spread, but more quickly, and so we arrive at last week, when the Government’s scientific and medical advisers presented data which showed that R is greater than 1 in all parts of the country, that the NHS was at risk of being overwhelmed in a matter of weeks and the likely resultant loss of life that would accompany such an event. The only viable solution left to protect our NHS was the reimposition of temporary significant enhanced restrictions in England, in addition to those in Wales, Northern Ireland and Scotland. So given these changed public health restrictions and the economic trauma they would cause in job losses and business closures, I felt it best to extend the furlough scheme rather than transition at that precise moment to the new job support scheme.

Political opponents have chosen to attack the Government for trying to keep the economy functioning and to make sure the support we provide encourages people to keep working. They will now no doubt criticise the Government on the basis that we have had to change our approach, but to anyone in the real world that is just the thing you have to do when the circumstances change. We all hope for the best but make sure we plan for any eventuality. We can reintroduce the furlough now only because we kept the system on which it is based operational, because there was always the possibility that we would be back in this situation. I will leave it to the people of this country to decide whether they believe the Government are trying our best to support people through an unprecedented crisis, to decide whether it is a good or bad thing to alter our economic plans as the health restrictions we face change.

What I know is that the support we are providing will protect millions of jobs. What I know is that it is never wrong to convey confidence in this country and our economy through our words and action. And what I know is that today’s announcement will give people and businesses up and down our country immense comfort over what will be a difficult winter. I commend this statement to the House.

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[Rishi Sunak]

I thank the hon. Lady for her questions. The claim that our action was too late is, in the words of the Government’s own medical advisers, a misapprehension, because there is no perfect moment at which to enact measures that have far-reaching and damaging consequences for the people and businesses of our country. We should only enact such measures when it becomes truly unavoidable. It is also entirely false of Labour Members to claim that things would somehow be different if only we did what they suggested, because they could not actually explain what their position was. At first, it was a circuit breaker for two weeks. Then it was an intervention that might last longer—I think yesterday we heard three weeks—and then it was something that would need to be reimposed again and again and again. That is not a plan that would support the businesses and people of this country.

The hon. Lady asked about the NHS. We have provided the NHS with tens of billions of pounds to ensure that they can do the very valuable job that they are doing, and they will have our full support over this difficult winter period. She asked about support for local authorities. We have provided just over £1 billion to give local authorities the ability to support their local businesses and economies through the winter period, on top of the direct support that those closed businesses will receive. She also asked about supporting local track and trace efforts. I agree that that is important, which is why we have provided, on a transparent funding formula, almost half a billion pounds to local authorities to ensure that they can carry out enforcement, compliance and local contact tracing at the level that they need.

The hon. Lady called for a six-month plan, yet she and her party have not put forward a six-month plan of their own, and I understand why. It is because they know—as most Members of this House, and most people and businesses in the country, know—that we are dealing with a once-in-a-century event. They know—as most Members of this House, and people and businesses up and down the country, know—that in the face of such an unprecedented crisis, the Government must be flexible to ever-changing circumstances. It is not a weakness to be agile and fast moving in the face of a crisis, but rather a strength; and that will not change.

[Mel Stride (Central Devon) (Con) [V]]

I agree with my right hon. Friend that taking an iterative approach to these problems as circumstances change is a strength rather than a weakness, but may I just focus for a moment on the lockdown itself? As my right hon. Friend will know, the minutes of the SAGE meeting held on 21 September stated:

“Policy makers will need to consider analysis of economic impacts and the associated harms alongside this epidemiological assessment. This work is underway under the auspices of the Chief Economist.”

My right hon. Friend knows that I wrote to him asking that the analysis referred to in those minutes be provided prior to the vote on lockdown that was held in the House yesterday, as this would have helped to inform that debate. The reply that I received did not provide the information requested, so will he confirm that the SAGE minutes are accurate when they state that the Treasury has worked on this analysis under the auspices of its chief economist? If they are accurate, will he confirm that the Treasury will release this analysis without delay?

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[Rishi Sunak]

My right hon. Friend will know that I replied to him and his Committee with the answers to his question. There does not exist a specific prediction or forecast, which I think is what he is asking, but what we did provide—and the economic evidence that we considered—was the context for the lockdown being imposed and the impact that the initial lockdown has already had so one could make their own assumptions about what would happen thereafter.

My right hon. Friend will know as well as I do that the Office for Budget Responsibility is one of our pre-eminent forecasters, and it is already forecasting that the economy will fall by about 10% this year, that unemployment will reach 12%—an increase of 2.5 million people—and that in the medium term our economy will suffer scarring of about 3%, which represents tens of billions of pounds of less economic output. He will, of course, also know the impact that this is having on our public finances. That is the situation as it exists today, before we enter the new set of restrictions, which will obviously cause additional stress on all the numbers that I have outlined to him, and he will have seen the Bank of England’s comments this morning that the duration of further restrictions will increase their impact of long-term scarring on the economy.

[Alison Thewliss (Glasgow Central) (SNP) [V]]

I am tempted to read out the comments I made on Tuesday, or indeed any of the contributions I have made in the past six months, because it feels like I have been arguing for exactly the same things from the UK Government all this time. The reality is that Scotland, Wales, Northern Ireland and the north of England have been dingied by this Chancellor until he was forced to lock down in England. I am glad that furlough and the self-employment support scheme has been extended to March, but we should be clear that that kind of support is not unique to the UK. Countries of all sizes have been supporting their people, and many of them have done it more competently and more generously than the UK. Can he confirm that the furlough scheme is not tied to any particular tier and it will be available to all who need it at 80%? Will he refrain from cutting it back to 60%, as before, because that cost many businesses and many employees dearly? Many businesses are as good as closed, especially in hospitality, tourism, travel, events and culture, and they need ongoing support.

I return to the issue of those excluded from the support schemes. It is disgraceful and unacceptable that there is still nothing in the statement for them after eight months. Can the Chancellor tell me why he is still choosing to ignore 3 million people across these islands? Many sectors of the economy in which they work are not going back to normal any time soon. I spoke to Scottish hospitality reps this morning and they are deeply worried about the winter months ahead. They are increasingly indebted, and 70,000 to 100,000 jobs are at risk. It would help them immensely if the VAT cuts that the Chancellor previously announced could be made permanent. I welcome the additional £2 billion for Scotland, because Scotland has been able to provide hospitality businesses with rates relief, but we need clarity on the future longer-term funding to plan ahead.

A growing number of businesses cannot afford to pay for redundancies should they go bust, so what provision is the Chancellor making for supporting those who may yet lose their jobs as businesses go to the wall? Will he extend the £20 uprating of universal credit into the year ahead as well? Will he expand it to legacy benefits, because those on legacy benefits are really struggling? Will he enhance statutory sick pay? Will he listen to Maternity Action and Pregnant Then Screwed on their demands for women to be kept safe and their incomes protected?

This has been a complete bùrach, but it does not need to be. Will the Chancellor work with all parties and the devolved institutions? At the very least, could he give the Cabinet Secretary for Finance in Scotland, Kate Forbes, the courtesy of a phone call?

[Rishi Sunak]

I am glad the hon. Lady welcomed the extension of job support through to next year. With regards to Scotland, it is clear, as even the First Minister has conceded, that the generous support currently available in Scotland is only possible and affordable because we have a Treasury that represents the whole of the United Kingdom. I can, of course, confirm that the coronavirus job retention scheme is a UK-wide scheme. We will continue to apply the furlough to each part of the UK equally, treating every citizen, no matter which region of the nation they live in, the same.

The hon. Lady also asked some specific questions and I am happy to provide her with the answers. Scotland will receive an upfront guarantee today worth £8 billion. That is an increase of £1 billion on the previously agreed upfront guarantee. That funding is for the Scottish Government to use as they see fit. The hon. Lady asked many questions about supporting businesses and people. It is, of course, up to the Scottish Government to make those choices on what to do with their extra £1 billion. We look forward to hearing what they plan to do with that additional funding. It is also worth bearing in mind, as we hear from the hon. Lady about the future Scottish Budget, that the Scottish Government have the ability to raise taxes. The Scottish Government have the ability to raise the funds they need to fund the various projects they would like to fund. If those things are important, then of course the Scottish Government will be able to make those decisions on behalf of their people and be held accountable for them.

[Dr Liam Fox (North Somerset) (Con)]

I thank my right hon. Friend for demonstrating the strength of the Union and showing that, with the best will in the world, the Scottish Government would not have the ability to have the resources to protect Scottish jobs in this way. Is it not now more important than ever that, across the whole of the United Kingdom, we stimulate wealth creation, creating new goods and services using the natural creativity and innovation of all the people of the United Kingdom? Can we look forward to my right hon. Friend using his considerable energy to bring forward proposals in this area based on sound, financially prudent Conservative principles?

[Rishi Sunak]

I thank my right hon. Friend for his comments and I absolutely agree. He knows better than most the power of the Union and has seen it demonstrated countless times over the years of his service. He is also right about the power of free enterprise to drive our recovery. I can give him every reassurance that those sound free enterprise principles will be at the heart of everything we do, and ensure that we have a swift and generous recovery that will benefit citizens wherever they live.

[Margaret Greenwood (Wirral West) (Lab) [V]]

The Chancellor’s U-turn on furlough comes after intense lobbying by the TUC, the CBI, Labour and leaders in the Liverpool city region. Can the Chancellor explain why workers in the north were expected to get by on 67% of their pre-crisis wages when tier 3 restrictions were put in place, but that that has now changed to 80% once areas in the south of the country are being locked down? Will he give a cast-iron guarantee to the people of Wirral West that workers in the north will never again be treated as second-class citizens?

[Rishi Sunak]

It is simply not the case that the wage support schemes we have put in place differentiate between people on the basis of where they live. All the schemes, whether the furlough scheme or the job support scheme, treat people equally wherever they live in every region or nation of the UK. To suggest otherwise is simply wrong and, quite frankly, a misrepresentation of what the hon. Lady knows to be the case. She mentions the TUC, and the TUC welcomes the introduction of the job support scheme, and I am grateful for its help in designing it.

[Harriett Baldwin (West Worcestershire) (Con)]

Last week, the IMF singled out for praise the UK’s economic response to the coronavirus, citing the timeliness, the speed of response, the generosity and the flexibility of the approach. The managing director said:

“We welcome the continuing efforts the government has made to refine its support measures”.

Does my right hon. Friend also agree with the second part of what the IMF said last week, which is that over the medium to long term, we do need to put the UK public finances back on a sustainable footing?

[Rishi Sunak]

My hon. Friend is absolutely right, and she will of course know this well from her own experience. We welcome the independent scrutiny of institutions such as the IMF—they are helpful in providing accountability for the Government in our economic response—and I am delighted that it was so positive about what we have done. She is also right that it said, correctly, that over the medium term, we must restore public finances to a sustainable position. Now is the time to provide fiscal support through a very weak period, but we want to build resilience for future crises so that when the next one of these comes along, we can respond in the same strong and generous way that we have been able to do this time.

[Alex Davies-Jones (Pontypridd) (Lab) [V]]

I am pleased to see the Chancellor finally in his place today, but for constituents of mine in Pontypridd and for everyone across Wales, his words are a case of too little, too late. I am aware that the UK Government have confirmed that devolved Administrations will receive Barnett consequentials in respect of new funding. However, I know from experience that people in Wales cannot and should not rely on yet another promise from this UK Government. The Chancellor will also be aware that this is not the first time funding has been promised to the people of Pontypridd. I would like to take this opportunity to remind him of the devastating flooding that decimated communities across Rhondda Cynon Taf earlier this year, and it would be most irresponsible of this Government and utterly unfair for people in Wales if they are left behind once again. This Government have already blocked the Welsh Government from using both the coronavirus job retention scheme and the job support scheme, and businesses in Wales are suffering now. Will the Chancellor therefore finally commit to fair funding for people in Wales, and will he agree to meet me and fellow MPs who represent Rhondda Cynon Taf to allow our constituents the best possible chance as we move through the coronavirus pandemic?

[Rishi Sunak]

I am glad that over 10,000 of the hon. Lady’s constituents have had their jobs supported by the furlough scheme the UK Government have provided. I am also glad that the Welsh Government will now have received £5 billion in up-front funding guarantees for Barnett—£600 million more as a result of announcements today—and I am sure she can talk to the Welsh Government about how they plan to use that money to support her constituents.

[Greg Smith (Buckingham) (Con)]

I warmly welcome my right hon. Friend’s statement on measures that will both protect jobs and livelihoods through this lockdown and give businesses, as they plan for 2021 and beyond, real hope and confidence that there are better days ahead. With that in mind, does he agree with me and the Bank of England, with its forecasts this morning showing that economic activity in the UK is being supported by our substantial fiscal and monetary policy action, and its assessment that the extended coronavirus job retention scheme will mitigate significantly the impact of weaker economic activity in the labour market?

[Rishi Sunak]

My hon. Friend is absolutely right. It is important for monetary and fiscal policy to be co-ordinated well, as he says, and I am glad that we are achieving that. It is also good to see the Bank of England recognising, as the IMF and the Office for Budget Responsibility have also highlighted, that our interventions in the labour market—our furlough scheme and other measures—have succeeded in suppressing the rise of unemployment. That will remain a single overriding goal: to keep people in work.

[Christine Jardine (Edinburgh West) (LD) [V]]

The Chancellor told us in his statement that people and businesses want to know what comes next and how long we plan to keep the scheme open and on what terms. He said that they want certainty. They certainly do, and that is why businesses and individuals in my constituency and across this country are so tired of this constant chop and change. Will the Chancellor admit that he has to extend the furlough scheme through to the summer, to June 2021, to give those businesses the certainty they need to plan?

[Rishi Sunak]

We have provided that certainty through to the end of the spring, at the same time as saying that we will review the scheme in January to ensure that it is operating well and at that point review the employer contribution. Combined with all the other interventions we have made, I think that that provides the medium-term certainty that businesses need to plan through the winter and beyond.

[Katherine Fletcher (South Ribble) (Con)]

I am pretty awed, to be honest, by the incredible scale of the support that this Government are putting in place for the people of South Ribble and beyond. We have a massive recovery to undertake in jobs and employment, and this is absolutely vital. There is 2 billion quid being invested in kickstart to create opportunities for people leaving education. Does my right hon. Friend agree that prioritising help for those young workers, such as those leaving Runshaw College in Leyland, is the right thing to do and a key part of how we are going to recover?

[Rishi Sunak]

My hon. Friend is absolutely right. It is young people who are most impacted economically by the crisis we are experiencing, and she is absolutely right that they should be at the heart of our thinking about the recovery. The kickstart scheme is at the centre of that, providing fully funded job placements for at-risk young people. Tens of thousands are starting their jobs in the coming days and weeks, and we look forward to those young people having a new springboard into a bright career in her constituency and elsewhere.

[Jim Shannon (Strangford) (DUP)]

I thank the Chancellor for what he has said today. The equality for all the United Kingdom of Great Britain and Northern Ireland is good news. Whether we are in Edinburgh, Cardiff, London or Belfast, we are treated equally. In relation to the Northern Ireland Assembly, which has been in a circuit breaker for the past two weeks, the Chancellor has said that the help will go right through until March, but should it be needed beyond that, it will be important to have that in place. Can the Chancellor specifically tell me what support will be given to businesses that have recently been set up but are excluded from the financial support schemes and are under extreme pressure for their very survival? It is good to hear that the United Kingdom of Great Britain and Northern Ireland is being treated equally, but it is also good to have something for those small companies that have just been set up.

[Rishi Sunak]

I can confirm that all our job schemes work on a UK-wide basis, treating everyone equally wherever they live, and that will continue always to be the case. I am also pleased to confirm today a £400 million increase in the up-front funding guarantee for Barnett consequentials for Northern Ireland, bringing the total to £2.8 billion, and I am sure that the Northern Ireland Executive can use that funding to support businesses in the way that the hon. Member describes.

[Robin Millar (Aberconwy) (Con)]

I thank my right hon. Friend for the support that we have received. In Aberconwy, 8,800 jobs have been protected through the job retention scheme. Across Wales, 82,000 self-employed people have also been supported. Indeed, across Scotland, Northern Ireland and the whole of Wales, there have been unprecedented levels of support through schemes, through Barnett consequentials and more throughout this pandemic. Will he confirm again that this House stands for the whole United Kingdom, that it is our shared markets and strong economy that make this level of support possible and that all parts of our Union will continue to receive the attention and support of our Government?

[Rishi Sunak]

My hon. Friend puts it incredibly well. This is a crisis that has engulfed our entire United Kingdom, and we will get through it together as one United Kingdom. This Government will continue to support businesses and people, wherever they live.

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab) [V]]

Although I am disappointed that there was no mention of those who have been excluded so far, I welcome much of what the Chancellor has said, particularly in relation to the devolved nations. However, when I asked just two weeks ago for greater flexibility for the Welsh Government to support jobs during their fire break, that support was not forthcoming. Greater Manchester and other parts of the north of England received a similar response. I ask the Chancellor whether he and the Government realise that pitting areas of the UK against each other serves only to damage the integrity of the United Kingdom, and I urge him to recognise the need for equity across the Union.

[Rishi Sunak]

There is equity across the Union. I thank the hon. Gentleman for welcoming the measures, but there is equity because everyone is treated exactly the same under these nationwide schemes. With regard to support in Wales, as I have said, £600 million more was announced today for the Welsh Government, bringing the total up to £5 billion of funding. Again, I am sure that the Welsh Government can use that money in the way that he suggests, which is to support businesses, if that is indeed what they want to do.

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

May I add my name to the long list of people who, once again, are thanking my right hon. Friend for his unprecedented support, which will be a great source of comfort to the residents of Stoke-on-Trent North, Kidsgrove and Talke? May I raise the fact that there is not just a financial incentive through the kickstart scheme for the under-25s, but a financial incentive now for the over-25s in the form of apprenticeships, which will be a huge boost to the jobs and economic recovery of Stoke-on-Trent and Staffordshire. Does he agree that this type of scheme is exactly the way forward and that employers should be taking it up to ensure that we can reskill and retrain a workforce, who, in Stoke-on-Trent, are sadly largely low-skilled and therefore stuck, in some cases, in low-wage jobs?

[Rishi Sunak]

My hon. Friend is absolutely right. For almost the first time, there is now a cash incentive for businesses to take on older apprentices, given the particular nature of the crisis that we face. I am glad that that will help to train and reskill people in his constituency. I hope that many of them will find their way to the world-beating ceramics industry that he champions so well, which I know will also be heartened by the extension of the furlough scheme today.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

The Chancellor is right that the strength of our Union comes when we are working together, yet the reality of the delay in announcing the extended support for Wales meant that jobs were lost when all the Welsh Government were doing was following the evidence. The Chancellor had said that it was a strength to act in an agile and fast-moving way, and that is exactly what they were doing. He also described the extended restrictions as “the only viable option”. Will he now do the right thing, in the interests of the Union, in the interests of fairness and in the interests of equity, and backdate the extended support to 23 October and allow those who lost their jobs potentially to be rehired and then furloughed?

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[Rishi Sunak]

I thank the hon. Gentleman for his comments. What I can tell him is that the new CJRS date for eligibility will be 30 October, which means that those who were notified to HMRC at any point up to that time will be eligible to be furloughed under the new scheme and, indeed, those who were let go before the announcement of the plans in September can also be rehired and put back on the scheme.

The details of that are in the guidance, which will be published imminently.

[Peter Gibson (Darlington) (Con) [V]]

I thank my right hon. Friend on behalf of the 1,900 self-employed people of Darlington who have benefited from the self-employed income scheme and who will welcome his announcement today, but may I urge him to ensure that this money gets out of the door as quickly as possible, particularly with Christmas just around the corner?

[Rishi Sunak]

I can give my hon. Friend that assurance. Those are three-month grants for the self-employed. The system will open in November so that grants can be paid in December, in time for Christmas, as he says. As he knows, that builds on our significant support for the self-employed. More than 3 million people are eligible for that support, which is now worth more than £14 billion. Today’s announcement will mean an additional £7 billion of support to those people over the Christmas period.

[Hannah Bardell (Livingston) (SNP) [V]]

My constituent Douglas McCarthy has been running the bespoke travel business Travelyard for many years and has seen his livelihood completely evaporate. Despite the fact that he has been bringing folk home and providing a vital service in the community, he feels that his industry has been virtually ignored by the UK Government and the insurance sector, which is failing to pay out on his business interruption insurance. In addition to the uncertainty over UK Government support, my constituent has had to fulfil full refunds out of his own pocket with very little support. Will the Chancellor, or someone from his team, meet my constituent and me to hear the specific concerns on what can be done to support him and travel agents like him?

[Rishi Sunak]

Travel agents’ businesses, coming under the retail category, will benefit from business grants in England, and that money has been Barnetted to Scotland, so the Scottish Government can choose to do something similar to support their travel agents. My hon. Friend the Economic Secretary has previously worked with the insurance industry and the Financial Conduct Authority to provide clarified and updated guidance on business interruption insurance.

[Ms Angela Eagle (Wallasey) (Lab)]

Will the Chancellor now admit that his premature wind-down of furlough, which he had scheduled to finish last weekend, in the middle of what many people expected to be a second wave, was actually a mistake? Will he admit that the virus does not conform to Treasury models or his own timetable for it to disappear? Will he continue to show flexibility? Will he confirm, for the avoidance of doubt, that if the current lockdown ends on 2 December, the furlough scheme will still be available to all those across the country, whatever tier of restrictions they are put back into?

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[Rishi Sunak]

I can give the hon. Lady that assurance. The CJRS has been extended to the end of March for all people in the United Kingdom, not dependent on the tiers. We will review in January whether it is appropriate at that point to ask employers to start making a contribution as the economy recovers. We will make that decision in January.

[Mr Peter Bone (Wellingborough) (Con) [V]]

I thank the Chancellor for coming to the House again to update us on the current situation, and congratulate him on the enormous amount of help that has been given to the British people throughout this pandemic, but could he tell us how the country is going to pay for that support?

[Rishi Sunak]

My hon. Friend asks an excellent question. In the short term, we are paying for this through extensive borrowing. He will see that this year our debt-to-GDP will rise to roughly 100%. We are also carrying a significant ongoing borrowing requirement, as is evident in the forecasts that have been seen. That is not a sustainable situation, so as we continue to recover and grow, we will have to make sure that we reduce our structural deficit over time, in line with the recommendations from the IMF, to stabilise it. In the first instance, that will come through growth, but we also need to make sure that our public finances are balanced appropriately so that we can pass a strong economy on to the next generation.

[Caroline Lucas (Brighton, Pavilion) (Green) [V]]

In reply to a question I asked the Chancellor back in September, he said that those excluded from the self-employed scheme earned more than £50,000 and were in the top 5% of all earners. I would like him to admit today that that is not a fair picture of those who have been left out. Millions have been excluded who are not and never have been in the top 5% of all earners. Will he explain why he has deliberately left out so many people again when announcing this latest version of the self-employed scheme, and will he today finally commit to delivering justice for the self-employed?

