Financial and Social Emergency Support Package

Sarah Jones Excerpts

Wednesday 25th March 2020 Commons Chamber

[The Financial Secretary to the Treasury (Jesse Norman)]

It is a privilege to return to the Dispatch Box for the third time in two days, and I can only pay tribute to your fortitude and resilience in being in the Chair for much of the time I have been at the Dispatch Box, Madam Deputy Speaker. I am opening this debate on behalf of the Government and I would like to pay tribute now to the right hon. Member for Islington North (Jeremy Corbyn), in case this is his last appearance at the Dispatch Box as Leader of the Opposition. May I also associate myself with the very warm comments that he and others have made about Tristan Garel-Jones, who was widely loved and admired across this House?

I thank the Opposition and the leadership of the other political parties for their constructive and supportive approach over the past few weeks, which is reflected across the House. Truly, these are extraordinary times. Our country has not faced a threat of this magnitude since the second world war. It is astonishing to think that it was just two weeks ago today that my right hon. Friend the Chancellor of the Exchequer delivered his first Budget, standing at this Dispatch Box. I can say from direct personal experience that the Chancellor, Her Majesty’s Treasury and Her Majesty’s Revenue and Customs officials have worked around the clock before and since that time. Our single goal has been to do whatever it takes to support the British people at a time of crisis.

That Budget laid the foundations for a coherent, comprehensive and co-ordinated plan to limit, mitigate and address the impact of coronavirus, with a £12 billion package of support for public services, businesses and individuals. It was an unprecedented intervention by this or any recent Government, yet it has proved to be—and how—merely the first step. From the outset of the crisis, the Government have been clear that they are ready to do whatever it takes. Last week, we announced further support for businesses and individuals, including a £330 billion package of business loan guarantees. Only yesterday, I took through the House the Contingencies Fund Bill, which increased the cash-flow financing to Departments to £266 billion, pending the main estimates.

[Sarah Jones (Croydon Central) (Lab)]

There are reports that the announcement about the self-employed will be made on Thursday, when the House will not be sitting. Will the Minister guarantee that there will be some mechanism for us to question and prod the Government and get responses about the announcements that will be made when we are no longer here?

[Jesse Norman]

I thank the hon. Lady for her question. She will be aware, as we all are, of the issue relating to the self-employed. The Prime Minister and the Chancellor said that we will come forward with a package shortly. The House will rise by, I think, the common assent of all the political parties and in the knowledge that it is in the face of a crisis. When such a package is brought forward, there will be ample opportunity to debate and discuss it in the House when it returns. Before that, the Government will be held to account in the public square in the usual way, and Ministers are available for direct interrogation by any Member of Parliament who wishes to contact them.

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[Jesse Norman]

I cannot comment, obviously, on the specific circumstances that the hon. Gentleman describes, but I can certainly say that the Economic Secretary to the Treasury is working very closely with the banks to make sure that no business is forced to close as a result of coronavirus.

[Sarah Jones]

Will the right hon. Gentleman give way?

[Jesse Norman]

We have discussed this quite a lot, so as I have quite a long speech, and a fair number of colleagues want to speak, I will press on, if I may.

We must face facts: it may take several weeks—possibly longer—before this national effort is reflected in a fall in infection rates, and it may take longer still to defeat the virus completely, but however long it takes, we will do what we can to support businesses and workers. As the House will know, under the jobs retention scheme, the Government will pay 80% of staff wages up to £2,500, provided businesses keep those staff employed. Her Majesty’s Revenue and Customs is working tirelessly to get the scheme up and running. The first grants will be made in a matter of weeks.

Of course businesses face cash-flow concerns, and we are recognising that through the business interruption loan scheme. For larger enterprises, the Bank of England is providing a new facility to help overall liquidity, and HMRC’s existing time to pay arrangements are available to help businesses make ends meet. We have deferred VAT payments for the next quarter, so that VAT-registered businesses will not need to pay VAT alongside their normal returns; that intervention alone is worth over £30 billion. Those measures are on top of those announced in the Budget earlier this month.