[Rishi Sunak]

The hon. Lady talks about justice. We have spent over £14 billion to protect and support the self-employed, over 3 million of whom have been eligible for support. That is more substantial, comprehensive and generous than essentially any other country anywhere in the world. Today we have announced that that support is being increased in generosity and lasting longer, with an additional £7 billion, potentially, being paid out in December. I stand by what I said. One of the criteria for qualifying for the self-employment grant was that earnings were less than £50,000. Because we have less information about the self-employed, it was right to target that support at those who need it most. Of all the people who are majority self-employed, 95% earn under £50,000, and the average income of those over the £50,000 limit is about £200,000. I think that is a reasonable and fair way to make sure that we help the most needy in our society.

[Scott Benton (Blackpool South) (Con)]

I commend the Chancellor on his statement. The incredible £200 billion-worth of support this Government have already provided has protected thousands of jobs in Blackpool South, and I know that those businesses will warmly welcome the extension of the furlough scheme through to March. However, the reliance of coastal communities such as my own on tourism in the years ahead will present particular challenges, so will he meet me and my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) to discuss that, in order to make sure that we continue to keep this Government’s core ambition of levelling up on track in coastal communities?

[Rishi Sunak]

My hon. Friend is a fantastic champion for his local area and his local small businesses. I know how important tourism and hospitality is to his local economy. He will know that I am also a champion of that industry, and I would be delighted to meet him and other colleagues.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab) [V]]

Only a week ago, the Government told West Yorkshire to go into tier 3, with pub and bar staff in my constituency told that their jobs were being completely stopped—it was to be the same for them as under national lockdown. When we asked the Government to give them the full furlough scheme because their jobs were being stopped, the Chancellor said no. The facts show that when the jobs being stopped by covid restrictions were just in the north, he decided that they were worth only 67% and he treated them as second class. We need a guarantee that he will not do the same again. We have heard his defensive explanation that he got all the decisions right all along the way up to now, so can he explain why one week ago jobs being stopped in my constituency were worth 13% less?

[Rishi Sunak]

I say to the right hon. Lady, as I have said before, that all the interventions we have made apply on a UK-wide basis; they treat people the same, equally and fairly, wherever they happen to live. That was the case, is the case and always will be the case, and I can give her that assurance.

[Theresa Villiers (Chipping Barnet) (Con)]

Like others, I am hugely grateful for this massive programme of support for jobs and livelihoods, which is helping so many people, including in my constituency, but it will all have to be paid for in the end, so will the Chancellor set out a plan to deal with the deficit and return the public finances to a sustainable footing for future generations?

[Rishi Sunak]

My right hon. Friend is right, and there will be a time when it is appropriate to do exactly as she suggests. Given the uncertainty at the moment, particularly with the economic forecasts, it is difficult to do that with precision and I think it would be inappropriate. However, in a few weeks’ time we will have an updated set of forecasts from the Office for Budget Responsibility. They will illustrate the future direction of the deficit and the public finances, which will give us a sense of the task ahead of us and allow us to have a conversation about how, over time, to return the public finances to the sustainable position to which she rightly says they should be returned.

[Kate Hollern (Blackburn) (Lab) [V]]

Businesses in Blackburn have been under additional restrictions since July and entered tier 3 almost three weeks ago. Despite agreeing to give Lancashire local authorities £30 million in business support, which is equivalent to about £20 per head, the Government are yet to provide a penny. Now that the country is going into lockdown, other areas are entitled to the same amount of support. It does not seem fair that businesses in Lancashire, Greater Manchester, South Yorkshire and Liverpool are entitled to the same amount as areas that were not under additional restrictions. Will the Chancellor explain the formula used to calculate the £20 per head business support grant, how long this funding is supposed to last and whether areas that were previously in tier 3, or may be returned to tier 3 after the current lockdown, can expect adjustments in the level of grant to reflect the greater economic impact that they are experiencing?

[Rishi Sunak]

I am pleased to tell the hon. Lady that the business grants schemes that were outlined—up to £3,000 a month for closed businesses and 70% of that for open businesses—have been backdated for those areas that were experiencing heightened restrictions for some weeks and months before the tiering system was introduced. That funding will be backdated, and I believe it will be paid in cash to local authorities next week, with the allocations given this week.

[Steve Double (St Austell and Newquay) (Con)]

May I again thank the Chancellor for his willingness to be flexible to respond to the changing needs of our economy during this crisis, and for the grants that will be made available to businesses that are forced to close? He will know that there will be many businesses in supply chains that will not be forced to close but whose revenues will be affected. Will he confirm that the money available to local authorities—I believe more than £5 million is coming to Cornwall Council—is specifically to support such businesses, and that local authorities will be able to use their discretion to apply those funds specifically to meet the needs of the local economy?

[Rishi Sunak]

My hon. Friend is right that, in aggregate, the sum is more than £1 billion for the country with Barnett funding for the devolved Administrations. That can be used at the discretion of local authorities to support their local businesses and local economy over the winter period in a way that they see meets their exact circumstances.

[John Nicolson (Ochil and South Perthshire) (SNP) [V]]

We welcome the news that the Chancellor will keep the £20 universal credit uplift beyond next April, but is he aware that that will still leave people seeking work £1,000 per year worse off than they were 10 years ago?

[Rishi Sunak]

I am not sure that I entirely understood the question. The uplift in universal credit is temporary, but it is in place until next spring. More generally, to protect the most vulnerable in our society, I point the hon. Gentleman to the data released over the summer that shows that the suite of Government interventions means that the incomes of the lowest income households have been protected the most. That is a compassionate Conservative Government looking after everyone in our society.

[Jason McCartney (Colne Valley) (Con)]

May I thank the Chancellor for extending the furlough scheme to March and for the cash grants for hospitality and other businesses that have had to close across my constituency? Will he continue to look at what support he can give to freelancers, including musicians, and company directors? Will he consider a beer duty cut to support my local microbreweries?

--- Later in debate ---

[Rishi Sunak]

I know my hon. Friend is a champion for his local brewing industry. The future of tax policy will be for Budgets. With regard to the self-employed, many of the people he mentioned will benefit from the increased generosity and timeliness of the self-employment support grants that we have announced today and before. They will be paid out before the end of the year up to the value of £7,500 per person.

[David Linden (Glasgow East) (SNP)]

The livelihoods of many self-employed Glasgow taxi drivers have been devastated in recent months. I note on page 9 of the Chancellor’s statement that he says that the income support grant for self-employed people will go through until January. Why will it not go through until March, in line with the furlough scheme?

[Rishi Sunak]

It will; the grant will be there for a second one. It has already been announced that there will be a fourth grant payable in the spring. The exact value of that will be determined in January at the same time as we decide on the future furlough employer contribution, because those things generally align with each other. There will be a fourth grant, as has already been confirmed.

[Ellie Reeves (Lewisham West and Penge) (Lab)]

I welcome the extension of the furlough scheme, but the Government have had since March to fix the gaps in the CJRS and the self-employment income support scheme, which have excluded more than 3 million individuals from support. That has caused huge damage to businesses and families. As we enter the second lockdown, the Chancellor could still amend that and fix the gaps that have been outlined extensively in this House. Will he commit to doing that? What is his message today to those 3 million excluded? What support will they be getting?

[Rishi Sunak]

The hon. Lady refers to gaps, but as I have explained in previous answers, some of those are deliberate policy decisions to target support on those who need it most, which is the right and principled thing to do. I have also said clearly that, when it comes to the self-employed, I appreciate we have not been able to help everyone in exactly the way that they would have liked, but I hope that across the suite of different things we have done, whether business rates holidays, tax deferrals, bounce back loans, improvements to our welfare system or the housing allowance, there is something that can benefit the vast majority of the British people.

[Sir David Evennett (Bexleyheath and Crayford) (Con) [V]]

I welcome the statement that my right hon. Friend has made today and all that he has done to help businesses during this pandemic. Does he agree that today’s increase of the third self-employed grant from 55% to 80%, on top of the £13.7 billion of support already provided, means that the package of support for the self-employed is one of the most comprehensive anywhere in the world? I believe that the self-employed in my constituency of Bexleyheath and Crayford will welcome the further assistance that my right hon. Friend has announced today.

[Rishi Sunak]

I thank my right hon. Friend for his comments. He is absolutely right: we should be very proud that we have been able to step in and support more than 3 million of those who are self-employed with comprehensive and generous support. That was the case at the beginning of this crisis and will remain the case all the way through to next year.

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

This morning, I received a phone call from my constituent, Hannah, who has a stall on the Lancaster charter market, which is an outdoor market. She and her business partner Hettie have been trading for just over a year and this is the second time that their business has had to close in that short period. She would like to ask the Chancellor whether traders who trade on outdoor markets should be considered differently from other traders, in order that such small, independent businesses might have a chance to thrive.

[Rishi Sunak]

What I say to Hannah and Hettie is that if they are registered for business rates themselves, they will be eligible directly for one of the business grants of up to £3,000 for every month that they are closed. We found that many traders in covered markets were not registered for business rates, which is why previously we provided discretionary funding to local councils specifically to deal with such examples as the hon. Lady has raised, so I hope that, if Hannah and Hettie are not registered for business rates, the local council followed the guidance and was able to provide them with support. We are now providing £1 billion of discretionary support to local councils, so I hope that the council can provide support to the hon. Lady’s constituents.

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

This is a welcome package from my right hon. Friend, particularly in relation to the self-employed, but I hope we will look again at some of the detail of the exclusions and definitions in the self-employed scheme—things like the definition of trading profits and other matters that exclude some people.

Will my right hon. Friend also look at the position of the private and corporate events sector? Currently, businesses in the sector fall into a gap because they have not qualified for business rate relief because they sell food not directly to the public but through their clients, and they have not qualified for VAT relief on similar grounds. Such businesses are a critical part of the sector, worth many millions of pounds to the economy and employing some 600,000 people. Will my right hon. Friend look at what specific help they can be given?

[Rishi Sunak]

I am always happy to hear suggestions from my hon. Friend, particularly on improvements to technical language or drafting and guidance. If he has some suggestions, I look forward to receiving them soon.

[Stephen Flynn (Aberdeen South) (SNP) [V]]

In March, fewer than 8,000 people in Aberdeen were in receipt of universal credit; by September, the number had more than doubled to over 17,000 people. The Chancellor has made one spectacular U-turn today, so will he make another? Will he confirm that he will provide the funding necessary to maintain the £20-per-week universal credit uplift beyond the spring?

[Rishi Sunak]

Obviously, the Scottish Government are due to outline a budget at some point soon and, in respect of future tax and welfare policy, if that is something that the hon. Gentleman and the Scottish Government want to do, I am sure they have every tool and lever at their disposal to do exactly that.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con) [V]]

I thank my right hon. Friend for all that he has done during this challenging time to support jobs and businesses. As he will know, this is Tomorrow’s Engineers Week. As the former engineering envoy, I am keen to see our vital engineering sector continue to thrive and prosper, so will my right hon. Friend tell the House what steps are being taken to ensure that the engineering sector has full access to and participates in the excellent kickstart scheme, to bring on the talent of the future?

[Rishi Sunak]

My hon. Friend is a fantastic champion for the engineering sector, which he cares deeply about and has spoken to me about previously. He is right: it is important that we train the engineers of tomorrow, and what better time than Tomorrow’s Engineers Week? I would be happy to talk to him and any organisations that he wants to connect me with to make sure that the sector fully benefits from the opportunities we are providing for companies to take on bright new people and provide them with a better future.

[Tonia Antoniazzi (Gower) (Lab)]

This is a simple question to the Chancellor: why does he dress up on social media the financial support—which, as he stated today, has been given equally and fairly, wherever people live—saying that the Welsh should be grateful for what is equally and fairly theirs to receive?

[Rishi Sunak]

As I have said before, this is a United Kingdom approach. We have universal schemes that benefit people equally wherever they live. On top of that, for those things that are devolved—that we do solely in England—I have announced today extra funding of hundreds of millions of pounds, with £5 billion in total for the Welsh Government, which can be used as they wish to support their constituents. I look forward to seeing how they plan to spend that money.

[Dr Kieran Mullan (Crewe and Nantwich) (Con)]

My constituents understand the enormous challenges that the Government face, and that we cannot save every single job, but does my right hon. Friend share my pride that the IMF has said that our response to covid is

“one of the best examples of coordinated action globally”,

and that it specifically praised our response for

“holding down unemployment”?

[Rishi Sunak]

My hon. Friend is absolutely right. At the heart of our approach throughout this crisis has been the protection of people’s livelihoods. We have strived at every turn to make sure that people can stay in work and their incomes are supported. As we go through this crisis, I assure every Member of the House, and the country, that that remains my overriding priority. We will throw absolutely everything we can at it.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

In contrast to some of the churlish comments from colleagues north of the border, I thank my right hon. Friend for listening and acting and demonstrating yet again, as the Government have throughout this crisis, that this UK Government—this one nation Conservative Government—act for and support people around this country, no matter in what region or nation they reside.

[Rishi Sunak]

A fitting place to end, I think. My hon. Friend is absolutely right. It is a demonstration of the strength of the Union, and an undeniable truth of this crisis, that we have been able to provide this level of economic support because we are one United Kingdom.

[Mr Deputy Speaker (Mr Nigel Evans)]

I thank the Chancellor for his statement today, and for responding to 38 questions in just over one hour. We are now suspending for three minutes.

Covid-19: Economy Update

Rishi Sunak Excerpts

Thursday 22nd October 2020 Commons Chamber

[The Chancellor of the Exchequer (Rishi Sunak)]

Let me speak first to the people of Liverpool, Lancashire, South Yorkshire and Greater Manchester, and other areas moving into or already living under heightened health restrictions. I understand your frustration. People need to know that this is not forever; these are temporary restrictions to help control the spread of the virus. There are difficult days and weeks ahead, but we will get through this together. People are not on their own. We have an economic plan that will protect the jobs and livelihoods of the British people, wherever they live and whatever their situation. Just as we have throughout this crisis, we will listen and respond to people’s concerns as the situation demands.

I make no apology for responding to changing circumstances, so today we go further. The Prime Minister was right to outline a balanced approach to tackling coronavirus, taking the difficult decisions to save lives and keep the R rate down while doing everything in our power to protect the jobs and livelihoods of the British people. The evidence is clear: a regional, tiered approach is the right way to control the spread of the virus. My right hon. Friend the Chief Secretary to the Treasury yesterday set out for the House our economic support for businesses that are legally required to close. We are providing: billions of pounds of support for local authorities and a grant scheme for affected businesses, worth up to half a billion pounds every month. Of course, we also expanded the job support scheme, with the Government covering the cost of paying two thirds of people’s normal wages if their employer had been legally required to close. For areas in local alert level 3, we have made available over £1 billion of generous up-front grants, so that local authorities can support businesses, protect jobs and aid economic recovery in a fair and transparent way. That is our plan to support closed businesses.

But it is clear that even businesses that can stay open are facing profound economic uncertainty. This morning I met business and union representatives, including those from the hospitality industry, to discuss the new restrictions. Their message was clear. The impact of the health restrictions on their businesses is worse than they hoped. They recognise the importance of the tiered restrictions in controlling the spread of the virus, but a significant fall in consumer demand is causing profound economic harm to their industry. It is clear that they and other open but struggling businesses require further support, so I am taking three further steps today.

First, I am introducing a new grant scheme for businesses impacted by tier 2 restrictions, even if they are not legally closed. We will fund local authorities to provide businesses in their area with direct cash grants. It will be up to local authorities to decide how best to distribute the grants, giving them the necessary flexibility to respond to local economic circumstances, but I am providing enough funding to give every business premises in the hospitality, leisure and accommodation sectors a direct grant worth up to £2,100 for every month for which tier 2 restrictions apply. That is equivalent to 70% of the value of the grants available for closed businesses in tier 3. Crucially, I am pleased to confirm that these grants will be retrospective; businesses in any area that has been under enhanced restrictions can backdate their grants to August.

I have been listening to and engaging with colleagues around the House, including—but not only—my hon. Friends the Members for Heywood and Middleton (Chris Clarkson), for Hyndburn (Sara Britcliffe), for Penistone and Stocksbridge (Miriam Cates), for South Ribble (Katherine Fletcher), for Burnley (Antony Higginbotham), for Keighley (Robbie Moore), for Cheadle (Mary Robinson), for Leigh (James Grundy) and for Southport (Damien Moore), and I am pleased to confirm that the backdating of the new grants means that we are being more generous to the businesses and places that have been under higher restrictions for longer. Let no one say that this Government are not committed to supporting the people and businesses in every region and nation of the United Kingdom.

Secondly, to protect jobs we are making the job support scheme more generous for employers. If businesses are legally required to close, as we have already outlined, the Government will cover the full cost of employers paying two thirds of people’s salary where they cannot work for a week or more. For businesses that can open, it is now clear that the impact of restrictions on them is more significant than they had hoped, particularly for those in the hospitality sector. I am therefore making two changes to the short-time work scheme to make it easier for those businesses to keep staff on, rather than make them redundant: first, under the original scheme, employees had to work for 33% of their normal hours, whereas now we will ask them to work only 20% of those hours; and secondly, the employer contribution for the hours not worked will not be 33% as originally planned, or even 20% as it is in the October furlough scheme, but will reduce to 5%.

The scheme will apply to eligible businesses in all alert levels, so that businesses that are not closed, but which face higher restrictions in places such as Liverpool, Lancashire, South Yorkshire, and Greater Manchester, as well as the devolved nations, will be able to access greater support. These changes mean more employers can access the scheme and more jobs will be protected. We have made this one of the most generous versions of a short-time work scheme anywhere in the world. It is better for businesses, better for jobs and better for the economy.

Thirdly, as we increase the contribution we are making towards employees’ wages, I am increasing our contribution to the incomes of the self-employed as well. Today we are doubling the next round of self-employed income support from 20% to 40% of people’s incomes, increasing the maximum grant to £3,750. So far through this crisis, we have provided more than £13 billion of support to self-employed workers. Sole traders, small businesses and self-employed people are the dynamic entrepreneurial heart of our economy, and this Government are on their side.

In conclusion, a wage subsidy for closed businesses, a wage subsidy for open businesses, cash grants of over £2,000 a month for tier 2 businesses and up to £3,000 a month for closed businesses, support for local authorities, support for the self-employed, support for people’s jobs and incomes, all on top of over £200 billion of support since March. This is our plan—a plan for jobs, for businesses, for the regions, for the economy, for the country. A plan to support the British people. I commend this statement to the House.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

For months, we have urged the Chancellor to get ahead of the looming unemployment crisis and act to save jobs. Instead we have had a patchwork of poor ideas rushed out at the last minute: a bonus scheme that will pay £2.6 billion to businesses that do not need it; a job support scheme that simply was not going to work for the majority of businesses under pressure and that we said at the beginning did not do enough to incentivise employers to keep staff on; and an approach to support for areas entering tier 3 that has been nothing short of shambolic.

This has had real consequences. The deadline for large-scale redundancies came and went before the Chancellor announced the job support scheme, the deadline for small business redundancies passed before he realised that he needed to amend it, and many parts of our country have spent months under tier 2 restrictions without adequate support. How many jobs have been lost because of that inaction? Over a million have already gone. In the last quarter, we saw a record rise in redundancies. The Chancellor could have done much more if he had acted sooner.

Now we see yet another last-minute move. Let me ask the Chancellor. What has changed that means that this is the right thing to do now but it was not when parts of the north and midlands entered tier 2 many weeks ago? Does he agree with his own Mayor for the west midlands who said that

“this particular point was just one that was completely missed”.

Completely missed was the need for support for tier 2 areas. The Chancellor has only caught up and listened to the anxiety of workers and businesses when it looks like these restrictions will be affecting London and the west midlands. Will he apologise to those who have already lost their jobs and seen their businesses slip through their fingers in those areas that have not had that support until now?

The Chancellor referred to £1 billion of generous up-front grants for businesses and jobs provided in a “fair and transparent way”. There has not been a system of up-front grants for those in the north and midlands, and the process has not been fair and transparent for businesses and workers. To be honest, it is nothing short of insulting to describe what we have seen over the past few weeks as fair and transparent. The Government still have not published the formula that has been used for business support in tier 3 areas, and they still seem addicted to the approach where they say they are in negotiations with different areas but the reality is something completely different. When will he come clean about that support and the formula that is being used?

Will the Chancellor also make good on his Government’s claim that the JSS extension will be topped up to at least 80% for workers facing hardship? I know this is difficult for the Government. I see that the Prime Minister is sitting next to the Chancellor; he thought it would be topped up for everyone to 93%. I think that is what he said. Clearly the Government are not very sure on this, so maybe I can spell it out for them. That support does not amount to 80% for huge numbers of workers facing hardship—for example, those who have modest savings or who are excluded for other reasons, as so many are—and they have to wait five weeks anyway before they get that help. That could be fixed speedily by the Government, but they are refusing to do so. Does the Chancellor also recognise that those fixes for social security must apply to the self-employed, for whom an increase to just 40% of their previous income will not stave off hardship—and that is not to mention those who have been excluded throughout.

This is becoming like a long-running television show: the winter economy plan, series 3. But the twist is that it did not last the winter, it did not do enough to help the economy and it was not a plan. We have to get ahead of this crisis instead of always running to keep up. That is why Labour has called for a national circuit breaker to give us a chance to reset and to fix the broken test, trace and isolate system, but time is running out to implement that circuit breaker so that it includes half term and maximises the opportunity it brings. Will the Chancellor change course?

[Rishi Sunak]

This is the third time I have come to this House in several weeks to outline additional support for the economy, jobs and livelihoods. It is a sign of the seriousness of the economic situation we face, and I will never make any apology for acting fast as the moment demands and as the health situation evolves. But at the heart of this debate is a more fundamental difference on the right approach for protecting livelihoods and lives. We on this side of the House believe it is right to be honest about the hard choices we confront and about the fact that there is no easy cost-free answer. With every restriction comes difficulty, and that is why we are doing everything we can to strike that balance between saving lives and protecting livelihoods.

We have made progress, and that is why we are now able to operate a localised, tiered approach. That is why, even now, in the most affected areas we are striving to keep businesses open, and that is why the support I have announced today is as generous as it is, to give as many businesses and employers as possible the opportunity to keep working and keep trading. All this progress and all this hope are being put at risk by Labour Members’ repeated calls for a damaging, blunt, national lockdown. They will not say for how long, but they have already admitted that it would roll on with no clear end in sight. They will not say how many jobs would be lost through such a national lockdown. They claim that their approach—an indefinite series of national on-off lockdowns—would be better for the economy. I am afraid the facts simply do not support that conclusion.

The policies we have outlined today strike that balance. They support our approach—a localised, regional approach that is striving to get that balance between protecting jobs and protecting livelihoods. They will support people in every region and nation of this United Kingdom. They will protect people’s jobs. They will support their incomes and provide their families with security and with hope for the future.

Throughout this crisis, I have always stood ready to work with all hon. Members in every business group, industry group and trade union to work through solutions and deal with this crisis. While the situation evolves and the challenges change, my approach will not—to build consensus, to reach out to those with different views, to work past tribal political point scoring and to support our country through this moment of immense challenge so that we come out on the other side a stronger, more United Kingdom.

[Mel Stride (Central Devon) (Con) [V]]

I welcome my right hon. Friend’s statement. Once again, he has listened to businesses. When it comes to lockdowns—I have to say that I agree with the remarks he has just made about circuit breakers—may I draw his attention to the minutes of the Scientific Advisory Group for Emergencies meeting on 21 September, which state:

“Policy makers will need to consider analysis of economic impacts and the associated harms alongside this epidemiological assessment. This work is underway under the auspices of the Chief Economist.”?

Will my right hon. Friend update the House on the progress that has been made by the chief economist? Does my right hon. Friend agree that, to ensure a balanced public debate, the chief economist or a similar economic expert should join the epidemiologists for No. 10 covid press briefings?

[Rishi Sunak]

My right hon. Friend is absolutely right. The Opposition referenced the SAGE minutes but seemed to forget about that part of them, which rightly struck a balance between protecting jobs and protecting lives. He can rest assured that the Government will always do that. I may spare the chief economist the pleasure of attending the press conferences, but my right hon. Friend is right to say that that analysis is taking place. I have presented some of it at the press conferences, and I am happy to talk more about it at the Dispatch Box.

Fundamentally, my right hon. Friend knows, as I do, that our economy faces enormous strain. Almost three quarters of a million people have already lost their jobs, and, sadly, more will. That is why a regional, targeted approach is the right one. It allows us both to protect lives and to protect livelihoods.

[Alison Thewliss (Glasgow Central) (SNP) [V]]

This is the third statement from the Chancellor in the space of a month, but that is not a sign of good management; it is a sign of panic and chaos from this Government. None of this should be coming as a surprise to them. It is telling that the Government have put out more under embargo today than they gave out to the Opposition spokespeople—a sign of real disrespect to the other parties in this House.

We in the Opposition have called for more certainty and a plan, because the evidence is that we are not coming out of this coronavirus crisis any time soon. The Chancellor has not listened or responded, so I ask again for three things. I ask him to listen and to act; to extend furlough and the self-employment income support scheme at the rates from earlier in the year to protect jobs and livelihoods; and to fill the gaps and help those who are excluded completely from his support schemes. He knows that that is a problem, and he is choosing to ignore it.

I ask the Chancellor to keep the £20 uplift to universal credit and extend it to legacy benefits, including for those who have disabilities. Two thirds of the minimum wage is not enough to live on, and not everybody is entitled to universal credit. Huge gaps remain: carers, asylum seekers, those with disabilities and those with no recourse to public funds have all been left behind by this Government, with a cold, long winter ahead.

Significant sectors such as culture and the arts, hospitality, food and drink wholesalers, tourism, transport and aviation, and many more are not going back to normal any time soon, and they deserve Government support. Will the Chancellor align his support scheme with the Scottish Government’s public health proposals and those of the other devolved institutions?

UK Government support for Scotland does not go far enough to mitigate the local lockdowns that we have faced. The UK Government must now provide clarity on the Barnett consequentials to help us to plan and protect businesses and our people. The Scottish Government need this now—today—not in three months’ time, not eventually and not at some point in the future. We need it now, and the Chancellor should give clarity on it today so that the Scottish Government can act.

The Chancellor’s scheme has been full of holes. Time and time again, he comes here in a knee-jerk reaction, full of panic, rather than planning ahead for a situation that we told him would arise. This is nowhere near “whatever it takes”. I ask him to go further today, and to work with all the Opposition parties and the devolved institutions to get this right.

[Rishi Sunak]

When we outlined the original job support scheme, it was actually very warmly welcomed not only by various business groups, including the CBI, the Federation of Small Businesses and the chambers of commerce, but by the trade unions, because everyone at that moment recognised that it was a significant and generous intervention to protect the jobs and livelihoods of the British people. But the situation has changed. The health restrictions are having an impact, particularly in the hospitality sector, which the hon. Member for Oxford East (Anneliese Dodds) mentioned. That is why we have taken the steps that we have today. We are providing the certainty that she asked for, as this scheme will last for at least six months through to next spring. There is certainty over that. The grants we have outlined today will work on a monthly basis for as long as businesses are either in tier 2 restrictions or are closed under tier 3. Businesses can plan on that basis.

With regard to the Barnett consequentials, the Government will always ensure that people will benefit from this support wherever they are living in the United Kingdom. That is why we have provided an up-front guarantee to devolved nations worth £14 billion, which will help them also to plan at what is, I understand, a difficult time for everyone.

[Robert Largan (High Peak) (Con)]

I am really pleased that the Chancellor has listened and shown that this Government will always support the north. I am delighted that these tier 2 retrospective measures, such as the expansion of the job support scheme and the business grants, will make a massive difference to people living in Glossopdale in my constituency who have been under tier 2. On the business grants, may I urge the Chancellor to make certain that the money and the guidance on how that money can be used is made available to councils as soon as possible so that the businesses who need it can get it urgently and help to save jobs?

[Rishi Sunak]

My hon. Friend has been right to champion the situation for his local businesses. I know that they will warmly welcome this. I can give him the assurance that we will work as quickly as possible to provide the guidance. As I said, the grant value will be calculated on the number of hospitality, leisure and accommodation business premises, scaled by their rateable value. Added to that will be a 5% discretionary top-up, and then the local authority can use its discretion to allocate the money as it sees fit for its local area.

[Ms Angela Eagle (Wallasey) (Lab)]

It seems the Chancellor’s much-vaunted winter economic plan has not even lasted the autumn. His tinkering with the system demonstrates that he has been behind the curve all along, and it has sowed hardship and confusion. Why is the support he offered in March not being replicated as the virus comes back and we are suffering a second wave in October? Why is he trying to achieve local lockdowns on the cheap?

[Rishi Sunak]

I would not consider that providing £200 billion of total support could ever be accused of doing anything on the cheap. That money has gone to support public services like the NHS, and people’s jobs, livelihoods and businesses. I commit to this House that we will continue to do everything that is required, and continue to adapt and evolve as the circumstances demand.

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

I thank my right hon. Friend for bringing forward this package, for listening and for acting in the interests of the economy. Is it not essential that we align the interests of business and the economy with the interests of controlling the virus, rather than let those become polar opposites in argument with each other? Can we perhaps draw back from some of the partisanship that has soured relations over the past few days, because that does not do any good for public confidence in how we are all tackling this very difficult and wearing crisis?

[Rishi Sunak]

Those are wise words from my hon. Friend. He is right to highlight the importance, in this House and elsewhere, of our adopting a constructive and collegiate approach to tackling what is clearly a national crisis, and one that we will get through. We will get through it by working together and emerging stronger on the other side.

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

From tomorrow, Wales will begin a 17-day firebreak lockdown to help to control the spread of the virus. During that period, there will be two support schemes from the Treasury as one ends and another one starts. The First Minister of Wales has asked the Chancellor to allow Welsh businesses to access the job support scheme a week early. He has refused, so a further request has been made to ease the rules on furlough for one week to allow people to get that support. We need to ensure that bureaucracy is reduced to allow Welsh businesses to protect jobs, so will the Chancellor be flexible, and what support, specifically, will he give to Welsh businesses?

[Rishi Sunak]

We have tried to reduce the bureaucracy by making sure that we do not have overlapping schemes at the same time. That would only increase complexity for businesses. We have endeavoured in all ways to provide support on a UK-wide basis, as I have said in conversations with the First Minister and others. We are doing this on a UK-wide basis in the knowledge that devolved nations are making individual decisions that ultimately the UK Government and UK taxpayer will be funding. That situation will work only if people can work in a constructive and aligned spirit, which is what I have said to all, and I very much hope that that can be continued in the coming months.

[Mr Andrew Mitchell (Sutton Coldfield) (Con)]

I greatly welcome my right hon. Friend’s statement. The measures he has announced are significant and generous, delivered in a manner that is fast becoming this Chancellor’s hallmark. May I thank him for hearing the powerful arguments advanced by the west midlands Mayor, Andy Street, especially in respect of the hospitality industry, and for addressing the serious business jeopardy that did lie between tiers 2 and 3?

[Rishi Sunak]

My right hon. Friend is right that the Mayor, Andy Street, has been vocal, and rightly so, in highlighting the particular impact of the tier 2 restrictions on the hospitality industry. That helped inform our decision to act today, with speed and scale, to provide support to those businesses, which will be warmly welcomed in his area.

[Patrick Grady (Glasgow North) (SNP)]

I wonder if the Chancellor regrets ruling out of hand the SNP’s calls in the spring for a universal basic income. Will he calculate what impact a minimum income guarantee like that would have had for employers, employees and the self-employed alike, and what the overall cost would be, compared with the billions he is finding for all these myriad schemes? Will he calculate the long-term costs of millions more on universal credit and other social security benefits, with the consequences of that on the economy and society?

[Rishi Sunak]

The Government do not agree with the universal basic income. It would not be right to provide money to millions of people who have absolutely no need of it; that would just detract our resources, which are targeted on those in most need, as has been our approach throughout the crisis.

With regard to universal credit and welfare, the Government believe that the best way to help people is to provide them with work and opportunity. That is why all our efforts are targeted on providing that support to protect as many jobs as possible while recognising that we cannot protect every single job. That is why we have also strengthened our safety net, with billions invested in universal credit and local housing allowance and, crucially, funding provided for new opportunities through training and apprenticeships to help people find fresh opportunity and a brighter future.

[Scott Benton (Blackpool South) (Con)]

Although I welcome the Chancellor’s statement, the imposition of tier 3 restrictions in Lancashire will inevitably mean that many of my constituents will be significantly worse off. While the additional funding for Lancashire, including the £42 million package, is welcome, there will still be far too many businesses who cannot access the Chancellor’s direct support. Hundreds of hotels in my constituency stand to lose thousands in lost bookings, but, because they have not been mandated to close, they will not be entitled to the additional support packages. Will he take steps to ensure that businesses such as small hotels, which are completely unviable under tier 3 restrictions, can access grants and the extended job support scheme?

--- Later in debate ---

[Rishi Sunak]

I am happy to tell my hon. Friend that the money provided to Lancashire, as it entered tier 3, for overall business support can be used precisely to help the businesses he rightly mentions that are being affected by the restrictions, even though they are open. That funding is there for the county council and other local authorities to do that. The enhanced generosity of the job support scheme I have announced will go a long way to helping those businesses as well, making it easy and affordable for them to get the wage support they need from the Government to protect as many jobs as possible.

[Christine Jardine (Edinburgh West) (LD)]

While I appreciate yet another partial U-turn from the Chancellor, what the country needs now more than anything is leadership, clarity and confidence that the Government are in control rather than this constant reaction and a patchwork with every hallmark of having been written on the back of a cigarette packet that we are getting from this Government. I plead with the Chancellor to consider going the whole way and keep the job retention scheme going after the end of October, let the devolved nations know what consequentials they will have—they need to plan as well—and give the country what he promised. He said he would do whatever it takes; this is not it.

[Rishi Sunak]

The hon. Lady asks for an extension of the job retention scheme. It is worth drawing her attention to the fact that the employer contribution to the job retention scheme in October is 20%, whereas under the new, more generous, job support scheme it has been reduced to 5%. That is more generous and will protect more jobs and more people’s livelihoods.

[Jim Shannon (Strangford) (DUP)]

I welcome the Chancellor’s commitment to helping the whole United Kingdom of Great Britain and Northern Ireland; we much value the money that has come forward. May I speak for the distribution sector, which daily delivers perishable foods not only to care homes, the NHS and schools, but to pubs, cafés and restaurants that are closed in tier 2 and 3 locations? The costs for distribution remain the same for jobs, vehicles and businesses. What help can those in the distribution sector access as a result of the Chancellor’s announcement?

[Rishi Sunak]

The hon. Gentleman makes an important point about the supply chains of those who serve the hospitality industry. I draw his attention to two things. The tier 2 grant programme that I announced today will contain a 5% discretionary top-up, which local authorities can use at their own discretion to support local businesses; they may choose to use some of it to address the needs that he outlines. Also, we have not targeted the enhanced generosity of the job support scheme purely at the hospitality industry, or indeed purely at businesses operating in tier 2 areas, because we recognise the complexity of the supply chains that he mentions. The very generous job support scheme will be available for all businesses in all parts of the country, regardless of sector, which I think will make an enormous difference to the businesses that he mentions.

[Matt Vickers (Stockton South) (Con)]

They say that good things come in small packages. Well, my right hon. Friend might be small, but he has delivered a huge package of job-saving, business-boosting support that will benefit the people of Stockton South and people right across the country. I thank the myth, the man, the legend who is my right hon. Friend for this life-saving support for businesses in my patch. Will he continue to review and react promptly to the ever-changing situation in his characteristically charismatic way?

[Rishi Sunak]

I am very grateful for my hon. Friend’s kind—I think—compliments; he knows that he is a large part of the reason why I am in this House, so he can take as much of the credit or blame for that as is required. I can give him the reassurance that he seeks. I have been delighted to visit his local businesses with him, and I know that he is an enormous champion for his local community, high streets and businesses. He works very hard on their behalf, and I know that the measures that we have announced today will make a difference to him and make sure that his community continues to be a thriving place.

[Navendu Mishra (Stockport) (Lab)]

Alan Gent runs the Petersgate Tap in my constituency. He employs five members of staff and the impact of the pandemic was already choking his business. He is not currently paying business rates, but his private landlord has rejected his request for a rent holiday, and now that Stockport is in tier 3, he cannot stay open. The support currently offered is woefully inadequate. Will the Chancellor now commit to addressing the real hardship of those who work in Stockport’s pubs, bars and hospitality sector?

[Rishi Sunak]

I have every sympathy with the hon. Gentleman’s constituent—I know what a difficult time it must be for him and his team and for those in similar industries—but actually I think that the support provided already will help him. The pub will be eligible for a business rate cash grant of up to £3,000 per month that he remains closed under tier 3 restrictions; across the UK, it will vary by place, but that should largely cover the vast majority of small and medium-sized pubs’ rental bills for that time. Of course, the five team members that the hon. Gentleman mentions could be put on the expanded job support scheme at essentially no cost to the employer. Those employees’ wages will be protected and covered by the Government.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

I congratulate my right hon. Friend on his statement and thank him for all he is doing. Harrogate and Knaresborough is at the medium level, tier 1, but areas surrounding it are in the higher tier 2 category. Businesses have noted that with concern and are worried about what might happen should the position change and our tier be increased. The enhanced package will therefore be welcomed; I welcome it strongly. Does my right hon. Friend agree that the reduction in employer costs will result in more jobs being saved?

[Rishi Sunak]

As ever, I thank my hon. Friend for his thoughtful comments. He is right. That is why we took the decision to make this a universal approach, with enhanced generosity, to deal with the situation he mentioned of businesses operating in proximity to other areas under restrictions—those supply chains. This is a universal, generous approach, designed, as he said, with a lower employer contribution, to make sure that we can protect and support as many jobs as possible.

[Kerry McCarthy (Bristol East) (Lab)]

Back in March, the Chancellor said that those in the exhibition sector with physical properties and business rates would be eligible for the cash grant, but when they approached their local councils they found out that that was not true and that, because they did not open their premises to the public, they were not eligible. Exhibition companies in my constituency have received minimal support and are really struggling, and it looks like conferences and mass events will not go ahead until a vaccine is in place. It might not offer a photo opportunity like being a waiter at Wagamama, but may I urge the Chancellor to meet exhibition companies, including those in my constituency, and hear how much they are suffering?

[Rishi Sunak]

The hon. Lady might make disparaging comments about photo opportunities at Wagamama, but that was precisely because that sector employs 2 million people who are disproportionately lower paid, from ethnic minorities, younger and women. It is right that we focus our support on those in the hospitality sector, because they are particularly impacted by the restrictions.

The hon. Lady is right to highlight the plight of those in the events and exhibition industry. I am very sympathetic to that. Those businesses with business premises will receive business rates relief if they are in those categories. Indeed, the categories for the tier 2 grants that we have announced today will include hospitality, leisure and accommodation, under the Valuation Office Agency codes. Exhibition and events spaces are typically included in that, so they will be included in the calculation of the grant value provided to local authorities.

[Andrew Griffith (Arundel and South Downs) (Con)]

Business leaders I speak to, both in Arundel and South Downs and nationally, recognise that tailoring our response to the circumstances is a strength, not a weakness. They also know that there are no easy choices, but the worst of all worlds would be a blunt national circuit break, which would cost rather than save jobs.

[Rishi Sunak]

My hon. Friend is absolutely right on his last point. We are lucky to benefit from the considerable business experience that he brings to this place. He is right that, in business as in public policy, it is right that we evolve and adapt to the circumstances. That is what we have done today, but it is right that we do it in a targeted, tiered way, not with the blunt national instrument that, as he rightly says, would unnecessarily cause hardship and cost jobs.

[Alex Norris (Nottingham North) (Lab/Co-op)]

I understand that at half-past 4 today a Government Minister will meet local leaders in Nottingham to put us into the third tier. We had to find that out through the media, because local Members of Parliament have not been invited, which is saddening. If measures need to be taken to protect the health and wellbeing of our community, we will of course support them, but they will have a profound impact on our local economy. If Nottingham moves into tier 3 this afternoon, what package of support will the Chancellor put in place to protect our jobs and businesses?

[Rishi Sunak]

I know that it is a difficult time for the hon. Gentleman’s constituents, and he is right that they should engage constructively. I am glad that he and his local area are doing that. There will be a variety of support available. Closed businesses will receive grants of up to £3,000 a month, paid centrally. Obviously, similar to other areas, there will be a negotiation and a conversation with the Secretary of State for Housing, Communities and Local Government, which will result in an amount of support being provided for businesses. Of course, as the hon. Gentleman will know, there is also a formula to provide the local authority with support of up to £8 per head, and that money is used to enhance local compliance enforcement and contact tracing. I know that those conversations are ongoing and I very much hope that they will have a constructive outcome.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con) [V]]

I warmly welcome my right hon. Friend’s statement and thank him for supporting people and businesses across Essex. Already more than 15,000 people have benefited from the furlough scheme, and more than 5,000 from the self-employment income support scheme. These additional measures to support those who have been adversely affected by the recent introduction of tier 2 in Essex are welcome. Will he confirm that he will continue to do whatever it takes to support our country and our economy?

[Rishi Sunak]

I can give my hon. Friend that assurance. He mentioned some numbers, and that is ultimately what it is about. We stand in this place and talk about many billions of pounds and policy, but often it is about the people and the jobs and livelihoods that we are trying to protect. I am delighted to hear that the 20,000 people he mentioned have benefited from the support that this Government have put in place, and I can give him and them the assurance that we will continue to do exactly that.

[Ben Lake (Ceredigion) (PC)]

As Wales enters a firebreak lockdown tomorrow evening, there are concerns that there will be a week-long gap in support between the end of the furlough scheme and the introduction of the new wage support scheme. It would be good if the Chancellor could consider giving Welsh businesses early access to that scheme. May I ask him to clarify the eligibility criteria, in particular whether seasonal workers will be eligible for support?

[Rishi Sunak]

There will not be any gap in support, I am pleased to tell the hon. Gentleman, because, as he knows, the CJRS runs all the way to the end of this month and the job support scheme starts on 1 November. There will be complete coverage and no interruption. We provided Barnett funding on the grants from the moment I announced them, so that is also available to the Welsh Government. With regard to the specific treatment of seasonal workers and the computation of the reference earnings, that is set out in the guidance for the CJRS and that will remain consistent in the new job support scheme.

[Richard Fuller (North East Bedfordshire) (Con)]

In his statement on 8 July, my right hon. Friend said his measures would be always

“unencumbered by dogma”

and

“driven always by the simple desire to do what is right.”—[Official Report, 8 July 2020; Vol. 678, c. 937.]

He was right then and he is right today in announcing these measures. I noted the extension in support for the self-employed, which will now extend all the way through to April. Will my right hon. Friend assure me that he is also working with the Health Secretary to ensure that we are doing whatever we can to get self-employed people and everyone else into work and back to work without restrictions as quickly as possible?

[Rishi Sunak]

My hon. Friend is absolutely right. The self-employed are a part of the entrepreneurial side of our economy that will help to drive our recovery. It is right that they receive support and I am proud that the support we have put in place—over £13 billion benefiting almost 3 million people—is one of the most comprehensive and generous packages of support for the self-employed. Ultimately, however, his last point is the one we should focus on. The best way to help people is to allow them to get on and do the job they love doing, and allow them to trade.

[Chris Bryant (Rhondda) (Lab)]

I am not going to quibble; I think all of this is good and I am delighted that it is being announced today. However, I just want to say to the Chancellor that some of the measures he has announced apply across the whole of the UK and some apply only in England. That provides a lot of confusion for a lot of ordinary people out in the country who do not watch what we are doing in here every day and do not follow every element of the minutiae. Will he clarify precisely how much of the money he is announcing today is really new money to be spent in England through local authorities on the new business grants in tier 2 areas? How much extra money—I do not want to know about the earlier £14 billion for the devolved nations—because of Barnett consequentials is now coming to Wales?

[Rishi Sunak]

I thank the hon. Gentleman for his comments. He is right and I can appreciate the confusion. We try to do things on a UK-wide level, but obviously not everything will be on that level. I cannot give him a precise figure, because these are demand-led schemes. What we have tried to do is provide upfront funding guarantees in advance of that demand being drawn down in England and the Barnett consequentials being delivered. We true those up on a regular basis—I am happy to write to him with further details—but we try to provide the funding to Wales, Scotland and Northern Ireland in advance of that demand actually occurring in England. I think that is a better and more generous approach for the devolved nations.

[Laura Trott (Sevenoaks) (Con)]

I welcome the Chancellor’s statement. Keeping a link to viable jobs is absolutely crucial, so does my right hon. Friend agree that it is better to keep businesses open and functioning where possible with support, rather than locking down nationally, multiple times?

[Rishi Sunak]

My hon. Friend is absolutely right. When I talk to both businesses and employees, they say that what they want is to be able to go to the jobs they love. They want to be able to do that. They want to be able to serve customers and they want to be able to welcome us all back to their restaurants, pubs, cafés and so on. She is right that we have to strike that balance. I think the approach that the Government have taken does that—it strikes that balance. The support we have put in place today will enable as many of those people to remain in their job working hard and hopefully have a fulfilling future to come.

[Deidre Brock (Edinburgh North and Leith) (SNP) [V]]

It is good to see the Chancellor has found the magic money tree of Tory myth and given it another shake, but the money needs to go to the self-employed, the smallest businesses and the poorest households. He will have total control of VAT soon. Will he look at cutting tax on household essentials? Will he target the support for job retention schemes at the smallest businesses, so they can continue to employ people, rather than offsetting the wage bill of some supermarkets? Tesco, Sainsbury’s and Waitrose are not feeling the pinch the way that small enterprises are feeling it. Will he send the cash where it will do the most good?

[Rishi Sunak]

The hon. Lady is right in saying that support should now be targeted at where it can make the most difference. That is why our approach has evolved through this crisis, and what was universal at the beginning and at the peak of the crisis has now evolved into a more targeted approach. To give one example, a difference between the job support scheme and the old furlough scheme is that now large businesses—precisely the kinds of businesses she mentioned—will not be able to access the job support scheme, especially with its new, more generous terms, unless that business is seeing revenue decline. That sensible change means that support is rightly targeted at smaller and medium-sized businesses that need our help at this difficult time, and not at the large businesses that are not seeing any change to their business model.

[Mr Speaker]

Let us head to Ludlow and Philip Dunne. There is no sound, so I call Naz Shah.