As colleagues across the House have mentioned, this is a particularly worrying time for the self-employed. I am acutely aware, as are all Ministers, of how deeply these concerns are felt across the House. Let me be clear that the Government recognise the specific challenges that self-employed people face. We will respond shortly. There has already been discussion of this, and a commitment from the Prime Minister on this issue, with tailored and targeted action. As the Chancellor has said, this problem is very far from straightforward. We are trying to be as inclusive, but also as fair, as possible.

[Jesse Norman]

I understand that. The right hon. Gentleman will appreciate that if we date the official recognition of the need for intervention on coronavirus from the Budget, we are two weeks into the situation. The Prime Minister knows the situation; he made a commitment to the right hon. Gentleman an hour or two ago, and I cannot do better than the Prime Minister.

As of Monday, sole traders and freelancers have been able to gain access to the coronavirus business interruption loan scheme, provided that their activity is channelled through a business account. We are removing the universal credit minimum income floor, so that self-employed workers have access to universal credit, and we have deferred the next deadline for self-assessment income tax payments until 2021, so that self-employed people can manage their finances better over the course of the year.

It goes without saying that more needs to be done and, as I have said, we will do that, but as my right hon. Friend the Chief Secretary to the Treasury made clear to the House yesterday, it is essential that that support reaches the people who need it the most. The Chancellor will provide a further update, as I have described, shortly. Until then, the Government will continue to listen carefully to hon. Members and, crucially, to those most directly affected. As the House knows, just as we are supporting businesses and employees, so we are also supporting families through the crisis. Those on low incomes will benefit from a package of measures worth more than £6 billion, including a £20 a week increase in universal credit standard allowance and the working tax credit basic element—an increase from £318 to £410 a month for a standard claimant over the age of 25. Those who are new to universal credit will not be required to attend assessment interviews. Advances for those claimants who need them will be available by phone or online.

Through these measures and others, the Government are absolutely clear that the burden of this pandemic must not fall on the lowest paid. We are particularly mindful of the needs of the most vulnerable members of our community and the charitable organisations that are working so hard to support them. The jobs retention scheme is available to all PAYE employers, including charitable and not-for-profit organisations. Furthermore, the business interruption loan scheme is applicable to social enterprises and to charities that receive half their income from trading. Charities will also benefit from a three-month VAT deferral to the end of June, and many are already eligible for 80% charitable rate relief as well, and, of course, as you will know, Madam Deputy Speaker, we are giving councils an additional £500 million in hardship funding to ensure that help is available for the most vulnerable people in our society who may be struggling to pay council tax bills.

[Sarah Jones]

On the point about the extra funding for councils, when I was talking to my own council yesterday it says that that will barely cover the number of people who will be applying for council tax relief; it will just fill that hole. It is looking at things such as the grant scheme. The loans that it will have to administer will amount to £50 million in my borough of Croydon, and there is no system in place yet to help it to understand how it is supposed to administer them, how it will work, and, indeed, how it will fund the support for the very vulnerable, many of whom are already struggling and will be struggling increasingly over the coming weeks.

[Jesse Norman]

I thank the hon. Lady for registering that point. She will be aware that we have made £1.6 billion available to support local authorities, and, of course, we are specifically supporting them by bringing forward the cash-flow element of business rates. We are leaning into this problem hard, but I thank her for putting the concern on the record.

It has been suggested that this may be the Leader of the Opposition’s final outing at the Dispatch Box. I am sure the House will not welcome that. I will leave it to others to write any political verdict or obituaries that may come, but let me say that no one in this House—certainly not I—would doubt the sincerity and the commitment that he has shown to his beliefs over many, many years, however vigorously we may disagree with them. For myself, I believe in a big society rather than a big state, but let us be clear that, in a time of national crisis, both will be needed. Finally, I think I can speak for my colleagues on the Conservative Benches in saying that we will be sad to see him go.

The coming weeks may be difficult. The action that we have taken has far-reaching consequences for our economy and our society, and yet it has the power to save thousands of lives. Throughout this time, the Government will continue to listen to the concerns of hon. and right hon. Members and of the public. They have already delivered one of the most generous and comprehensive interventions of any Government of the world, and we stand ready to do more. We will make every effort to safeguard people’s jobs and livelihoods, to support our public services and local communities, and to preserve and protect businesses, large and small, across the country. Our message is this: we have got your back and, together, we will defeat this virus and the Britain that emerges from this pandemic will be not only stronger and more resilient, but more united, too.