[Naz Shah (Bradford West) (Lab)]

I do not need to tell the Chancellor about the way we are going, with the economy plunging further into a crisis. The biggest thing that businesses in my constituency tell me is that uncertainty is their biggest enemy. We have now been under extra restrictions for more than 150 days. If we go into tier 3, and given that the Chancellor does not want a planned circuit breaker, what support will he give to businesses in my constituency of Bradford West? Importantly, how long should they be prepared for uncertainty?

[Rishi Sunak]

I am pleased to tell the hon. Lady that the tier 2 grants that I announced today will be backdated, so that her businesses and local authority will receive funding that is backdated to when they entered tier 2 restrictions. I think those grants worth up to £2,000 over a month will be of enormous support to businesses in her constituency, at what I appreciate is a difficult time.

[James Wild (North West Norfolk) (Con)]

Although Norfolk remains in tier 1, the additional support for hospitality, tourism and other businesses is welcome. As well as the short-term measures in this plan for jobs, looking longer term, will my right hon. Friend bring forward proposals in the spending review for tourism zones, including one for Norfolk and Suffolk? Will he accelerate the roll-out of gigabit broadband for businesses in North West Norfolk, so that they benefit sooner from greater connectivity?

[Rishi Sunak]

My hon. Friend regularly reminds us all about the importance of digital connectivity in rural areas such as his, and indeed mine, and he will know, as I do, that the Government are committed to bringing both gigabit-capable broadband and mobile phone networks to all the parts of our country that otherwise might not have as strong connectivity as they would like. I know he will join me in welcoming that, as it will make an enormous difference to the local economy in his and other rural areas.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab) [V]]

Twenty-three OECD countries had job subsidy schemes in place for a major event such as a pandemic, but unfortunately, the UK was not one of them. The Government’s piecemeal approach to the pandemic is leading many of my constituents to ask why we were so poorly prepared for it in every single way. In Oldham East and Saddleworth, unemployment has nearly doubled since March. We know now that across the country nearly 300,000 people were not eligible for social security support. A third of those people were disabled and one in 10 were from the north-west. How many low-income workers covered by this new financial package will be excluded from social security support to top up their wages?

[Rishi Sunak]

The hon. Lady is right to say that we did not have a wage support scheme when we entered this crisis, which is why I place on record my thanks to the fantastic team of officials at the Treasury and at HMRC for acting with unbelievable speed and decisiveness in helping me to create, design, and implement these schemes in record time, enabling us to help pay the wages and protect the jobs of more than 9 million people.

[Dr Luke Evans (Bosworth) (Con)]

Last night I had a meeting with the Hinckley business improvement district and met businesses that raised concerns about what would happen should they go into tier 2. At the time I told them that the Chancellor and the Treasury were listening, and I am pleased to welcome the support for businesses in tier 2, should my area move into that. In the spirit of listening, will the Chancellor consider providing a road map for businesses that are struggling the most, such as those running weddings, events and conferences and those in the travel industry, to try to provide some clarity and certainty going forward?

[Rishi Sunak]

I am grateful to my hon. Friend for raising this. He has raised with me the impact on businesses in his area of a potential move into tier 2, and I hope he will be reassured by the announcements today. Travel and events are interlinked. As he and I know, we must work to find a way to allow more travel to happen. The Transport Secretary has spoken to colleagues about that. He is actively engaged in working with industry and health professionals to see what more we can do to facilitate greater ease of travel, and therefore open up travel corridors and help our events industry.

[Stephen Farry (North Down) (Alliance) [V]]

It is important that the public health and economic support measures move in harmony. Northern Ireland had to go into tighter restrictions on 16 October, ahead of other parts of the UK. The 20% employer contribution in the outgoing job retention scheme is a major challenge for employers to keep jobs. Given that the Chancellor has shown some flexibility today, will he reconsider the timescale of the new scheme and backdate the 5% employer contribution to 16 October?

[Rishi Sunak]

Given that the grants are backdated, if that results in extra Barnett consequentials, of course that extra funding will flow to Northern Ireland, as it will to other devolved nations. With regard to the job support scheme, as I said, there will be no interruption of coverage between one scheme and the other. As the hon. Gentleman points out, the employer contribution will be significantly reduced on 1 November.

[Dehenna Davison (Bishop Auckland) (Con)]

I am incredibly grateful to my right hon. Friend and the whole Treasury team for their work, and I would especially like to thank my hon. Friend the Member for East Surrey (Claire Coutinho) for her engagement on this matter. I am already receiving messages from my constituents to say that they are delighted with these schemes. Bishop Auckland landlords will be helped out by this. I just have one question: how quickly can we expect these grants to hit businesses? I know that County Durham did an exceptional job of getting them out last time, but if he could provide a timeline, I would be grateful.

[Rishi Sunak]

I know that my hon. Friend is a proud champion of all her local pubs, judging by all her Instagram photos—I am very jealous. Having visited many of them with her during the campaign, I am glad that she is providing them with the support that they need at this difficult time. I know that these grants will make a difference. I can reassure her that we will work very quickly to get the guidance out. The funding will be available on a monthly basis; a month after the restrictions start, the funding will be there for those businesses.

[Martyn Day (Linlithgow and East Falkirk) (SNP) [V]]

The Chancellor has announced the latest package of covid measures, and we clearly face a further protracted period of the crisis, with more and more areas going into local restrictions. Given the regional packages announced for England, will the Chancellor tell us exactly what the Barnett consequentials will be, as devolved nations need to plan properly for their own mitigation measures?

[Rishi Sunak]

I refer the hon. Gentleman to my answer to the hon. Member for Rhondda (Chris Bryant). We have taken the approach of providing up-front funding guarantees to devolved nations, worth £14 billion currently, and we will update and review those regularly. In all ways, dealing with these demand-led schemes is difficult, which is why we have taken this approach, which is generous and better at providing up-front funding to devolved nations.

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

The Chancellor’s measures will be welcomed by the hospitality sector in London, although I hope he might have a word with the Health Secretary about the point of a 10 pm curfew if it is members of a family dining together. Will he look carefully at support for the events sector? As he knows, that sector supports not only private events but many large corporate events. We have a great number of those of the highest quality in London. There are thousands of jobs and millions of pounds of turnover involved here, but because these businesses do not serve food directly to the public from their production kitchens, they have not so far been able to benefit from the business rate relief scheme. Can we look at those loopholes that they have been falling through?

[Rishi Sunak]

I thank my hon. Friend for his comments. Where the guidance is not clear on businesses that are legally required not to open but not legally closed and therefore do not benefit from some support, we are actively looking at that and ensuring that we can fix it. Events and exhibitions are one of the VOA categories that will be included in the hospitality and leisure calculation that we use for the tier 2 grants I have announced today. More generally, the best thing we can do is try to open up more travel and, as time progresses and we can do more testing, to get life back into that sector by allowing it to get on with what it wants to do, which is to put on a fantastic events.

[Nick Smith (Blaenau Gwent) (Lab)]

In March, the Government increased the basic allowances for both universal credit and working tax credit by £20 a week, but that uplift is only temporary; it will expire next April. Does the Chancellor accept that, after what we all expect to be a tough winter ahead, that will mean taking nearly £1,000 a year away from those families who really need it?

[Rishi Sunak]

We did put in place the temporary uplift of universal credit  but, as the hon. Gentleman says, it still has five or six months to run; it will be in place to support vulnerable families throughout the difficult winter period and is there all the way until next spring.

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

I welcome the measures announced today. As the Chancellor will be aware, 15,400 people have benefited from the furlough scheme in South West Hertfordshire, and I applaud the sustainable and affordable approach he has adopted. Does he agree that the approach needs to remain pragmatic, with an evolution of policy, to give more certainty to our communities?

[Rishi Sunak]

My hon. Friend is absolutely right. In the face of something we have never seen before—we are all grappling with how to deal with it—it is right that we remain pragmatic and flexible; it is not right to be wedded to dogma and be unwilling to change when the facts change. We will always do that, as we grapple with the health crisis and the economic crisis. We will remain flexible and nimble, but always with the same values and principles underlying what we do, which is to try to protect as many people’s jobs and livelihoods as we can.

[Kirsten Oswald (East Renfrewshire) (SNP) [V]]

The UK Government wax lyrical about a flexible labour market as a strength of the UK economy, but the Chancellor’s support packages have excluded millions and so many will continue to be excluded from support. So will he again look at provisions for the millions who still fall through the holes in his schemes? If he will not do the right thing by these excluded groups, will he please release the resources to devolved Administrations to allow them to do so?

[Rishi Sunak]

Our support for the self-employed remains among the most comprehensive and generous anywhere in the world, and is now approximating almost £13 billion for almost 3 million people. Barnett consequentials of more than £13 billion or £14 billion have been provided to the devolved nations and, if the Scottish Government choose to do something different with that, that is of course up to them.

[Stephanie Peacock (Barnsley East) (Lab)]

In the past six months, the number of people forced to claim unemployment benefit in Barnsley has doubled. If the Chancellor is saying that livelihoods have to be balanced against lives, should the people of Barnsley expect unemployment to rise, the death rate to rise, or both?

[Rishi Sunak]

It is exactly because we need to adopt a balanced approach that we have taken the more regional and tiered approach that we have. We never pretended there are easy choices here—it would be wrong to say otherwise. We are balancing protecting the economy and protecting people’s jobs and livelihoods while suppressing the virus, in the least damaging way possible. There is no perfect answer. As I said, there are no easy choices. But we will always be honest about that and try to tread that careful path between those two things. What would be more damaging for people’s jobs and livelihoods is a blunt national lockdown, which would inflict unnecessary hardship and suffering on people where the virus is not particularly rampant.

[Lucy Allan (Telford) (Con)]

Throughout this crisis, the Chancellor has shown himself to be adaptable, nimble, flexible, dextrous and agile—perhaps it is down to the Peloton bike or a yoga exercise. I do not know what it is down to, but those are critical skills, essential for success in any endeavour. I thank him from the bottom of my heart for the measures he has announced today, which will benefit my constituents, who have struggled so much to keep their livelihoods afloat. I am truly grateful to him. Does he agree that the sledgehammer blunt instrument of a circuit breaker or fire break—call it what you like, but that type of lockdown—would be devastating to our communities and our economy? Will he do everything he can to ensure that that does not happen?

[Rishi Sunak]

My hon. Friend is absolutely right, and I thank her for her warm words. She knows, as someone who is a huge champion of small businesses in her area, repeatedly bringing their concerns to this Chamber, how damaging it would be to inflict unnecessary pain and suffering on those businesses and those people’s jobs and livelihoods. That is why the Prime Minister’s and this Government’s approach of a regional, tiered strategy is absolutely the right one.

[Tony Lloyd (Rochdale) (Lab) [V]]

The Chancellor will recognise that, although the tier system is only a few weeks old, Greater Manchester has been de facto in tier 2 for three months, before moving into tier 3 this week. The Chancellor told the House, in reply to my hon. Friend the Member for Bradford West (Naz Shah), that these grants will now be retrospective. Can he be absolutely clear: will the grants for Greater Manchester go back to the beginning of our period of de facto tier 2 and not simply to when the Government introduced the more formal, legalistic tier 2?

[Rishi Sunak]

Yes, I can, and I hope I did, provide that reassurance. For all areas that have been suffering essentially de facto restrictions, as the hon. Gentleman said, we will backdate the grants through to the beginning of August as required, and that will benefit many local businesses in Greater Manchester. I am grateful for the representations I had on this matter from many colleagues around the House, including many of those I mentioned in my statement.

[Mr Speaker]

Let us head up to Yorkshire with Julian Sturdy.

--- Later in debate ---

[Neil Gray (Airdrie and Shotts) (SNP) [V]]

It has taken weeks for the Chancellor to tinker with his job support scheme to get it to a better place, as if he was surprised by the impact that the necessary public health restrictions would have; it really prompts the question why he did not just keep furlough. But the big question today is why he did not do anything about making the universal credit £20 per week lifeline permanent and extending it to legacy benefits, which would have disproportionately benefited disabled people at this difficult time.

[Rishi Sunak]

Maybe the hon. Gentleman knew something that the TUC and every other business group did not when they warmly welcomed the introduction of the job support scheme, but I am grateful to have his thoughts. He might also want to have a word with his colleague the hon. Member for Edinburgh North and Leith (Deidre Brock), who said that it was wrong to give support to large businesses that were benefiting from this crisis. That is exactly why it would be wrong to extend the furlough scheme. The job support scheme is more targeted in its approach, makes sure that those types of businesses are not able to access support and, as I have mentioned, is more generous to employers than the October furlough scheme.

[Huw Merriman (Bexhill and Battle) (Con)]

I warmly welcome the Chancellor’s statement and thank him and his colleagues, and indeed the Department, for everything they are doing. It would take the most churlish of people to claim that this is anything but flexible, nimble and massive support for business. I recognise that, in making the job support scheme more generous, the Chancellor is now providing support for businesses that are open, and that is absolutely welcome. What steps are being taken in respect of those businesses that are open and perhaps do not need as much support—or, indeed, there could be fraudulent claims—to protect the taxpayer?

--- Later in debate ---

[Rishi Sunak]

My hon. Friend is absolutely right, and that is why we have evolved our approach. Whereas earlier in this crisis, when we were facing something that was happening with enormous speed and severity, we erred on the side of being more universal in our approach and acting quickly, obviously, as time has progressed, we can be more targeted—more effective—to root out misuse of these schemes and make sure that support is targeted where it is most needed. As I said, one example of that is all the various new eligibility criteria for the job support scheme, ensuring that large businesses that are not suffering a revenue decline will not be able to access the scheme. There are also conditions around redundancy notices and the ability of large companies to make capital distributions while using the scheme. All those are sensible changes that go to the heart of what my hon. Friend said: we should target our support on those who really need it.

[Mr Speaker]

Let us return to Yorkshire with Julian Sturdy. I think he has got his voice back.

[Julian Sturdy [V]]

Thank you, Mr Speaker—take two. I thank my right hon. Friend for listening to the concerns that have been raised by York’s tourism and hospitality sector and announcing an extensive package of support for areas such as York that have been left in limbo under the tier 2 restrictions. However, does he agree that the best way to support York’s wider economy is to get us back to tier 1 as swiftly as possible? Can he assure me that the support announced today will not be used to justify prolonging additional restrictions for longer than is necessary?

[Rishi Sunak]

My hon. Friend is absolutely right: the best way to help businesses and protect people’s jobs is to allow businesses to trade and allow the economy to function as normally as possible. The support we have put in place today will not be used as an excuse not to do that, and as the Prime Minister said, we will be reviewing all these restrictions on a 28-day basis. Of course, we all want to see our local areas get back to as much of normality as they can, as quickly as possible.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

One hundred and nine coach companies have gone bust, with 7,100 people made redundant, which is one sixth of the entire coach industry. Coach companies tell me that one reason for that is that they fall between gaps in support, being classified as neither tourism nor essential travel. Please will the Chancellor look urgently into what specific support can be given to the coach industry? Will the relevant Minister meet me and representatives of the sector to discuss their concerns?

[Rishi Sunak]

I am happy to organise for a relevant Minister to meet the hon. Lady. I hope that those companies—she is right about the difficult time they are experiencing—will have been able to access, for example, the bounce back loans or the coronavirus business interruption loans to help them with cash flow, and ditto with the VAT deferral and time to pay. But I appreciate that it is a difficult time for them, and the best thing we can do is allow more economic activity so they can get their coaches full as quickly as possible.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I warmly welcome this package of support. Nevertheless, as the Chancellor has acknowledged, this will be a difficult winter for some businesses. When we move into what I hope will be a spring recovery, we will see the reintroduction of the full rates of VAT and business rates. Would my right hon. Friend consider phasing in the reintroduction of those at slightly lower levels to allow businesses to get back on their feet in these very important sectors?

[Rishi Sunak]

As ever, I am grateful for my hon. Friend’s advice and support. He is right: the business rates holiday we have put in place this year has provided over £10 billion of support to almost 1 million businesses. I know what a vital lifeline it is, so of course we keep all measures under review. Future fiscal policy is for Budgets, but I thank him for raising the point with me.

[Richard Burgon (Leeds East) (Lab) [V]]

When I previously asked the Chancellor about furloughed workers having to survive on less than the minimum wage, his callous response was that they would be “able to work elsewhere”, yet minimum wage workers in very high virus areas whose workplaces have been forced to shut will now have to live off just two thirds of the minimum wage. That is just £5.81 per hour—the minimum wage level of 11 years ago. Will the Chancellor introduce a wage floor so no such worker has to live off less than the minimum wage?

[Rishi Sunak]

We have addressed this point before, but I am happy to repeat it. Very low-paid workers will benefit from the flexibility and responsiveness of universal credit, and that is where the universal credit taper works. The way it works is that it will replace the falls in income with a top-up in universal credit worth about 63p in the pound. For example, a single person in their late 20s, working in hospitality and renting privately in a flat in a northern city, will receive about 92% of their original income on an after tax and after benefits basis.

[Gareth Davies (Grantham and Stamford) (Con)]

I too warmly welcome the Chancellor’s statement today. Does he agree with me that it is vital and absolutely right that we take this decisive action to support businesses and jobs today, but it is also important that we are mindful of the sustainability of public finances for tomorrow?

[Rishi Sunak]

My hon. Friend is absolutely right. He will have seen the figures from this week detailing the difficult situation of our public finances, with the scale of the borrowing and the scale of the increase in our debt this year. While right now our primary focus should be on supporting jobs and employment, given the restrictions in place, it is always right that we have one eye on the future. We must be careful not to mortgage our children’s futures, and that is why our interventions will be done in a way that is sustainable and affordable for the long term to ensure that we live within our means over time.

[Andrew Gwynne (Denton and Reddish) (Lab) [V]]

I was critical of the Chancellor on Tuesday, so I want to thank him for listening and acting on one of the key asks of all Greater Manchester MPs, of all the council leaders in our city region and, yes, of our Mayor, Andy Burnham, too. It was that our businesses and supply chains should be supported in tier 2, because we have had 12 weeks of these measures with no help and no support, and many really are struggling as we tip into a stricter tier 3. For some it will be too late, but I thank him for making this retrospective. How soon will these funds be released, because it is pressing, and what calculation has he made of the 12-week entitlement for Greater Manchester businesses?

[Rishi Sunak]

I am grateful to the hon. Gentleman for his comments. I would tell him that we will work very quickly with the Valuation Office Agency to calculate the value of those grants; we are just working through that detail. I hope to be able to provide him and all Manchester MPs with the figures as soon as possible, and we will of course release that funding as quickly as we have calculated the values.

[Saqib Bhatti (Meriden) (Con)]

On behalf of my constituents, may I thank the Chancellor for this comprehensive economic package? Clearly, he is a Chancellor who listens and I thank him for that. Will he join me in commending Andy Street, the Mayor of the West Midlands, who has campaigned passionately for further support? He is not a showboater; he just gets on with the job and gets things done.

[Rishi Sunak]

My hon. Friend is absolutely right. I am always grateful to hear from Mayor Andy Street. Andy has rightly put on the agenda the situation for businesses, especially hospitality businesses, in tier 2 areas, which my hon. Friend represents, and wanted me to be aware of what was happening. I am glad that today’s set of measures will make a difference to both my hon. Friend and Andy’s wider set of businesses and, I know, to many other businesses across the country.

[Bill Esterson (Sefton Central) (Lab) [V]]

The Chancellor says that he will support only viable businesses. Kim runs a wedding photography business. She is self-employed and works from home and, like millions of people, she has not qualified for any of the measures that the Chancellor has announced. Weddings will need photographers again, and Kim already has 71 bookings for next year. Why is the Chancellor’s message to Kim, and millions like her, that he thinks her business is not viable?

[Rishi Sunak]

If the hon. Member wants to write to me with Kim’s particular circumstances, I would be happy to see what various things we have done that may be of benefit to her and her business.

[Tom Hunt (Ipswich) (Con)]

I welcome this statement. It will ensure that the hospitality sector, even in those areas with much greater restrictions than my own, can hopefully keep going and come through this, as opposed to the approach of the Labour party, which would hammer the hospitality sector, even in areas such as mine, in Ipswich, where we currently have very low levels of covid. It will also give some reassurance to my constituents that, if the worst comes to the worst and cases increase, there is that additional support in place. One thing that these grants could be used on is winter heaters and gazebos, because we can still socialise outside in the winter months. I just wondered what the Chancellor’s thoughts were on that.

[Rishi Sunak]

That is an interesting idea. Obviously, for areas in tier 3, the local authorities are receiving funding to use at their discretion. It may well be that that is an idea they want to take up. Of course, for both open and closed businesses in tiers 2 or 3, I have announced a series of grants today and it will be up to those businesses to use them on whatever they want. Primarily, we assume that they will use them to cover the fixed costs of things such as rent, but, of course, it will be up to them what they use them for. None the less, my hon. Friend makes a good suggestion, which, together with our planning changes, means that those businesses can serve as many customers as possible, even though they face restrictions at the moment.

[Felicity Buchan (Kensington) (Con)]

I warmly welcome the additional support for tier 2 areas, such as my constituency in London. Does my right hon. Friend agree that we need to get London back into tier 1 as soon as possible as London is the engine of this country’s economy, accounting for 25% of all tax revenue?

[Rishi Sunak]

My hon. Friend is a rightly proud champion of her businesses in central London. Obviously, what is happening not just to our capital city but to all our city centres is incredibly sad. We all want to see them springing back to life and vibrancy. Hopefully, the measures that we have announced today will provide some support and breathing space to help them get through a difficult period until they can get back on their feet and do exactly what we want them to do, which is return to where they were—bustling and welcoming us all back into their shops and restaurants.

[Stella Creasy (Walthamstow) (Lab/Co-op) [V]]

The Chancellor says that he has been talking to the people who are worried about their livelihoods and the businesses facing redundancy, so he will know that those redundancies are falling particularly heavily on mums. We know from the data produced by the Office for National Statistics last month that 79% of the increase in redundancies has come from women, and we know that it is mums who are losing their jobs, but his Department is sitting on £1.7 billion of unspent tax-free childcare funding. Will he use that money to ensure that our childcare sector can support every parent who wants to get back to work and to stop the tsunami of unemployment that we are about to face?

[Rishi Sunak]

The hon. Lady is right to highlight the particular importance of good-quality childcare, which, as she said, enables mums to be able to protect their employment. I am happy to look at the specific suggestion that she mentioned, but I think that we have recently made—in the previous Budget and before—some changes to the operation of tax-free childcare, so that it is more available to more people. She is right that the take-up has not been what was forecast, which is why we put the changes in place to broaden the approach and broaden the eligibility for it, but I am happy to look at her specific suggestion.

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

I thank my right hon. Friend for the provisions announced today, which I very much welcome. My constituency is partly in tier 1 and partly in tier 2, and I especially welcome the support for tier 2 areas, but also across the board into tier 1. Many constituents who work in the wedding and events sector, or across its supply chains, have contacted me with difficulties due to restrictions, uncertainty and a drop in trade. Can my right hon. Friend confirm that today’s announcement will also support the events sector and, crucially, those working across its supply chain?

[Rishi Sunak]

It is precisely because we took a generous and universal approach to eligibility for the job support scheme, with its new generosity, that supply chains of all affected industries will be able to benefit. There were some calls that it should only be targeted at those in tier 2 areas, or, for example, only those in hospitality. We have taken the decision to ensure that the new job support scheme, with its new generosity, is available to all employers and all employees wherever they are in the UK. I think that will be of benefit to the industries and businesses that my hon. Friend mentioned.

[Clive Efford (Eltham) (Lab)]

There is no change in this announcement for people who are self-employed. A constituent of mine has contacted me. Back in March, she was assessed as earning too much to qualify for any assistance. Her income has now been revised down, but there is no way for her to appeal that original decision. This is no way to treat self-employed people. Can the Chancellor go away and look at these people who have fallen through the net?

[Rishi Sunak]

Perhaps the hon. Gentleman missed that part of the statement; I apologise if it was not clear, but we have doubled the value of the self-employed grants that will be paid in the winter from 20% to 40%, mirroring the increase in the Government’s support for those who are in employment and ensuring parity between self-employed and employed. As I have said, that is generous and comprehensive. With regard to the income threshold, yes, the hon. Gentleman is right; we have decided to target support for the self-employed at those who earn less than £50,000. That is 95% of all those who are majority self-employed. The average income of those 5% who are not included is about £200,000.

[Martin Vickers (Cleethorpes) (Con)]

I welcome the package announced by my right hon. Friend; he has quite rightly adapted the support that he is providing to the changing circumstances. May I look beyond the pandemic to the economic recovery, and urge continued support for my constituency in respect of the Greater Grimsby town deal? We also need broadband connectivity—and let me give a special mention in that regard for the village of Wold Newton. I know that he will be disappointed if I do not also mention free port status for Immingham and the Humber ports.

[Rishi Sunak]

My hon. Friend is absolutely right. It is important that we can look through this crisis to our economic recovery. I know that his area will play a starring role in helping to drive that recovery, whether that is through Grimsby or a free port in Immingham. I am pleased to say that we are making good progress on the free port process. I hope to announce the bidding process very soon, and look forward to receiving his local area’s application when the time is right.

[Dave Doogan (Angus) (SNP)]

The nature of the Government’s interventions in this crisis are reactionary and there are significant gaps in the support. A principal casualty of those gaps are the 3 million excluded, who have had a devastating summer. The Chancellor has used the word “generous” over 20 times in this statement, so I urge him to advise me what support he will now give to the 3 million excluded. Will he do them the service not of telling us how he has supported other people, but of telling us what he will do for them?

[Rishi Sunak]

The circumstances of everyone who is self-employed will be different. It may well be that they own a business premises, which will benefit from business rates relief or a cash grant. It may well be that they have used the bounce back loan scheme, as over a million small businesses have. It may be that they are benefiting from the enhanced welfare system and the improvements to universal credit and the local housing allowance. Or it may be that they are the self-employed people who today will benefit from a doubling of the grant that I have announced, which will be up to over £3,700 this Christmas. This remains one of the most comprehensive packages of support for those who are self-employed anywhere in the world.

[Dr Kieran Mullan (Crewe and Nantwich) (Con)]

On behalf of the Hop Pole pub in Wistaston, Hickory’s Smokehouse in Shavington, Pillory House in Nantwich, Giovanni’s in Crewe and Eight Farmers in Leighton, all of whom have been telling about the difficulties that they have been facing, I thank the Chancellor for the support measures that he has announced today, which will have a huge impact on their ability to get through this troubling time. Will he confirm when the support will be available and whether it will be backdated for those of us who have been in tier 2 for some time?

[Rishi Sunak]

If we are ending on this note, my hon. Friend has made me exceptionally hungry to hear that roll-call of great-sounding restaurants, which I hope I have a chance to visit with him. I can gladly give him that reassurance. We will be backdating the tier 2 grant support to the time that those restrictions were put in place, and I hope that will be of benefit to all the restaurants that he mentioned and many more small businesses in his constituency.

Royal Assent

[Mr Speaker]

I have to notify the House, in accordance with the Royal Assent Act 1967, that Her Majesty has signified her Royal Assent to the following Acts:

Sentencing Act 2020

Extradition (Provisional Arrest) Act 2020.

In order to allow the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I suspend the House for a few minutes.

Oral Answers to Questions

Rishi Sunak Excerpts

Tuesday 20th October 2020 Commons Chamber

[Afzal Khan (Manchester, Gorton) (Lab)]

[The Chancellor of the Exchequer (Rishi Sunak)]

[Andrew Gwynne [V]]

[Rishi Sunak]

[Mrs Lewell-Buck]

[Rishi Sunak]

[Afzal Khan [V]]

[Rishi Sunak]

[Mel Stride (Central Devon) (Con) [V]]

[Rishi Sunak]

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

[Rishi Sunak]

[Anneliese Dodds]

[Rishi Sunak]

[Alison Thewliss (Glasgow Central) (SNP) [V]]

[Rishi Sunak]

[Alison Thewliss]

[Rishi Sunak]

[Dr Kieran Mullan (Crewe and Nantwich) (Con)]

--- Later in debate ---

[Naz Shah (Bradford West) (Lab)]

[The Chancellor of the Exchequer (Rishi Sunak)]

[Zarah Sultana]

[Rishi Sunak]

[Naz Shah]

[Rishi Sunak]

[Imran Ahmad Khan (Wakefield) (Con)]

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[Jacob Young (Redcar) (Con)]

[The Chancellor of the Exchequer (Rishi Sunak)]

[Jacob Young]

[Rishi Sunak]

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

[Rishi Sunak]

[Bridget Phillipson]

[Rishi Sunak]

[Mr John Baron (Basildon and Billericay) (Con) [V]]

[Rishi Sunak]

[Ian Byrne (Liverpool, West Derby) (Lab)]

[Rishi Sunak]

[Mrs Sheryll Murray (South East Cornwall) (Con)]

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[Christian Wakeford (Bury South) (Con)]

[Rishi Sunak]

[Paul Holmes (Eastleigh) (Con)]

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[Ruth Jones (Newport West) (Lab)]

[Rishi Sunak]

[Aaron Bell (Newcastle-under-Lyme) (Con)]

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[Mr Speaker]

[Rishi Sunak]

[Mr Speaker]

Covid-19 Economic Support Package

Rishi Sunak Excerpts

Wednesday 14th October 2020 Commons Chamber

[The Chancellor of the Exchequer (Rishi Sunak)]

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

“welcomes the Government’s package of support worth over £200 billion to help protect jobs and businesses through the coronavirus pandemic, including the eight-month long Coronavirus Job Retention Scheme, Self-Employment Income Support Scheme, £1,000 Job Retention Bonus, unprecedented loan schemes, business grants and tax cuts; further welcomes the pledge to protect, create and support jobs through measures in the £30 billion Plan for Jobs such as Eat Out to Help Out, VAT and stamp duty cuts and the £2 billion Kickstart Scheme; acknowledges the further support for jobs with increased cash grants and the expanded Job Support Scheme to support those businesses legally required to close due to national or local lockdowns; and further acknowledges that this is one of the most comprehensive and generous packages of support anywhere in the world.”

I very much welcome the opportunity to update Parliament and the country on the economic challenges we face and our plan to tackle them. My message to hon. Members in all parts of the House is simply this: we must not shy away from the burden of responsibility to take decisions and to lead. We must do this with honesty and co-operation. We cannot allow the virus to take hold. We must prevent the strain on our NHS from becoming unbearable, but we must also acknowledge the stark reality of the economic and social impacts of another national lockdown. The costs of doing that are not abstract—they are real: they can be counted in jobs lost, businesses closed and children’s educations harmed; they can be measured in the permanent damage done to our economy, which will undermine our long-term ability to fund our NHS and our valued public services; and they can be measured in the increase in long-term health conditions that unemployment causes.

This is not about choosing one side or the other. It is not about taking decisions because they are popular. It is not about health versus wealth, or any other simplistic lens we choose to view this moment through. The Prime Minister was absolutely right when he set out our desire for a balanced approach, taking the difficult decisions to save lives and keep the R rate down, while doing everything in our power to protect the jobs and livelihoods of the British people. The evidence shows that a regional tiered approach is right, because it prevents rushing to another lockdown the entire country would suffer rather than targeting that support and preventing a lockdown in parts of the country where the virus rates are low.

This is an imperfect solution. We have been consistently honest about the difficulties and hard choices that this moment presents. We have heard a lot about the SAGE advice. The SAGE minutes themselves say that Ministers must consider the

“associated costs in terms of health and wellbeing”

and the economic impacts alongside any epidemiological assessment. It seems like the only people not prepared to confront that reality are in the Labour party, which is surprising given that just days ago the shadow Health Secretary said a new national lockdown would be “disastrous” for society and

“would cause unimaginable damage to our economy and…wellbeing.”

[Mr Perkins]

The Chancellor’s response would have more credibility if he was not stood there following month after month of failure by a Government whose testing and tracing regime—whose entire approach—got us to this point in the first place. We all recognise how expensive this is going to be, but it has happened because of the failure that he and his party have facilitated.

[Rishi Sunak]

The debate following this will address test and trace. It is worth bearing in mind that more than £12 billion has been invested in our test and trace capacity. Testing capacity has increased from simply 10,000 a day at the start of this crisis to close to 300,000 today, on its way up to half a million, and ours now ranks as one of the most comprehensive testing regimes anywhere in Europe.

[Andrew Griffith]

Does my right hon. Friend agree that, faced with a choice between a national blunt instrument that would wreak enormous economic damage, and something that is more finely calibrated region by region based on the science, there is no choice to make?

[Rishi Sunak]

My hon. Friend is absolutely right: it is a blunt instrument. It would cause needless damage to parts of our country where virus rates are low.

[Several hon. Members rose—]

[Rishi Sunak]

Having spent weeks indulging themselves with political attacks on this Government’s efforts to protect jobs, Labour have now flipped and support a blunt national lockdown. They will not say how much damage that will do to jobs or livelihoods, they will not say how they plan to support businesses through it, and they do not seem to care about the long-term stability of the public finances. If they did—[Interruption.]

[Mr Speaker]

Order. I am sorry, Chancellor. Please, I cannot hear the Chancellor. I want to hear him, and I am sure people outside the House want to hear him, so please, if he is going to give way—the Chancellor is a generous man—he will give way. In the meantime, I do not need people shouting.

[Rishi Sunak]

Thank you, Mr Speaker. If they did care, we would hear from the shadow Chancellor how many jobs Labour’s lockdown would cost.

[Alex Cunningham (Stockton North) (Lab)]

I am grateful to the generous Chancellor for giving way. Today, the North East Child Poverty Commission said that 35% of children in the north-east region are living in poverty. As a direct result of Conservative policies, we are going to see that number increase. What is he going to do about those children?

[Rishi Sunak]

The most vulnerable have been at the forefront of our mind throughout this crisis, which is why it is clear from the distributional impact of our interventions, which was published over the summer, that they have benefited those on the lowest incomes the most. It is there in black and white: a Conservative Government making sure the most vulnerable are protected through this crisis.

Any responsible party of government would acknowledge the economic cost of a blunt national lockdown. The Labour party may say it has a plan, but be under no illusion: a plan blind to the hard choices we face—a plan blind to and detached from reality—is no plan at all.

[Ms Angela Eagle]

In the Liverpool city region, which contains my constituency of Wallasey, there is £40 million of unspent support for business that the Chancellor generously granted in the first wave of the pandemic. Given that we are in tier 3, will he say today at the Dispatch Box that he will release that £40 million so that the local authorities in the Liverpool city region can apply that money to help their local businesses during this highest level of lockdown that we are suffering at the moment?

[Rishi Sunak]

I know what a difficult time this is for the hon. Lady and her constituents. With regard to underspends—I will come on to this later—I think it is wrong to think of them in that way. That was the Government giving an advance to local authorities to make payments to businesses. That was done on the basis that every local authority will have a wildly different degree of overspend or underspend, which we true up at the end of the process. We could equally have asked local authorities to make payments themselves and reimbursed them afterwards. There is significant financial support both for her local authority and the businesses in her area that have closed down. That was announced by the Prime Minister and I will come on to address that in detail later. It is right that that support is there.

Let me reiterate our plan. The House will be well aware of the gravity of our economic situation. The latest figures show that our economy grew by 6% in July and 2% in August, but it remains almost 10% smaller than it was before coronavirus hit. Business investment suffered a record fall in the second quarter of this year. Consumer sentiment remains well below its long-run average. Despite the significant support we have provided, the data is beginning to reveal the true extent of the damage that coronavirus has caused our labour market. The latest statistics published just yesterday show employment falling, unemployment rising and welfare claims rising. The revisions that the Office for National Statistics has made to its previous estimates show that unemployment was higher than it thought over the summer.

I have talked about facing up to the difficult truths clearly, and we are facing an economic emergency, but we are acting on a scale commensurate with this emergency as we address my single biggest priority: to protect people’s jobs and their livelihoods. We have put in place a comprehensive plan to protect, support and create jobs in every region and nation of the United Kingdom. Through more than £200 billion of support since March, we are: protecting more than 9.5 million jobs through the job retention schemes; strengthening our welfare safety net with an extra £9 billion for the lowest paid and most vulnerable; granting more than £13.5 billion to those who are self-employed, with further grants to come; and protecting over 1 million small and medium-sized businesses through £100 billion of tax cuts, tax deferrals, direct grants and Government-backed loans.

[Kevin Hollinrake]

Does my right hon. Friend agree that the best way to protect jobs is to keep the economy open wherever possible? Most other nations are using a local-restrictions approach to deal with this situation, including Germany, which is using lockdowns at a district level, not even at a state or county level. Does he agree that that is the best way forward?

[Rishi Sunak]

My hon. Friend is absolutely right. The only sustainable way to protect jobs in the long run is to have an economy that is open and functioning. No amount of support can make up for that.

There are other things we have done: eased repayment terms on those loans through pay as you grow; delivered on our promise to give the NHS what it needs; backed hundreds of thousands of young people to find good jobs through the kickstart scheme and new investment in training and apprenticeships; created green jobs through the £2 billion green grant programme; showed that we are here for our cultural sector, with the cultural recovery fund and a further support package for charities; and invested hundreds of billions of pounds in the largest, most sustained programme of infrastructure investment the UK has seen in decades. That is comprehensive action to protect the jobs and livelihoods of the British people. It undermines the credibility of the Labour party that, in the face of all that support, it continues to pretend that insufficient action is being taken.

[Rachael Maskell (York Central) (Lab/Co-op)]

Will the Chancellor give way?

[Rishi Sunak]

I will make some progress.

As the crisis evolves, our economic response will also evolve. What we will see over the winter is a complex picture of some businesses able to open safely and others being ordered to close to control the spread of the virus. Our winter economy plan provides a toolkit to protect jobs and businesses over the difficult weeks and months to come. The plan has three parts.

First, the job support scheme will protect jobs in businesses that are open or closed. If businesses can open safely, but with reduced or uncertain demand, the Government will directly subsidise people’s wages over the winter, giving those employers the option to bring people back to work on shorter hours rather than making them redundant. We are expanding the job support scheme to give more support to businesses that are ordered to close. For people unable to work for one week or more, their employer will still be able to pay them two thirds of their normal salary and the UK Government will cover the cost. This national programme will benefit people the same wherever they live and whatever job they do.

[Mr Perkins]

There seems to be a basic dishonesty at the heart of these tier 2 plans. There is no support for pubs. They are being told that they are allowed to stay open, but the measures being brought in are making them unviable. At least with our approach what we would see is a short-term hit, but then a reduction in the rate and more of a chance for us to return to normality. Will he at least admit that those pubs in tier 2 areas are not going to have viable businesses and say something about what he will do to support them?

[Rishi Sunak]

I am glad that there has finally been some acknowledgment that there will be a hit to businesses and jobs from what the Labour party is suggesting. It is right that there is support provided for hospitality, which is why the Government have provided a VAT reduction, a business rates holiday, direct cash grants, eat out to help out and now the job support scheme that is directly there to support those businesses that are open and operating but not at the same levels that they were previously. To give those businesses and their employees certainty, rather than the weeks that I heard about from the hon. Member for Oxford East, this scheme will run for six months through to the spring. This job support scheme is in line with those in most other European countries and, to support the lowest paid through this crisis, we have made our welfare system more generous and responsive too.

[Rachael Maskell]

The Chancellor will know from York’s economic base and the complexity of our economy that unemployment may rise to 27% in our city. What additional measures will he put in place to build the bridge to get us through this really difficult period? The job support scheme will just not deliver for my constituents.

[Rishi Sunak]

The job support scheme was widely welcomed not just by businesses groups such as the CBI and the Federation of Small Businesses but by the TUC, which I was happy to work closely with to design the scheme. However, she is right. That is not the only thing that we will do to support jobs, which is why we have put in place the £2 billion kickstart scheme to provide fully funded job placements for those young people most affected by this crisis and most at risk of unemployment. Thousands of those young kickstarters will be starting their new jobs this autumn.

[Miriam Cates (Penistone and Stocksbridge) (Con)]

Does my right hon. Friend agree that, while we all want simple solutions to this crisis—whether that is the Opposition suggesting full lockdown or an unlimited extension to furlough—there are no simple solutions. This is a highly complex problem. Every intervention and every support scheme will be nuanced and will have to be regionally effective There are no simple solutions. We should not be looking for simple solutions; we should be looking for the right ones.

[Rishi Sunak]

As ever, my hon. Friend is spot on. It is not leadership to shy away from the hard choices and real trade-offs that these decisions take. She is absolutely right.

The second part of our winter plan is to support businesses that are legally required to close, and we heard about that previously. Those businesses will now be able to claim a cash grant of up to £3,000 per month depending on the value of their property. Those grants can be used for any business cost and will not need to be repaid. I have also guaranteed £1.3 billion of funding for the Scottish, Welsh and Northern Ireland Administrations so that they can choose to do something similar. The hon. Member for Oxford East asked whether other areas had received that support, and was under the impression that none other had. I can correct the facts. Bolton is the only other area that has faced hospitality restrictions in that way and Bolton Council has received, at the last count, I believe almost £200,000 of support to compensate its businesses because they have been closed in a similar way.

[Anneliese Dodds]

I fear that the Chancellor is confused. I was not talking about the much-trumpeted local restriction support grant. He is right; it has been applied so far only to that one area of Bolton. I was talking about the business support that was delivered to Leicester, Oadby and Wigston, which I believe has not been provided to any other part of the country.

[Rishi Sunak]

It is the same type of support—support provided to the local authority to help their businesses. That was the question the hon. Lady asked my hon. Friend the Member for Harborough (Neil O’Brien), and I am happy to answer it.

The third part of our plan is to provide additional funding for local authorities. Again, I am happy to correct what may be a misunderstanding of the situation for the hon. Member for Oxford East. It is not the case that that support is only for local authorities in tier 3. There is a scaled structure. All local authorities placed into different tiers will receive extra financial support on a per capita basis, using the funding formula that my right hon. Friend the Chief Secretary is implementing. That funding will be worth up to almost half a billion pounds on a national basis, to support local areas and their public health teams with their local response, whether that is more enforcement, compliance or contact tracing. That comes on top of the almost £1 billion announced by my right hon. Friend the Prime Minister that we will provide to all local authorities, as we talk to them about their needs over this difficult period, to ensure that they can provide the services they need to. That also comes on top of the £3.7 billion already provided to local authorities.

This Government are dealing with the world as it is. While the hon. Member for Oxford East may not wish to confront that reality, I do not have that luxury. We cannot just let the virus take hold, but nor can we blithely fall into another national spring-style lockdown, as the Labour party wants to, rather than following our regional, tiered and localised approach. We are dealing with a once-in-a-century event, and I can assure Members on both sides of the House that the Government are doing all they can to support the country through this crisis.

We need a balanced approach, we need a consistent approach, and—as you will have seen, Mr Speaker—we also want a co-operative approach. But any responsible party calling for a shutdown of our entire country should be honest about the potential economic and social costs of such a dramatic measure. At the very least, they should have the integrity to acknowledge that what they are proposing will cause significant damage to people’s lives and livelihoods. I have never said that there are easy choices or cost-free answers. This is the reality we face, and it would be dishonest to ignore that truth. So no more political games and cheap shots from the sidelines. The Labour party can either be part of this solution or part of the problem. It is called leadership, but from them, I am not holding my breath.

[Mr Speaker]

There will be a four-minute limit on speeches after the SNP spokesperson. I call David Linden.

--- Later in debate ---

[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.

Job Support Scheme and Local Restrictions Support Grant

Rishi Sunak Excerpts

Monday 12th October 2020 Written Statements

[The Chancellor of the Exchequer (Rishi Sunak)]

Following my announcement on Friday 9 October that I am expanding the job support scheme (JSS), and increasing the generosity and frequency of local restrictions support grants, I am pleased to share more detail of these schemes and how this Government are supporting and protecting jobs and livelihoods.



The JSS is being expanded to provide temporary, localised support to businesses across the UK whose premises are legally required to close as a direct result of coronavirus restrictions set by one or more of the four Governments of the UK.



This expansion of the JSS will help businesses through the period they are affected by these restrictions, supporting the wage costs of employees in eligible premises who have been instructed to cease work and comply with this instruction. This scheme will enable those premises to reopen as quickly as possible when they can. It will help protect employee incomes, limit unemployment and maintain employer-employee matches.



This is part of the job support scheme, available to employers from 1 November 2020 for six months, with the scheme reviewed in January. Further guidance will be published in the coming weeks. Employers will be able to make a claim in arrears on a monthly basis online through www.gov.uk from early December 2020.



The coronavirus job retention scheme (CJRS) remains in place until 31 October, and flexibility in the system means if an employer is required to close in October, eligible employees can be furloughed until 31 October. The new job support scheme is available from 1 November, with payments from early December. Eligible employees whose employers use the expanded JSS will continue to be paid by their employer throughout this period. Neither the employer nor the employee needs to have previously used the CJRS to be eligible for the expanded JSS.



In line with the rules for the JSS already announced: all employers with a UK bank account and a UK PAYE scheme registered on or before 23 September can claim the scheme. Only employees that are on their employer’s payroll by 23 September are eligible. This means a real time information (RTI) submission notifying payment of that employee to HMRC must have been made on or before this date. This scheme will cover businesses that, as a result of restrictions set by one or more of the four Governments in the UK, are legally required to close their premises. This includes businesses told to provide only delivery and/or collection services from their premises. This scheme is open to employers across the UK, and we look forward to working constructively with the devolved administrations to ensure it operates effectively in all four nations.



The scheme will pay a grant to the employer calculated based on the number of eligible employees who cannot work at the relevant premises—which has been required to close by Government. Employers will only be able to use the scheme for employees who have been instructed to cease work—paid or unpaid for that employer.



Eligible employees cannot work for a minimum of seven consecutive (or calendar) days. An employee can return at a later date. Claims must not overlap and must be made monthly in arrears. These payments will be taxable, and employers will be required to cover employer NICS and automatic enrolment pension contributions in full, where applicable, but are not required to make further contribution to wage costs. However, employers can top up employee pay if they wish.



In line with JSS payments for hours not worked, the grant per eligible employee available from the UK Government is two-thirds of their normal pay up to a limit of £2,100 per month. Further detail on how normal pay is calculated will be set out in guidance. If an employer is closed by Government regulations then they can claim under the applicable rules. When that changes and they are able to reopen they can claim under the wider JSS for firms facing reduced demand under the criteria we outlined in September. Employers will be able to claim the job retention bonus for employees provided they are eligible. JSS grants can be used by employers to pay an employee's wages and help meet the JRB minimum income threshold.



The employer must use the scheme to cover their employees’ wages and pay relevant payroll taxes. The whole of the grant must be used to meet employee costs. The grant will not cover class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer. Payments will be made in arrears, reimbursing the employer for the Government’s contribution.



On 9 September, the Government announced the local restrictions support grant scheme. This scheme provided businesses which are forced to close for three weeks or more due to a nationally imposed local lockdown in England with grants of up to £1,500 per three-week closure period.



The Government are now making this scheme more generous so that businesses receive up to £3,000 per month, and are eligible for payment sooner, after only two weeks of closure rather than three. The Government are also extending the scheme to include businesses which have been required to close on a national rather than a local basis, or which have not been legally able to reopen since the first lockdown in March.



Businesses will receive the following:



For properties with a rateable value of £15,000 or under, grants to be £1,334 per month, or £667 per two weeks;

For properties with a rateable value of between £15,000 and £51,000 grants to be £2,000 per month, or £1,000 per two weeks;

For properties with a rateable value of £51,000 or over grants to be £3,000 per month, or £1,500 per two weeks;

Local Authorities will continue to receive 5% of the funding which they received for the local restrictions support grant scheme as a discretionary fund, which the Government will encourage them to use to support business that have been legally mandated to close by the Government but are outside of the business rates system.



Grants will be administered by local authorities, and eligible businesses will probably need to provide their details to their local authority to access this support.

[HCWS503]

Treasury

Rishi Sunak Excerpts

Tuesday 29th September 2020 Ministerial Corrections

[Greg Smith (Buckingham) (Con)]

I warmly welcome the enormous package of measures outlined by the Chancellor. This morning, I spoke to Energy Generator Hire in Kimble Wick in my constituency, which has lost most of its order book and is uncertain about the future. Can he confirm whether event hire companies are included in the envelope of leisure and hospitality?

[Rishi Sunak]

Those that have business properties will be eligible both for the relief and the grant, which will cover a significant number of events companies that have premises. Obviously, if they do not have premises, they will not qualify for business rates relief, but should be eligible for some of the other measures that I have outlined today.

[Official Report, 17 March 2020, Vol. 673, c. 964.]

Letter of correction from the Chancellor of the Exchequer, the right hon. Member for Richmond (Yorks) (Rishi Sunak):

An error has been identified in the answer I gave to my hon. Friend the Member for Buckingham (Greg Smith).

The correct answer should have been:

[Rishi Sunak]

Those that occupy certain business properties, as described in forthcoming guidance, will be eligible both for the relief and the grant, which will cover a significant number of events companies that have premises. Obviously, if they do not have premises, they will not qualify for business rates relief, but should be eligible for some of the other measures that I have outlined today.

The Economy

Rishi Sunak Excerpts

Thursday 24th September 2020 Commons Chamber

[The Chancellor of the Exchequer (Rishi Sunak)]

Thank you for granting me permission to make this statement to the House, Mr Speaker. Earlier this week, the Prime Minister set out the next stage of the Government’s health response to coronavirus. Today, I want to explain the next phase of our planned economic response. The House will be reassured to know that I have been developing plans to protect jobs and the economy over the winter period—plans that seek to strike a finely judged balance between managing the virus and protecting the jobs and livelihoods of millions.

I know that people are anxious, afraid and exhausted at the prospect of further restrictions on our economic and social freedoms. I share those feelings, but there are reasons to be cautiously optimistic. We are in a fundamentally different position than we were in March, and we now know much more about this virus. Public awareness of the risks and how to mitigate them is far greater, and we have met our promise to give the NHS whatever it needs, with significant new funding for NHS capacity and for personal protective equipment. I can inform the House that we have now provided over £12 billion for test and trace.

In economic terms, while our output remains well below what it was in February, we have seen three consecutive months of growth, and millions of people have moved off the furlough and back to work. But the resurgence of the virus and the measures we need to take in response pose a threat to this fragile economic recovery, so our task now is to move to the next stage of our economic plan, nurturing the recovery by protecting jobs through the difficult winter months.

The underlying rationale for the next phase of economic support must be different from what came before. The primary goal of our economic policy remains unchanged—to support people’s jobs—but the way we achieve that must evolve. Back in March, we hoped we were facing a temporary period of disruption. In response, we provided one of the most generous and comprehensive economic plans anywhere in the world, with £190 billion of support for people, businesses and public services as we have protected our economic capacity. It is now clear, as the Prime Minister and our scientific advisers have said, that for at least the next six months the virus and restrictions are going to be a fact of our lives. Our economy is now likely to undergo a more permanent adjustment. The sources of our economic growth and the kinds of jobs we create will adapt and evolve to the new normal, and our plan needs to adapt and evolve in response.

Above all, we need to face up to the trade-offs and hard choices that coronavirus presents, and there has been no harder choice than the decision to end the furlough scheme. The furlough was the right policy at the time we introduced it. It provided immediate short-term protection for millions of jobs through a period of acute crisis, but as the economy reopens, it is fundamentally wrong to hold people in jobs that only exist inside the furlough. We need to create new opportunities and allow the economy to move forward, and that means supporting people to be in viable jobs that provide genuine security.

As I have said throughout this crisis, I cannot save every business. I cannot save every job. No Chancellor could. But what we can and must do is deal with the real problems businesses and employees are facing now. In March, the problem was that we ordered businesses to close. In response, we paid people to stay at home and not work. Today, the problem is different. Many businesses are operating safely and viably, but they now face uncertainty and reduced demand over the winter months. What those businesses need is support to bring people back to work and protect as many viable jobs as we can.

To do that, I am announcing today the new jobs support scheme. The Government will directly support the wages of people in work, giving businesses that face depressed demand the option of keeping employees in a job on shorter hours, rather than making them redundant.

The job support scheme is built on three principles. First, it will support viable jobs. To make sure of that, employees must work at least a third of their normal hours and be paid for that work as normal by their employer. The Government, together with employers, will then increase those people’s wages, covering two thirds of the pay they have lost by reducing their working hours. The employee will keep their job.

Secondly, we will target support at firms that need it most. All small and medium-sized businesses are eligible, but larger businesses only when their turnover has fallen through the crisis.

Thirdly, it will be open to employers across the United Kingdom, even if they have not previously used the furlough scheme.

The scheme will run for six months, starting in November. Employers retaining furloughed staff on shorter hours can claim both the job support scheme and the jobs retention bonus.

Throughout this crisis, we have sought parity between employees and the self-employed, providing more than £13 billion of support to over 2.6 million self-employed small businesses, so I am extending the existing self-employed grant on similar terms and conditions as the new jobs support scheme.

These are radical interventions in the UK labour market—policies we have never tried in this country before. Together with their jobs retention bonus, the kickstart scheme for young people, tens of billions of pounds of job creation schemes and new investment in training and apprenticeships, we are protecting millions of jobs and businesses.

If we want to protect jobs this winter, the second major challenge is helping businesses with cash flow. Over the past six months, we have supported business with tens of billions of pounds of tax deferrals and generous Government-backed loans. Those policies have been a lifeline, but right now businesses need every extra pound to protect jobs, rather than repaying loans and tax deferrals, so I am taking four further steps today to make that happen.

First, bounce back loans have given over a million small businesses a £38 billion boost to survive this pandemic. To give those businesses more time and greater flexibility to repay their loans, we are introducing pay as you grow. This means loans can now be extended from six to 10 years, nearly halving the average monthly repayment. Businesses that are struggling can now choose to make interest-only payments, and anyone in real trouble can apply to suspend repayments altogether for up to six months. No business taking up pay as you grow will see its credit rating affected as a result.

Secondly, I am also changing the terms of our other loan schemes. More than 60,000 small and medium-sized businesses have taken out coronavirus business interruption loans. To help them, I plan to extend the Government guarantee on those loans for up to 10 years, making it easier for lenders to give more people more time to repay. I am also extending the deadline for all our loan schemes to the end of this year, and we are starting work on a new successor loan guarantee programme that is set to begin in January.

Thirdly, I want to give businesses more time and flexibility over their deferred tax bills. Nearly half a million businesses deferred more than £30 billion of VAT this year. Under current plans, those payments fall due in March. Instead, I will allow businesses to spread that VAT bill over 11 smaller repayments, with no interest to pay. Any of the millions of self-assessed income tax payers who need extra help can also now extend their outstanding tax bill over 12 months from next January.

The final step I am taking today will support two of the most affected sectors: hospitality and tourism. Under current plans, their VAT rates will increase from 5% to the standard rate of 20% on 13 January. To support more than 150,000 businesses and help to protect 2.4 million jobs through the winter, today I announce that we are cancelling the planned increase, and will keep the lower 5% VAT rate until 31 March next year.

Today’s measures mark an important evolution in our approach. Our lives can no longer be put on hold. Since May we have taken steps to liberate our economy and society. We did those things because life means more than simply existing. We find meaning and hope through our friends and family, and through our work and community. People were not wrong for wanting that meaning, and for striving towards normality, and neither were the Government wrong to want that for them. I said in the summer that we must endure, and live with the uncertainty of the moment, and that means learning our new limits as we go. The truth is that responsibility for defeating coronavirus cannot be held by the Government alone. It is a collective responsibility, shared by all, because the cost is paid by all.

We have so often spoken about the virus in terms of lives lost, but the price our country is paying is wider than that. The Government have done much to mitigate the effects of those awful trade-offs between health, education, and employment, and as we think about the next few weeks and months, we must bear all those costs in mind. As such, it would be dishonest to say that there is now a risk-free solution, or that we can mandate behaviour to such an extent that we lose any sense of personal responsibility. What was true at the beginning of this crisis remains true now: it is on all of us, and we must learn to live with it, and live without fear. I commend this statement to the House.

[Mr Speaker]

I recognise the importance of this statement and that, quite rightly, the shadow Chancellor might need a little more time. I will ensure that the other Front-Bench speakers also have some extra time.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

I thank the Chancellor for his statement and for advance sight of this announcement. I have called for the introduction of a system of targeted wage support 40 times. That call has been rebuffed by the Government 20 times. It is a relief that the Government have U-turned now, but we must be open and honest: that delay in introducing this new scheme will have impacted on businesses’ confidence. I know that from talking to them, and I am sure that Government Members know that from talking to businesses in their constituencies.

The deadline for redundancy consultations by large firms before the end of the furlough scheme came and went last week without a word from the Government. If the package of measures announced today can help people keep their jobs and help businesses through hard times, Labour will of course support it. There is much in the statement that we do support—as I just said, we have repeatedly called for a system of targeted wage support, and we have called for help for indebted, cash-strapped businesses over and over again—but we must ensure that these measures are as effective as possible at keeping workers in employment, getting unemployed people back into work and keeping viable businesses in operation.

As with many previous announcements by the Government, we must wait for the detail to be revealed—presumably following the press conference scheduled for later on today. Workers and businesses are hanging on the Chancellor’s every word right now, and they need to know what is promised here. So can the Chancellor be clear: will the wage support scheme actually keep more people in work? For that to happen, the scheme must make it more attractive for employers to retain more staff on reduced hours than to retain some full time and make others redundant. Does his scheme actually incentivise short-hours working?

What conditions, if any, will be applied to ensure value for public money? Will the scheme require commitments to continuing employment, unlike the existing furlough scheme, where there have been abuses? Will it require those participating to provide decent, sustainable work?

Will the scheme incentivise training and retraining? The German scheme does, and Labour has called for a UK version to include incentives for training, but that is missing here. Indeed, while, as I said, we welcome many of the elements that the Chancellor has announced, the lack of action on training and skills is worrying. I was waiting and waiting for the Chancellor to talk about training. He mentioned the word once, in passing. That is not enough. His Government have already allocated funding for a national skills strategy, but it is not being delivered on the ground. When will the Chancellor get serious about training so that people can be ready for the jobs of the future? He mentioned the fact that our economy is changing. Let us make sure that our population is ready for that change.

Labour has called repeatedly for continued, targeted support for the self-employed, so I am pleased that that is referred to here, but will these measures avoid the gaps in coverage that have bedevilled existing schemes? Why is there no forward plan for the needs of those who are extremely clinically vulnerable to the disease? Belatedly, will the Chancellor do more to demand that his colleagues get a grip on the UK’s public health crisis? Our country is suffering from a double tragedy: the highest excess death rate in Europe and the deepest recession in the G7.

Labour supports the Government in their announcement of additional restrictions this week. The Government’s messaging has been confused enough already, so the last thing we want to do is add to that confusion, but we are concerned that these restrictions are necessary only because of continuing problems with test, trace and isolate. The Chancellor referred to the money put into test, trace and isolate. As I said earlier this week, enormous sums have been devoted to that task, but those sums are not delivering the system that we need. We are still not at the stage of many other countries. The Chancellor must work on that, as well as his other colleagues in Government.

Finally, before the summer recess, Labour called for a back to work Budget focused on jobs, jobs, jobs. We did not get one. We expected a Budget this autumn. It appears, again, that we are not getting one. That is despite the challenges it poses for devolved Governments, and despite the fact that the Government have actually referred to provisions in a future Finance Bill as necessary for their approach to Brexit. The Chancellor announced that he would make a statement to Parliament today only after I had called for him to come here to answer an urgent question; I am very grateful to you, Mr Speaker, for granting that.

This Government have lagged behind on test, trace and isolate. They have lagged behind on wage support. They have lagged behind on support for those having to self-isolate. They are lagging behind on green investment. For these and for other reasons, it looks like our recovery will be lagging behind that of many other countries. So, finally, when will the Chancellor provide the back to work Budget that this country needs?

[Rishi Sunak]

I thank the hon. Lady for her comments. On the question of continued support for jobs, however, I had hoped that she would have welcomed strongly today’s measures, if for no other reason than that she has previously asked for something similar. However, her position on this matter has been somewhat changeable. At different points in the last few weeks and months, she has said that furlough should not go on for ever, and then changed her mind and said that we should extend it. Then she changed her mind and said it should be replaced, and then only yesterday the Leader of the Opposition said it should be extended again. That is not the kind of certainty that British businesses or British workers need.

To address the specific questions, this scheme absolutely does incentivise shorter time working. The company will pay its workers for the time that they are in work, and the Government and the employer jointly will subsidise the time the worker is not working. The conditions will be set out in guidance, which will be published shortly, and then over the next few weeks the further details will be worked through with businesses and unions, as we did with the furlough scheme.

I can reassure the hon. Lady that the new scheme does indeed have the conditionality that is appropriate for this stage of our response. Notably, this scheme will be available only for larger companies that are seeing a decline in their revenues as a result of coronavirus, ensuring that our support is targeted where it is most needed. Similarly, there will be restrictions on larger companies in capital distributions to shareholders while they are in receipt of money for their workers under this scheme. Indeed, they will not be able to give redundancy notices to those workers who are on this scheme throughout its duration.

We have increased training both for post-16 at the Budget and, indeed, in the recent plan for jobs, providing increased access for school leavers to level 2 qualifications across the board. Notably, one of the hallmarks of our skills system is our successful apprenticeship programme. What we announced in July was a significant increase in the incentive payment to businesses for taking on a new apprentice: a £2,000 cash incentive to businesses to take on an apprentice and provide that valuable in-work training that we know makes such a difference to young people’s futures. So we are committed to providing especially our young people with the opportunities that they need to succeed in the future.

The hon. Lady talked about jobs. In July, we outlined a £30 billion plan for jobs—to support, create and protect jobs across every part of our United Kingdom. Chief among the initiatives was the kickstart scheme, where right now employers—small, medium-sized and large—are rushing to put in applications to take on a young kickstarter later this autumn, to provide them with the opportunities that they need at an incredibly difficult time. I can assure this House and the country that my No. 1 economic priority is to protect people’s jobs, and that is what this Government will continue to do.

In conclusion, the Opposition wanted the furlough extended, but they never said for how long. Then they wanted the furlough replaced, but they would not say what with. Then they wanted the furlough targeted, but they would not say on whom. I do stand ready to work with the hon. Lady, if she knew exactly what she wanted. Today, the Government stand with the British people and British business, with the CBI, the British Chambers of Commerce and the Trades Union Congress, in bringing much-needed support to the economy. Yesterday, the Leader of the Opposition called for a plan B for the economy. The Labour party does not even have a plan A.

[Mel Stride (Central Devon) (Con)]

The devil, of course, will be in the detail, but from what I have heard, I broadly and warmly welcome this statement. I am encouraged by the job support scheme and the fact that it is targeted, for which I and my Committee have been calling for some time. I am encouraged by the announcements on loans and the pay-as-you-grow scheme, particularly to help small and medium-sized enterprises, and I am encouraged that the self-employed will have their scheme extended.

However, my right hon. Friend will know that there was considerable concern that many self-employed people fell through the gaps of the support provided. Will he say something about whether some of those gaps will be ameliorated or ironed out as a consequence of the new measures, and will he meet me in fairly short order to discuss the options that might be available?

[Rishi Sunak]

I thank my right hon. Friend for his comments; I am sure he will see in much of what we have announced today some of the thinking in his latest report. I thank him and his Committee members for all the input they have provided in helping us to think about the next phase of our economic response. He is right that this package focuses on employment and, indeed, on supporting businesses with their cash flow.

With regard to the self-employed, I am glad my right hon. Friend welcomes the extension of the existing support grant. Virtually no other country in the world has done that, and it comes on top of the most generous support for our self-employed of almost any country throughout the response to this crisis. Of course, I will be happy to meet him, but I know he will also be pleased to learn that the measures today to defer income tax self-assessment will be of particular importance to our self-employed small businesses.

[Alison Thewliss (Glasgow Central) (SNP)]

Scottish National party Members are glad that the Chancellor has accepted the need to extend support, but it comes very late in the day and is little comfort to those who have already lost their jobs due to the impending end of the furlough scheme. Industry, trade unions, the Treasury Committee, people across the country and hon. Members across parties in this House have been pleading with him for months now, and it feels as if it is only the latest spike that has prompted his action.

Coronavirus is not done with us yet. The furlough scheme has saved jobs and kept people paying their bills and mortgages. It has been incredibly important and it is a shame that the Chancellor is ending it at the end of next month. Hospitality, travel and tourism, aviation exhibitions, culture and performing arts, even travelling showpeople, and a host of others cannot go back to normal work because the Government have placed restrictions on their businesses.

Those jobs and those businesses are viable—it is not for the Chancellor to decide the viability of businesses. Ending the scheme put 61,000 Scottish jobs at risk. His measures on the pay-as-you-grow scheme recognise that many businesses have deferred payments and have mounting debt. However, the problem for many businesses is not income deferred, but income lost completely, so will he go further and convert those loans to grants and equity, to give companies a bit more certainty about their future? We welcome the hospitality and tourism VAT cut, but will he reassess that in March and perhaps consider keeping it in place permanently to help those businesses pick up, hopefully, through an improved situation next summer?

There is nothing here, nothing whatsoever, for those who have been excluded from existing support schemes—for freelancers, the Forgotten Ltd, the pay-as-you-earn employees, the new starters, the women on maternity and all those who have had not one penny piece from this Government for six months. The Chancellor cannot say he does not know that that is a problem, although he still refuses to meet them. How dare he say that these 3 million people should be left high and dry with nothing?

Will the Chancellor introduce further conditions to prevent unscrupulous employers from exploiting the new schemes as BAE and others have done? Will he support the fire and rehire Bill from my hon. Friend and colleague the Member for Paisley and Renfrewshire North (Gavin Newlands), which would prevent that exploitation in future?

The Chancellor did not have the courtesy to lift the phone to the Cabinet Secretary for Finance in the Scottish Government, Kate Forbes, or her counterparts in Wales and Northern Ireland, to let her know that he plans to scrap the autumn Budget. They found out on Twitter. It is not the first time this Government have had a lack of respect for the devolved institutions, because that happened last year, too. Does he appreciate the very difficult situation he has created? With no access to the fiscal levers and no clarity on the funding settlement, he has tied both of Kate Forbes’s hands behind her back. What does he intend to do about that?

[Rishi Sunak]

I think the hon. Lady is continuing to ask for an extension of the furlough scheme, but fundamentally I do not believe that that would be the right thing to do. At this stage of the economic recovery it is better that our support is targeted and focused on supporting viable jobs in our economy, and that means a new approach. Extending the furlough and allowing people to be at home full time is not the right approach in this phase of the economic crisis. Our new scheme will ensure that we provide support to those who need it most and protect as many viable jobs as possible in many of the industries she mentioned.

The hon. Lady asked about conditions. I agree with her that there should be conditions on larger companies accessing support from the Government for wage protection. There will be conditions on capital redistributions and on the ability to provide redundancy notices to employees while they are on the scheme, and, in the first place, limiting the eligibility for large companies to those that are most in need.

On dialogue with the Scottish Government, I am pleased to say that the Chief Secretary to the Treasury speaks regularly with his counterparts, as I believe he will be doing very shortly. There is a well worked process for how devolved nations’ budgets are set. There is absolutely no requirement for a UK Budget to be done beforehand. Indeed, that was not the case earlier this spring. We will have Office for Budget Responsibility forecasts later this autumn. On the basis of those forecasts, the normal work will be done with our counterparts in the devolved authorities to ensure that they can set the budgets they need.

[Douglas Ross (Moray) (Con)]

Over 900,000 Scottish jobs have been protected as a result of the UK Government’s furlough scheme during the worst of this crisis, ensuring that over the past six months hundreds of thousands of Scottish families have continued to maintain a regular income. I welcome the further support announced by the UK Government today. Will the Chancellor of the Exchequer outline how the UK Government measures will benefit communities, businesses, individuals and families across Scotland as we enter this next difficult phase in our fight against coronavirus?

[Rishi Sunak]

I am grateful to my hon. Friend for his question and for the conversations he has had with both me and the Prime Minister on the importance of supporting every part of our United Kingdom as we go through this economic crisis and drive our recovery forward. That is something this Government will always take very seriously. He has been very helpful and played a valuable role in ensuring that the measures we have put in place today will benefit companies and workers in every single part of our United Kingdom.

[Charlotte Nichols (Warrington North) (Lab)]

Large parts of the north, including my constituency, are under extra restrictions but are not being given additional support from the Treasury, whether it is our local authorities or our businesses. If the Government’s levelling up agenda is to mean anything, that must be urgently addressed. Today’s statement is a significant change of direction from “whatever it takes”, so what extra measures will the Chancellor provide to constituencies such as mine to ensure we are not levelled down as a result of the pandemic?

[Rishi Sunak]

There is support in place for local authorities, through the NHS, for any response in areas of tightened restrictions, whether for community information or enhanced testing. Recently, we outlined a self-isolation incentive payment of up to £500 and a business grant support scheme for businesses that have been ordered to close. The Government remain committed to levelling up in every part of our country, as outlined in our ambitious plans to invest in infrastructure in every part of our country.

[Lee Anderson (Ashfield) (Con)]

The eat out to help out scheme was a massive success in Ashfield, with 53,000 meals served. The scheme saved thousands of jobs and kept hundreds of businesses open. However, my wife is not happy with the Chancellor, because I put a stone on in weight in August, which meant I needed bigger clothes. Jono Edwards, who owns the world-famous Junction Bar & Restaurant, is very happy with the Chancellor. Jono tells me that without the Chancellor’s support his bar would have closed and his staff, who are like a family to him, would have lost their jobs. May I pass on my thanks to the Chancellor from every single pub and hospitality business in Ashfield for extending the 5% VAT cut until next March? Jono Edwards, Dame Margo and Donna at the Junction pub will be very happy with this great news.

[Rishi Sunak]

I thank my hon. Friend, and I am glad that our initiatives have made such a difference on the ground to people in his constituency in protecting jobs, as I am sure they have elsewhere. I very much hope that I can come to visit him and Jono and his team at the Junction pub in the near future, and I wish them every support through the next few months. I hope that the measures we have put in place today will ensure that they continue to thrive in the future.

[Rachel Hopkins (Luton South) (Lab)]

I have called for targeted support for jobs in the aviation sector a number of times. The sector would be viable if not for the impact of coronavirus, but in my constituency easyJet, Tui and Luton Airport have already been forced into making redundancies due to the lack of Government support. Can the Chancellor explain why the Government waited until a week after the deadline passed for consultation on large redundancies caused by the end of the coronavirus job retention scheme to announce its replacement?

[Rishi Sunak]

Our response will continue to evolve as the circumstances demand. With respect to aviation, I have every sympathy for companies and employees in that sector; obviously, they have been very hard hit. The measures that we have put in place have made a significant difference to businesses in that sector. Indeed, I think that one of the ones the hon. Lady mentioned is among the many that have accessed some of our much larger loan schemes to provide vital liquidity at a very difficult time, and I know that many businesses in the aerospace supply chain will particularly welcome the part-time working job support scheme we have announced today, as it will be particularly well suited to their manufacturing businesses.

[Peter Aldous (Waveney) (Con)]

I welcome the Chancellor’s statement. His stamp duty holiday, which is due to expire on 31 March, has been extremely successful in stimulating an important part of the UK economy. What plans does he have for further housing initiatives, which will not only generate business activity but, if properly focused, also alleviate poverty and promote social mobility?

[Rishi Sunak]

My hon. Friend is absolutely right to say that the stamp duty cut is driving activity in the housing market, which is helping to protect jobs in that sector. I would point him to our green homes grant, which the Department for Business, Energy and Industrial Strategy is going to roll out shortly and which will provide households with a grant of up to £5,000 to subsidise initiatives to improve the insulation and energy efficiency of their homes. There will be larger grants available for those households most in need, as determined by their local authorities, helping them not only to save on carbon emissions but to save up to £300 a year on their energy bills.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

We talk about a green industrial revolution and the Chancellor talks about job protection, yet just last week, Scottish yards missed out on the procurement contracts for the Seagreen offshore wind project. In terms of real job creation, will he consider the Scottish Government’s plea for an £80 billion UK stimulus? Will he also confirm when the national infrastructure strategy and the energy White Paper will be published and, crucially, will he instruct officials to look at how the contracts for difference process works and change it so that it incentivises the use of UK supply chains?

[Rishi Sunak]

The hon. Gentleman is absolutely right about the importance of offshore wind to our economy. It is something that we have a global strategic competitive advantage in, and this Government will continue to support the sector in the way that we have. I am always open to new ideas about how to do that, but we must ensure that we double down on our advantage and drive jobs in every part of our country, not just in Scotland but in the north-east, where we have considerable advantages over other countries, not just in providing energy but now in manufacturing more of the content that goes into our turbines.

[Jacob Young (Redcar) (Con)]

I thank my right hon. Friend for his statement. Does he agree that, as the coronavirus is now threatening our recovery, it is right that we focus our support on the problems that businesses in Redcar and Cleveland and elsewhere are facing right now? Support for viable businesses and viable jobs through a time of depressed demand due to the restrictions that virus threatens is exactly what the new job support scheme delivers.

[Rishi Sunak]

My hon. Friend is absolutely right. He knows all too well what the businesses in his constituency need, which is support to get through this period of depressed demand. They need our support to protect those viable jobs and to help them get through to the other side, and that is exactly what the job support scheme will deliver.

[Stephen Farry (North Down) (Alliance)]

It is right that the economic support schemes evolve, and this will be a lifeline for many people in Northern Ireland. The Prime Minister has talked about embracing everyone and the need for creativity and innovation, but surely there are two gaps in today’s announcements: first, the excluded; and secondly, the companies where even paying a third of the wages is not a viable option at this time even though they do have sustainable futures, such as in the arts and creative industries and aerospace.

[Rishi Sunak]

In terms of the arts and creative industries, we have provided over £1.5 billion of funding to support vital institutions in every part of the United Kingdom through that scheme, but it is important now that support is focused on companies that can provide viable jobs, with a genuinely secure future for their employees. As we have set the scheme, it is very similar to those around the world and gets that balance right, being generous with our support but also making sure that support is targeted where it can do the most good.

[Joy Morrissey (Beaconsfield) (Con)]

I thank my right hon. Friend for listening to Members’ concerns about small businesses and the self-employed and for taking the time to engage with us and hear our concerns. In Beaconsfield, we have 4,000 people who have already benefited from the Government’s self-employed income support scheme, protecting their livelihoods. I therefore welcome today’s announcement that we will continue the support for the self-employed, through a further extension in the grant, and continue our unprecedented support for both the employed and self-employed. May I invite him to Marlow to see all the good work that he has done through his schemes?

[Rishi Sunak]

I am very happy to take up my hon. Friend’s invitation. She is right to highlight the very comprehensive support that we have put in place for the self-employed. Compared with almost any other country anywhere in the world, it is more comprehensive, generous and has lasted for far longer than one can find elsewhere.

[Christine Jardine (Edinburgh West) (LD) [V]]

[Inaudible.]

--- Later in debate ---

[Rishi Sunak]

I welcome my right hon. Friend’s comments. He knows better than most what a difference our welfare system and, indeed, the Department for Work and Pensions and its phenomenal staff can make on the ground. I know that he will join me in welcoming not only the increase, temporarily, that we have put on universal credit for this year, providing almost £1,000 extra to those who are in receipt of it, but our further increases in and generosity with the local housing allowance and the provision of hardship funds to those struggling to pay their council tax bills, distributed through local authorities. In some areas, that represents a significant amount of support for the most vulnerable in our society—a point that was borne out in the distribution analysis that we published this summer, which showed that the most vulnerable in our society had benefited the most from our support.

[Stephen Timms (East Ham) (Lab)]

On universal credit, the Chancellor rightly, at the start of the pandemic, suspended the minimum income floor in universal credit to avoid an unnecessary barrier to new self-employment. Given his welcome announcements today, will he extend the duration of that suspension beyond the middle of November, when it is currently due to end?

[Rishi Sunak]

Decisions on the exact operation of our welfare system are for the Secretary of State for Work and Pensions, but I will happily reflect on the point that the right hon. Gentleman makes. He is right that that has made a significant difference in the early stage of this crisis, but as we go through it, we will make sure that we adjust and tailor our support to match the needs of the moment.

[Madam Deputy Speaker]

Let us see whether we can go back to Christine Jardine.

[Christine Jardine [V]]

I hope that you can hear me this time, Madam Deputy Speaker. 

I thank the Chancellor for early sight of his statement, which I cautiously welcome, to the extent that he has listened to calls from Liberal Democrats to extend furlough and create some flexibility based on the German Kurzarbeit model, but what about the 3 million people who have had no support for six months and will still be excluded from financial help? Where are the job creation plans to tackle unemployment and for those who cannot work for a third of the time? Where are the incentives for manufacturing and industry to invest in this country and create new jobs—the green revolution—allowing us to compete with our European neighbours, who are already moving ahead of us?

[Rishi Sunak]

In terms of ensuring that we are winners in the green industrial revolution, I point the hon. Lady to measures that we already announced in the Budget to provide significant support for initiatives such as carbon capture and storage and the construction of a charging infrastructure fund, to build more charging points across the United Kingdom. Such measures will make an enormous difference, on top of our commitment to double our research and development spending over the next few years, ensuring that businesses across the UK can play a leading role in driving our progress towards meeting our climate targets and creating new jobs in the process.

[Nickie Aiken (Cities of London and Westminster) (Con)]

I warmly welcome the Chancellor’s statement, particularly the extension of the 5% VAT rate to next March. I know that many of the hospitality businesses in my constituency will welcome that as they grapple with the loss of tourists and office workers. Many are reporting that trading is at 20% of normal levels. Will he agree to meet me and representatives of theatres and the hospitality and retail sectors to discuss what further measures we can take to support the west end’s recovery?

[Rishi Sunak]

My hon. Friend is right. I know that she has spent a lot of time focused on this issue, and businesses in her constituency are facing an especially hard time. I would be delighted to meet her and them to see what more we can do to support them.

[Chris Bryant (Rhondda) (Lab)]

I used to be a curate, so I recognise a curate’s egg when I see one. This is good, but only in parts. The truth is that lots of people’s jobs are only unviable because of the virus and Government restrictions—I am not attacking the Government for that, but that is the simple truth. We therefore have a moral duty to try to help those people to survive, with proper livelihoods into the future. That especially applies to the aviation industry and the hospitality industry in my patch. I hope that the Chancellor will be able to say something more about specific grants, not just loans, for businesses that are sorely affected.

The Chancellor still has not answered the question about the 3 million people who got nothing earlier this year. Perhaps there was something hidden in what he said about the self-employed that means more people will get support this time, but he must have had constituents contact him, as I have. Finally, I wrote to him on 23 February—214 days ago—about the massive flooding in south Wales. He has not yet replied. A tip has fallen into the river. Can he visit the Rhondda and see the problems that we have? We really need financial support. The Prime Minister has promised that an answer is coming quickly, but we have still not had it—or the Chancellor could just send a cheque.

[Rishi Sunak]

I apologise to the hon. Gentleman; I will find his correspondence as soon as I can and get him the reply that he deserves. I do not think I disagree with him. It is right that we focus our support on viable jobs. Those jobs are, in part, not viable because of the restrictions. The balance that we have to get right is in understanding that we will be dealing with this virus for a while to come—it is not here and then gone. That changes what our support should do. We have to focus it on those with a genuine prospect of employment, and I think the job support scheme gets that balance right. It is generous and flexible. With regard to hospitality, which is important to his constituency, I know that the industry will warmly welcome the extension of the VAT cut into the spring.

[Lucy Allan (Telford) (Con)]

The Chancellor has shown himself to be nimble and agile throughout this crisis. I congratulate him on his statement and his recognition that we must adapt and evolve and can no longer put our lives on hold. I particularly welcome the measures to support hospitality and the 5% VAT rate extension. The fantastic Telford International Centre for businesses and conferences brings in 300,000 people every year, but its turnover is now zero. Will he continue to do all he can to support the events industry, which is so important to my town?

[Rishi Sunak]

I thank my hon. Friend for her comments, and she is right: the Government must respond with agility as the virus and our economy evolve over the coming weeks and months, and we will continue to do that. I very much sympathise with her and those in the events industry, given the difficulties they are experiencing. I know that conversations are ongoing with the Business Secretary about what can be done to best ensure that, at some point in the future, we can return to what we all want, which is the thriving industry her constituency wants to see.

[Ben Lake (Ceredigion) (PC)]

The Chancellor mentioned that the existing self-employed support grant will be extended on similar terms and conditions to the new jobs support scheme, but can he tell the self-employed in rural areas such as Ceredigion, who represent almost 30% of the workforce, whether he has changed the terms and conditions in such a way as to ensure that those who have been excluded from support so far will now get the help they deserve?

[Rishi Sunak]

The eligibility conditions will remain as they are, with refinements to make sure that businesses are still trading over the winter and to recognise that they have suffered and are suffering an impact on revenues through coronavirus. The reasons for those eligibility criteria are well documented and have been discussed in this House many times, so I will not recap exactly why they are there, but it is worth bearing in mind that the extension of this support means that we have provided more support to 2.5 million self-employed people, which is considerably more than any other country has and for a longer duration.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

I welcome the significant and wide-ranging package that my right hon. Friend has introduced, and I want to focus on one element of it, cash flow, which is always a critical issue for businesses. Bounce back loans have been used by over 1 million companies across the UK, including 1,794 in Harrogate and Knaresborough, which have taken out loans worth more than £51 million. I therefore welcome the new pay as you grow scheme, which means that businesses will now enjoy greater flexibility to repay their loans over a longer period. Does my right hon. Friend agree that that will be of great value to businesses and that extending the terms to 10 years will halve the average monthly repayments?

[Rishi Sunak]

My hon. Friend knows from his own business career the importance of cash flow, and he is absolutely right. He mentioned the almost 2,000 businesses in his constituency; on average, they probably took a bounce back loan of about £30,000. This extension to 10 years will reduce the average monthly repayment from something over £500 to just around £300, which will provide thousands of pounds of cash-flow relief to his 1,800 businesses, but also to 1 million others around the United Kingdom.

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

As we have heard, around 3 million people across the country were excluded from support during the first stage of the pandemic. Yesterday I was contacted by a wedding photographer in my constituency who is struggling to pay his mortgage and feed his family, and the prospect of many more months of uncertainty is terrifying for him and many others in similar industries and sectors, such as event planning, that are unable to operate in anything like normality at the moment. What assurances can the Chancellor offer that the measures he has announced today will not continue to exclude people such as my constituent and many more across the country?

[Rishi Sunak]

The hon. Gentleman mentioned mortgages, and I am sure his constituent, like many others, will have benefited from the mortgage holidays that we put in place, which my hon. Friend the Economic Secretary helped to organise with the banking system. Those provided six months of mortgage holidays for people, and, indeed, one in six mortgages across the UK was able to benefit from that generous scheme.

[Dame Cheryl Gillan (Chesham and Amersham) (Con) [V]]

May I also congratulate the Chancellor on today’s groundbreaking announcements and particularly on focusing support on viable jobs and ensuring that support goes where it is most needed? The extended guarantee on CBILS, as well as pay as you grow and the measures on VAT, will be warmly welcomed by individuals and businesses in Chesham and Amersham. However, does my right hon. Friend remember the Micawber principle:

“Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

What can he say to my constituents who ask how we are going to pay this enormous bill, and how can he ensure that we provide value for money for the taxpayer?

[Rishi Sunak]

My right hon. Friend is absolutely right and I am grateful to her for her instruction on the fiscal maths that we are grappling with! As we move our way through this crisis, the nature of our response has to change. It is simply not sustainable or affordable to continue to provide the level of support that we gave at the beginning of this crisis. That is why our support is now targeted and focused on where it can make the most difference. That will mean that we cannot do absolutely everything that everybody needs at once, but we will be able to focus it on where it can make the most difference, so that, as quickly as possible, we can get our economy growing again and ensure that the maths my right hon. Friend outlined starts to work in our favour. We cannot borrow at this level forever. We must get our borrowing back under control and eventually get our debt falling again.

[Janet Daby (Lewisham East) (Lab) [V]]

I welcome the Chancellor’s statement. Almost 700,000 people lost their jobs between March and July. What is the Government doing to support these people, because the use of food banks has in some cases tripled? What will the Government do to support those who will lose their jobs in the months to come, to help them during any period of unemployment, and to get them back into work as quickly as possible?

--- Later in debate ---

[Rishi Sunak]

The hon. Lady is absolutely right: it is a tragedy that 700,000 people have already lost their jobs and many more will. Our focus should be, and is, on finding fresh, new opportunities to provide them with the security that they and their families so desperately need. That is why we have provided incentives for companies to take on new staff through our apprenticeship scheme. We have also provided incredibly intensive support through the Department for Work and Pensions, through a doubling of the number of work coaches and greater wraparound support to help all of those people mentioned to plot their course and chart a better future for themselves.

[Nicola Richards (West Bromwich East) (Con)]

The new jobs support scheme rightly focuses on protecting employment and preserving viable jobs during a period of depressed demand. Businesses and workers in West Bromwich East will be extremely grateful for that. Does the Chancellor agree that it is also fair that the scheme targets those businesses that need it most, and will he set out how the scheme is deliberately targeted in that way? Will he also join me in visiting the incredible Red Lion Desi pub, to hear how it has benefited from the eat out to help out scheme?

[Rishi Sunak]

My hon. Friend is absolutely right about the nature of our support at this phase in our recovery. In a couple of different ways, this support has evolved in the way she said. It is targeted at those larger businesses that really need it, whose revenue has declined, and it is targeted specifically at protecting and supporting viable jobs—those jobs where there is work to do but the company is facing a period of repressed demand. This is a scheme that will make an enormous difference to those people, but in a targeted and effective way.

[Neil Gray (Airdrie and Shotts) (SNP) [V]]

From talking in July about “nobody left behind”, to accepting today that so-called “unviable jobs” will be lost, the Chancellor has failed to live up to his own rhetoric. The viability of these jobs is in large part dependent on entirely necessary Government restrictions, and it is disappointing that he continues to abandon the 3 million excluded from support. Given that he now accepts further widespread job losses, why has he not made permanent the temporary £20 per week universal credit uplift and expanded it to legacy benefits?

[Rishi Sunak]

The temporary increase in universal credit already lasts all the way through to the end of March next year. For those who are most vulnerable, as I have said previously, we have provided significant enhanced support through the welfare system, including almost £1 billion of extra investment in local housing allowance, to help with private rent payments, and a hardship fund, to help people who are struggling to pay their council tax bills. As our analysis showed in the summer, the interventions that this Conservative Government have made over the past several months have made the most difference to those on the lowest incomes.

[Sajid Javid (Bromsgrove) (Con)]

I know what it is like to have to postpone a much anticipated Budget, but I am pleased to see that it has not prevented my right hon. Friend from doing whatever it takes to protect the economy. Since the onset of this crisis, he has shown the decisiveness, resilience and creativity that the country needs right now, and I commend him for it. I know that he values infrastructure investment and knows that it is going to form an important part of our recovery, so may I urge him to publish the national infrastructure strategy, which has been delayed time and again, as soon as he possibly can, so that we can get on with levelling up across our great country?

[Rishi Sunak]

I thank my right hon. Friend, who is a very good friend of mine, for his warm comments. Whatever I have been able to do over the past several months is in no small part thanks to the instruction that he has given me when he was my boss in not one, but two different Department jobs. He is absolutely right about the importance of infrastructure investment, and he was one of the first people to talk passionately about the need to increase significantly the amount of money that the Government invest in the UK’s infrastructure. It was he, as Chancellor, who put in place the infrastructure revolution, and I can commit to him that I will absolutely deliver on that. He is right that we must publish the national infrastructure strategy; we will do so this autumn.

[Madam Deputy Speaker (Dame Rosie Winterton)]

In order to allow the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I am suspending the House for three minutes.

Oral Answers to Questions

Rishi Sunak Excerpts

Tuesday 15th September 2020 Commons Chamber

[Joanna Cherry (Edinburgh South West) (SNP)]

What fiscal support he is providing to mitigate the economic effects of the covid-19 outbreak.

[The Chancellor of the Exchequer (Rishi Sunak)]

We have provided unprecedented support worth more than £190 billion to protect public health, businesses and jobs, and the Government remain committed to supporting the economy throughout this crisis. In July, we published our plan for jobs, which announced further support for the economy, with initiatives such as eat out to help out, the £2 billion kickstart scheme and the £9 billion job retention bonus, all of which aim to support, create and protect jobs.

[David Linden]

I hear what the Chancellor says, but emergency food parcels for children are up 107% this year and the Trussell Trust now expects to distribute 300,000 more than expected in the fourth quarter. Given that there is a hard Tory Brexit on the horizon and the end to the furlough scheme will certainly push more people into poverty, will the Chancellor do the right thing, adhere to his moral duty and make the £20-a-week increase to universal credit permanent?

[Rishi Sunak]

Throughout this crisis we have endeavoured to make sure that the most vulnerable in our society get the help that they deserve, which is why results published in July showed that our interventions have meant that those on the lowest incomes have received the most support, through the temporary increase to universal credit, the hardship fund delivered through local councils and, indeed, increases to the local housing allowance to help people with their rental payments.

[Joanna Cherry]

The events and conferences industry was the first to be affected by lockdown and will be the last to see demand return. Many freelancers, such as my constituent Karen Colvin, have not benefited from support in the same way as other workers. Does the Chancellor have anything new to offer to people such as her?

[Rishi Sunak]

Many self-employed people have received the second of the self-employment income support grants—almost 3 million people have now received support through that scheme—but the hon. and learned Lady is right that the best way to provide support for people in that industry is slowly and safely to reopen those bits of our economy. My colleague the Secretary of State for Digital, Culture, Media and Sport Secretary of State is engaged with that industry to start piloting the return of business conferences and events. The situation remains under review.

[Mel Stride (Central Devon) (Con) [V]]

My right hon. Friend has done a tremendous amount to support jobs in our country, but does he agree that many thousands, perhaps even hundreds of thousands, of jobs are going to be viable after covid is dealt with but will not make it unless they are provided with further targeted support after the end of October?

[Rishi Sunak]

As ever, I am grateful for the advice from my right hon. Friend. He is right that businesses do need support, which is why many of the interventions that we have put in place—for example, the business rates holidays and, indeed, our support for the economy and jobs through initiatives such as our stamp duty cut to catalyse the housing market—last through to next year. I hope he will be reassured that throughout this crisis I have not hesitated to act in creative and effective ways to support jobs and employment, and I will continue to do so.

[Alison Thewliss (Glasgow Central) (SNP)]

Many employees, self-employed people and freelancers in sectors such as hospitality, aviation, tourism, showpeople and the arts cannot go back to normal because of the public health measures brought in by the Chancellor’s Government, so will he examine the calls by the Treasury Committee to consider a targeted extension of support for those sectors? If not, why?

[Rishi Sunak]

The hon. Lady mentions hospitality and tourism, which is an industry disproportionately represented in Scotland. That is why the Government took steps in the summer to support the industry, with a temporary VAT reduction from 20% to 5% and, indeed, the eat out to help out initiative, both of which were targeted at helping to protect the 2 million jobs and 200,000 businesses engaged in the industry.

[Alison Thewliss]

That is woefully inadequate, as we head into the winter, for many of these industries that have already suffered with a low income. The Chancellor said that he would do “whatever it takes” and that

“if the situation changed”,

he

“would not hesitate to take further action.”

Those excluded from support schemes, the 700,000 made redundant since March and those losing their jobs because of the premature ending of the furlough scheme want to know whether the Chancellor will be true to that commitment or his words are worth nothing.

[Rishi Sunak]

The hon. Lady claims that it was woefully inadequate; the VAT reduction was the single biggest ask from the UK hospitality industry. Not only was that delivered, but it was delivered with an extra initiative, eat out to help out, which proved to provide an enormous fillip to the reopening of that part of the economy. It is also worth bearing in mind that all the businesses engaged in that industry are not paying any business rates at all until March next year.

[Mr Richard Holden (North West Durham) (Con)]

What estimate he has made of the level of financial support that has been provided to employees by businesses under the coronavirus job retention scheme.

--- Later in debate ---

[Tracy Brabin (Batley and Spen) (Lab/Co-op)]

What assessment he has made of the financial effect of the covid-19 outbreak on people who were not eligible for either the coronavirus job retention scheme or the self-employment income support scheme; and if he will make a statement.

[The Chancellor of the Exchequer (Rishi Sunak)]

The Government have put in place a broad set of policies to support businesses and individuals through this crisis. The coronavirus job retention scheme and self-employment income support scheme have supported more than 9 million and 2.7 million jobs and people respectively. As the economy reopens, we must adjust our support to ensure that people continue to get back to work, protecting the UK economy and people’s livelihoods.

[Helen Hayes]

The Institute for Employment Studies is now predicting 450,000 redundancies over the three months to September and a further 200,000 by the end of the year—more than double the levels seen in the 2008-09 recession. Many of those whose jobs are at risk work in the creative industries, performing arts and hospitality, which would be thriving without coronavirus. Why is the Chancellor persisting with a cliff-edge approach, which will inflict the hardship and misery of unemployment on so many people, instead of taking a flexible approach to furlough to save good jobs for the long term?

[Rishi Sunak]

The furlough scheme, as it is currently constructed, is flexible. It was a key demand from business groups and unions, which we responded to. As the economy is slowly reopening over the late summer and autumn, the furlough scheme has adapted to that, allowing businesses to bring back their employees in a flexible fashion, and that is exactly what they are currently doing.

[Alun Cairns]

I congratulate my right hon. Friend on the introduction of the self-employment income support scheme in particular, but does he recognise that it cannot continue indefinitely? Does he also agree that the self-employed are some of the most innovative individuals in our economy, and it is time to release their innovation to kick-start us?

[Rishi Sunak]

My right hon. Friend is absolutely right. Now that we have begun to reopen the economy, it is right that our support becomes differentiated and the focus shifts to getting people back to work. It is not possible to sustain this level of intervention. I fully agree with him: those who are entrepreneurial and self-employed deserve our support, and they will continue to get it as we drive our recovery out of this crisis.

[Gerald Jones]

Hundreds of thousands of people across the country, including many in my constituency, have not been able to get support during this pandemic. The Government have repeatedly said that it is too difficult to get support to people who are not on the coronavirus job retention scheme or the self-employment income support scheme. The Government have had six months to put something in place, so will the Chancellor outline to the House what barriers exist now to getting support to the people who have so far been excluded?

[Rishi Sunak]

As I have said from this Dispatch Box, we have not been able to help absolutely everyone in the exact way that they would have liked, but that does not mean that support is not available. Through considerable increases to universal credit and local housing allowance, we have provided support to the most vulnerable. Through measures such as mortgage holidays, which one in six mortgage customers have taken up in the past few months, we have ensured that everyone, one way or another, can access some degree of Government support.

[Peter Gibson]

Over £33 million of bounce back loans have been granted to businesses in Darlington, but many businesses in my constituency bank with new start-up, online and challenger banks and have faced some issues with accessing bounce back loans. What steps is the Treasury taking to assist with access to bounce back loans for those who need them?

[Rishi Sunak]

My hon. Friend raises an important point, and we recognise the vital role that alternative lenders can play in providing finance to SMEs. We continue to work with them and the sector to see what more we can do. As he recognises, the bounce back loan scheme has proved enormously successful, and so far we have accredited 28 bounce back lenders, who have provided loans to more than 1 million businesses. In the first instance, I urge businesses in my hon. Friend’s constituency to look online at one of those 28 lenders, and see whether they can provide the loans that that business requires.

[Chi Onwurah]

The Chancellor, and all of us whose salaries have been paid throughout the pandemic, may find it difficult to grasp the deep sense of unfairness felt by those who, through no fault of their own, are entirely excluded from any support. Perhaps they followed their entrepreneurial dream and left a good job to start their own business, as encouraged to do by this Government, but did not file their tax returns in time. Perhaps they have an event business that has been left to fend for itself without any events. There are thousands of such people in my constituency alone. How can the Chancellor expect the country to come together to fight the virus when so many have been excluded from all support?

[Rishi Sunak]

I respectfully disagree with the hon. Lady. Most people in the country recognise that the Government have provided unprecedented support at this difficult time to millions of people, as well as to hundreds of thousands, if not millions of businesses. Although people may not have been able to get support in the exact way they would have wanted, across the spectrum, whether through the welfare system and local authorities, or through banks and the provision of credit, we have ensured that some form of support is available to the vast majority of the British public.

[Tracy Brabin]

It is now been six months during which 3 million self-employed people have been excluded and locked out of the coronavirus support schemes, and it is no coincidence that this week the Trussell Trust announced an unprecedented need for support. Nearly half of those people are first-time users, and if the forecasts are right, the situation will only get worse, with six emergency food parcels being delivered every minute as we get to winter. I implore the Chancellor to tell hon. Members what he will do to support those who are excluded, so that this disaster does not turn into a catastrophe for families around the country.

[Rishi Sunak]

The hon. Lady is slightly confused. On one hand she speaks about people who were not eligible for the self-employment scheme, but those who were excluded earned more than £50,000 and were in the top 5% of all earners, with an average median salary of £200,000. In the same question she speaks about targeting support to those who cannot afford food. She should figure out which issue she cares about.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

When the circumstances change, policies should adapt. Infection rates are growing, local restrictions are becoming more common, and this morning’s figures show levels of unemployment at a two-year high, and rising, particularly among the young. France and Germany have extended their employment support for a further year. Is it time to reconsider the jobs cliff edge that is approaching at the end of next month, and at least to extend employment support to those sectors that cannot yet go back to work, and areas hit by local lockdowns, so that businesses and workers are not punished for doing the right thing?

[Rishi Sunak]

The right hon. Gentleman is right to highlight the increase in cases, which is why the Government have taken steps to ensure that we remain in control in suppressing the virus. He talks about local lockdowns, and he will have seen the announcement last week about extra business rates support for businesses that find themselves in those areas, with a payment of up to £1,500 per three weeks of lockdown. He mentioned other countries. He is right about Germany and its scheme, but it is worth bearing in mind that Germany has had such a scheme, in co-operation with businesses and through its social security system, for more than a decade.

[Mr Speaker]

I call the Chair of the Public Accounts Committee.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

As you might expect, Mr Speaker, the Public Accounts Committee is already beginning the reckoning of costs, and there is a cost to the Exchequer from all those people who were self-employed, or employed on short-term contracts, and who received no support. Ultimately, the state still has to support those people, and no tax comes in from them. Will the Chancellor go back to the drawing board and consider the long-term issue of the cost to our country of not supporting people who have a good track record with HMRC and who could be supported? They have lived on fresh air for all these months.

[Rishi Sunak]

I hear what the hon. Lady says and will certainly reflect on it. I refer her to my response to the question from my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates) about the importance of a digital taxation system, which I know the hon. Lady’s Committee will have an interest in. As throughout this crisis, our ability to respond in the way that we would want to is often limited by the information that we hold. My right hon. Friend the Financial Secretary to the Treasury has put out a 10-year tax administration strategy that will ensure that our tax system collects in real time the information we need about people and businesses up and down this country, so that, should something like this happen again, the Government can respond in the way that they would want to, as quickly as possible.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

What discussions he has had with Cabinet colleagues on introducing an online sales tax.

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[Patricia Gibson (North Ayrshire and Arran) (SNP)]

If he will make a statement on his departmental responsibilities.

[The Chancellor of the Exchequer (Rishi Sunak)]

This Government’s comprehensive and generous package of support in response to the coronavirus has protected millions of livelihoods and supported hundreds of thousands of businesses up and down the country. Our plan for jobs announced in July will protect, create and support jobs, notably through our recently launched kickstart scheme, as we look to get the UK economy back on its feet.

[Patricia Gibson]

Scottish Government analysis has revealed that ending the transition period in 2020 could cut £3 billion from the Scottish economy over the next two years—on top of the impact of coronavirus. With the UK Internal Market Bill making the risk of a no-deal Brexit even greater, what reassurances can the Chancellor give to my constituents and the people of Scotland that there will be no real-term spending cuts that will inflict even greater damage on our economy?

[Rishi Sunak]

The Government and I remain committed to getting a deal and will continue to engage constructively with our European partners in pursuit of that aim. With regard to funding for Scotland, I can tell the hon. Lady that the Scottish Government have received £6.5 billion in advance of it being called for, so that they can provide the support required to their residents.

[Shaun Bailey (West Bromwich West) (Con)]

Innovation has been at the heart of the story of the Black Country for over 150 years—and nowhere is this more true than in companies such as Thomas Dudley in Tipton in my constituency and Stephens Plastic Mouldings in Oldbury. Given that these are the types of businesses that will help us as we come out of the pandemic, what work is my right hon. Friend doing with manufacturers and exporters in the Black Country, and with local stakeholders such as the West Midlands Combined Authority and West Midlands Mayor Andy Street, to show that they have the support they need to thrive and survive post pandemic?

[Rishi Sunak]

My hon. Friend is absolutely right. Manufacturing and exports, especially from the west midlands and the Black Country, will play a key part in driving our recovery. I am pleased to tell him that the Exchequer Secretary is shortly meeting with the Mayor, Andy Street. That comes on top of our plans to provide £1 billion to develop the UK supply chain for electric automotive vehicles over the next five years, and £850 million of allocations from the local growth fund for his region.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

The Chancellor will be aware of concerns that the UK risks a slower recovery than comparable economies for self-inflicted reasons. Despite the devastating impact on jobs, the Treasury Front Benchers have yet again today—six times—rejected targeted wage support. Economists are concerned about this Government’s inability to get a grip on the public health crisis, which evidence from the Scientific Advisory Group for Emergencies suggests stems in part from a failure to adequately support people who have to self-isolate. Rumour has it that the Chancellor is blocking attempts to improve sick pay, so I put it to him: can he put himself in the shoes of those low-paid workers who often have to choose between paying their rent and bills, and putting food on the table for their kids? If these workers are advised to self-isolate, they get £95.85 a week—and that is if they are even eligible for statutory sick pay. Surely the Chancellor must agree with the Secretary of State for Health that statutory sick pay is not enough to live on.

[Rishi Sunak]

From the beginning of this pandemic, we have made changes to the operation of statutory sick pay and our welfare system to ensure that those who are isolating in any circumstance receive support from day one, and that we improve flexibility, particularly for the self-employed, through the removal of the minimum income floor. As the hon. Lady knows, we are also trialling incentive payments in local lockdown areas.

[Anneliese Dodds]

I did not ask the Chancellor about the precise details of delivery and I did not ask about the scope; I asked him about the value of statutory sick pay. He needs to get a grip on this issue. If he fails to do so—and the blockage appears to be his responsibility—then we will see additional localised re-impositions of lockdown, with all the implications that has for jobs and businesses. Please, Chancellor, get a grip on this issue.

There are two other reasons why economists are worried about the UK’s recovery. First, of course, there is concern about our future as a trading nation. Both of the Chancellor’s predecessors warn that the threat to override the withdrawal agreement could damage our country’s reputation and prosperity. Why do those former Chancellors appear to be more concerned about our country’s economic prospects than the current one? The second reason for concern stems from the prospect of premature spending cuts or tax rises. According to the Financial Times, it is politics that could drive the Chancellor towards early tax rises, so will he rule them out for the rest of this year?

[Mr Speaker]

Order. I do want the Chancellor to answer, but we will have to shorten the questions.

[Rishi Sunak]

The hon. Lady talks about our place as a trading nation. She may have missed the news last week that this country has concluded an enhanced free trade agreement with Japan. I pay enormous tribute to my right hon. Friend the Secretary of State for International Trade for concluding a deal that will be better for British businesses, particularly in the areas of the economy we do so well on such as digital and services. It will protect more of our great agricultural produce, open up more markets for our businesses to sell to and reduce prices for British shoppers. That is what the future of global Britain looks like.

[Joy Morrissey (Beaconsfield) (Con)]

I thank my right hon. Friend for his support for local businesses in Beaconsfield and across the UK. What provision or safety net is he creating for local businesses that may be affected by lockdowns across the country?

[Rishi Sunak]

My hon. Friend makes an excellent point and I thank her for it. She will know that some of the interventions we have already put in place last through into next year, for example the removal of the need to pay business rates for businesses in hospitality, which has been particularly affected. She may be reassured to know that we recently introduced the new business support grant for businesses forced to close as a result of local lockdown, where the Joint Biosecurity Centre gold command has instituted that measure, and those grant payments will be available up to £1,500 per few weekly cycles.

[Sammy Wilson (East Antrim) (DUP)]

  The aviation industry is on its knees: airports are deserted, planes are grounded and travellers are frustrated. In large part, the plight of the industry is due to the inconsistent, illogical and contradictory policies being followed by the Government to attack coronavirus. Will the Chancellor consider what actions he can take to support this vital industry, which we depend on for our connectivity, by either reducing or suspending air passenger duty, or through targeted job support?

[Rishi Sunak]

The right hon. Gentleman is absolutely right to highlight the importance of the aerospace industry to our economy. It is, in common with aerospace industries across the globe, suffering a deep depression in demand for all the obvious reasons. He can rest assured that we engage regularly with the companies in that sector. In particular, to support their future success, we are investing heavily in R&D alongside those companies to make sure we remain on the cutting edge of advanced manufacturing capability.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

  Does my right hon. Friend agree that the benefits of the Government’s tax-free childcare scheme, which gives eligible families a 20% contribution to the cost of childcare and works alongside the 30 hours funded childcare that is available to working families, cannot be overstated as the economy reopens to my constituents and across the UK?

[Rishi Sunak]

My hon. Friend is absolutely right to highlight the importance of good childcare and he is right to highlight that the Government support people with 20% of their childcare costs up to a cap of £2,000 through tax-free childcare. I can also tell him that, in recognition of the importance of this issue, we made some adjustments to how tax-free childcare operated during the pandemic, so that if someone’s income fell below the minimum income requirement as a result of what was happening they would continue to receive financial support up until the end of October.

[Derek Twigg (Halton) (Lab)]

At the end of August in my constituency, there were 2,000 more people unemployed than there were in March. The number of 18 to 24-year-old claimants has almost doubled. If history teaches us anything, it is that young people and those living in deprived areas will be more adversely affected by any downturn in the economy. What special measures is the Chancellor considering putting in place for young people in areas like mine, which are the most deprived?

[Rishi Sunak]

The hon. Gentleman is absolutely right to highlight the disproportionate economic impact that this crisis will have on young people. I have spoken about that from the Dispatch Box before, and he is right that we should focus our attention on them. That is why, in our plan for jobs, we outlined the kickstart scheme, which will initially make available fully-funded Government job placements for a quarter of a million young people at risk of long-term unemployment. I am confident that many young people in his constituency, like all of ours, can benefit from that scheme, and I urge him to work with his local businesses to get them signed up to the scheme and take on a young kickstarter.

[Craig Whittaker (Calder Valley) (Con)]

  I recently had the pleasure of visiting Smart Display, a great Calder Valley business in the events and exhibitions sector, which supports over 28 employees. While it praises the sterling work done by my right hon. Friend to support businesses through furlough, CBILS—the coronavirus business interruption loan scheme—and rate relief, many businesses in its sector were among the first to close and will be the last to reopen, with many exhibitions not planned until next year. Can my right hon. Friend take this into serious consideration during the Budget process to see what additional measures he could take to support these businesses, which are the hardest hit financially by the pandemic?

--- Later in debate ---

[Rishi Sunak]

It is right that companies pay the tax that they owe the Exchequer so that we can fund the public services that all our constituents rely on. That is why this Government instituted the digital services tax for online companies, which came into force this year. We remain committed to that tax, although we work with our partners around the world to replace our unilateral one with a multilateral solution through the OECD that will properly tackle this issue once and for all.

[Mark Pawsey (Rugby) (Con)]

Businesses in Rugby and Bulkington have told me universally how they welcome the measures that the Government have introduced for their speed and their breadth, but they know that the coming months will be difficult for trading and there are tough times ahead. Which of the Government’s measures, given limited resources, does the Minister think are the most appropriate to support businesses over the next few months?

Office for Budget Responsibility: Economic and Fiscal Forecast

Rishi Sunak Excerpts

Friday 11th September 2020 Written Statements

[The Chancellor of the Exchequer (Rishi Sunak)]

Today I can inform the House that I have asked the Office for Budget Responsibility (OBR) to prepare an economic and fiscal forecast to be published in mid to late November.

[HCWS447]

OBR 2020 Fiscal Sustainability Report and response to OBR 2019 Fiscal Risks Report

Rishi Sunak Excerpts

Tuesday 14th July 2020 Written Statements

[The Chancellor of the Exchequer (Rishi Sunak)]

Today’s publication of the Office for Budget Responsibility’s (OBR) 2020 Fiscal Sustainability Report (FSR) fulfils the OBR’s legal obligation to publish an analysis of the sustainability of the public finances over the long-term and an assessment of the public sector balance sheet at least once every two years. This report has been laid before Parliament today and copies are available in the Vote Office and Printed Paper Office. The OBR also produces a biennial fiscal risks report (FRR) to which the Government are required to respond within a year. This statement provides the Government’s response to Office for Budget Responsibility—Fiscal risks report July 2019 [CP131], laid 18 July 2019^[1].

The action the Government have taken in response to the covid-19 pandemic was necessary to protect public health, support household incomes, and to minimise permanent damage to the economy—thereby supporting growth, employment and the public finances over the medium to long term. As the OBR has said in the FSR:

“The outlook would have been much worse without the measures the Government have taken. These have provided additional financial support to individuals and businesses through the lockdown. They should also help to limit any long-term economic scarring, by keeping workers attached to firms and helping otherwise viable firms stay in business”.

OBR 2020 fiscal sustainability report

The magnitude and duration of the economic shock caused by covid-19 will have important consequences for the medium and long-term fiscal position. In all three scenarios the OBR has published in the FSR, the level of borrowing this year is significantly higher than expected in the OBR’s spring Budget forecast. Public sector net borrowing is projected to reach between 13% and 21% of GDP in 2020-21, with differences across scenarios reflecting the size of the economic shock. This in turn means that public sector net debt is also projected to be higher compared to the spring Budget forecast under all scenarios, although the OBR has highlighted that low borrowing costs help to make this more affordable in the near-term. The gilt market is deep and liquid with a good track record in responding smoothly to increases in gilt supply. Underlying demand for the UK’s debt remains strong, with borrowing costs at historical lows, signalling confidence in the UK’s institutions.

The Government have taken significant action to support the recovery and minimise permanent damage from the pandemic. In the long-run, the OBR also expects demographic change and other cost pressures in health spending to put upward pressure on public spending while leaving revenues broadly unchanged. The Government are committed to fiscal sustainability and ensuring the long-term health of the public finances. The Government will set out further details on their plans to put the public finances back on a sustainable footing over the medium-term at the next Budget, alongside an updated OBR forecast. As part of this, as set out in the March Budget, HM Treasury is reviewing the UK’s fiscal framework to ensure it remains appropriate for the macroeconomic context, while ensuring the sustainability of the public finances. The FSR provides important analysis and scenarios which will be used to inform this review.

Managing fiscal risks from covid-19

In July 2019, the OBR published its second fiscal risks report covering the main risks to the public finances at that time. With covid-19 now clearly the most significant immediate source of fiscal risk facing the UK, this response to the report focuses on how the Government are managing the fiscal risks associated with the pandemic.

The work of the last 10 years in bringing borrowing and debt back under control means that the UK was well-placed to respond to the immediate and long-term challenges posed by covid-19.

The Government acted quickly to implement interventions containing the initial economic shock from the pandemic. When designing these interventions, the Government drew on the experience gained from HM Treasury’s Balance Sheet Review^[2] and international best practice^[3] to ensure that fiscal risks are managed effectively. The IMF commended the Government’s powerful response to the initial shock of covid-19, finding the interventions to be large, substantial and carefully targeted^[4].

In the first phase of the economic response to covid-19, the Government kept people attached to their work, protected their incomes and supported businesses, delivering one of the most generous and comprehensive packages of support globally, with a fiscal response totalling £160 billion. While the economic impacts of covid-19 and the Government’s necessary response have come at a significant fiscal cost, the costs of failing to act to support public services, businesses, and workers would have been much higher.

Building on the action taken in the face of the immediate threat posed by the virus, the Government are now proceeding with the second phase of their response, supporting the UK’s economic recovery while continuing to prioritise people’s health. The plan for jobs announced last week, made up to £30 billion available to help kick-start the nation’s economic recovery while continuing to prioritise people’s health by: introducing a new job retention bonus to encourage firms to keep on furloughed workers; supporting jobs with direct help to find work and to gain the skills people need to get a job; protecting jobs in the hard-hit hospitality and accommodation sectors and at attractions by supporting demand for these businesses, giving them confidence to reopen; creating jobs with action to get the property market moving, to increase and bring forward infrastructure investment, and to make homes greener, warmer and cheaper to heat.

The third phase of the Government’s plan will be set out in the autumn with measures to support the longer-term recovery through a Budget and a spending review. These will detail further plans to invest in public services, to support innovation and growth-enhancing infrastructure with a national infrastructure strategy, to seize global opportunities and to level up opportunity across every region and nation of the UK.

Wider fiscal risk management

While the immediate focus of Government action is on dealing with covid-19, the management of the wider risks facing the UK public finances remains important. The Government have acted to address a number of the risks that were discussed by the OBR in FRR 2019.

To address the long-term challenge of low productivity growth, Budget 2020 announced measures investing in UK infrastructure, backing tech and innovation, making tax changes to support firms to invest, and introducing measures to support a dynamic and competitive economy. The Prime Minister also announced on 30 June that we will be improving the quality, speed and efficiency of delivering infrastructure through a new infrastructure delivery taskforce named Project Speed.

In the longer-term, climate change remains a significant challenge for the wider public finances. Demonstrating the Government’s commitment to mitigating climate change, in November 2019, the Chancellor launched an HM Treasury review into how the transition to net zero greenhouse gas emissions will be funded and where the costs will fall. Spring Budget allocated £640 million for tree planting and peatland restoration, over £1 billion for ultra-low emission vehicles and introduced tax measures to encourage greater energy efficiency and reduce plastic waste. The UK is also increasing its international climate finance support for developing countries to at least £11.6 billion. To improve the UK’s climate resilience, the Government announced a doubling of investment in flood and coastal defences in England to £5.2 billion over the next six years. The devolved Administrations will benefit from the Barnett consequential of this substantial increase in Government investment in flood and coastal defences.

To manage risks associated with non-bank financial intermediation and increase the resilience of the UK financial system, in the remit for the Financial Policy Committee (FPC), HMT recommended that the FPC publishes a detailed assessment of the oversight and mitigation of systemic risks from the non-bank sector. The FPC has confirmed it will publish preliminary findings in the August financial stability report, followed by a more detailed report that outlines gaps in non-bank resilience and potential measures that may be taken to increase resilience.

The OBR also highlighted fiscal risks related to tax reliefs. The Government recognise the need to monitor and evaluate existing tax reliefs; the Government will continue to monitor their use and act where appropriate, for example through the recent reforms to Entrepreneurs’ Relief, and the planned changes to the entitlement to use red diesel. HMRC is committed to increasing the number of published costs of tax reliefs and in May 2020 published cost estimates for another 47 non-structural tax reliefs. HMRC will continue to build on this to increase transparency.

^[1] https://obr.uk/frr/fiscal-risks-report-july-2019/

^[2] The Balance Sheet Review (BSR) was launched in 2017 to identify opportunities to dispose of assets that no longer serve a policy purpose, improve returns on retained assets, and reduce the risk and cost of liabilities.

^[3] https://www.imf.org/en/Publications/SPROLLs/covid19-special-notes

^[4] https://www.imf.Org/en/News/Articles/2020/04/14/tr041420 -transcript-of-april-2020-world-economic-outlook-press-briefing.

[HCWS364]