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[Sarah Jones (Croydon Central) (Lab)]

May I start by adding to the tributes to the Leader of the Opposition and the shadow Chancellor for the roles that they have played? As shadow Housing Minister, I have benefited greatly from their prioritising housing as an issue much more than perhaps we did before, and that has been right and a good thing to do.

I start by thanking the civil servants and everybody who is working on the Government’s response to coronavirus. It goes without saying that everybody is working incredibly hard and it is right that they should be acknowledged and appreciated.

I want to take just a few minutes to talk about housing, which I have already done this week, but I want to talk about it again because there is a particular problem with people who are renting, which has yet to be resolved by the Government. There is misinformation about what has changed and what has not changed in terms of the emergency legislation and what support renters can expect to get over the coming weeks and months. The Prime Minister said several times today that he wanted us all to put our arms around everybody in the country at this time and make sure that they are supported, but renters are not being supported at this time, and it is really important that the Government intervene. The Prime Minister promised last week that nobody would be evicted during this crisis, but that promise has not been upheld and it needs to be.

There are 20 million renters in England, 6 million have no savings whatever, and in 1.5 million households the renter is someone over the age of 65. Those are potentially vulnerable people. Any one of those people, at any point over the coming weeks and months, could find an eviction notice drop on their doormat. The Government have done nothing to stop landlords sending eviction notices to people who are renting their properties.

What the emergency legislation does, to be clear, is say that someone who is being evicted cannot be taken to court for three months rather than two if they have not left the property. So we are shifting to 12 weeks rather than eight, which means that someone sent an eviction notice might get evicted in June rather than May, if things go to court. The point is that most people leave when they get an eviction notice; they do not wait for things to get to the point where they go to court. When someone is given a notice of eviction, they have to leave the property, but people are misunderstanding the implications of what the Government are introducing. People will still at this point be getting eviction notices dropping on their doormat, so we could have families and vulnerable people, who have been told by the Government that they must stay indoors, receiving eviction notices telling them they must leave. That must be wrong, and something has to be done about that.

The Leader of the Opposition mentioned what we think needs to be done. We need a ban on evictions for six months and maybe more. Three months is not enough. We cannot have people going to court in June and being evicted, because we will still be in the middle of the crisis at that point. We need to see a suspension of rents if people cannot pay them and a manageable repayment system set up, and we need a substantial increase in support for rent costs through the social security system. We need the courts to be instructed to suspend all possession orders. In Prime Minister’s questions and in the debate since, Members have raised cases of people being evicted right now, and that cannot be right. Shelter can help with the changes that need to be made. We need clear Government guidance to people that if they are served an eviction notice, they must not leave their home. They must stay where they are there, because we do not want them to leave. If people are getting eviction notices, the Government must make it clear that they should not leave. We do not want that to happen to people.

I want to raise two other housing issues, if I may. One is the post-Grenfell situation. Tens of thousands of people in blocks covered with Grenfell-style cladding are going through the process of getting that cladding removed. They need some urgent guidance from the Government about whether the removal of that cladding will remain an essential construction task. They are in buildings that could go up in flames or be dangerous. Many of them are paying for waking watch, which is costing them hundreds of pounds a month each. They are funding waking watch to make sure that, if there is a fire, people can get out quickly enough.

These people have also seen huge rises in their insurance costs, which they are really struggling to pay. I will give just one example. For Islington Gates, a block with 141 households, the insurance for the block has gone up from £36,000 to £191,000. The residents have been told that they have to pay £10,000 each by 1 April, or there will not be any insurance on the building any more and they will all have to leave. Those are the real situations such people are finding themselves in, and we need some clarity from the Government about whether the cladding works will proceed.

At New Capital Quay in Greenwich—one of the first blocks to be identified as being covered with the same cladding as in the Grenfell Tower fire—the residents were contacted just yesterday and told that all the cladding removal will be halted. They have to carry on paying for waking watch, and they have to carry on with the uncertainty of living in a very dangerous building, so we need some clarity about that, please.

The other group of people I want to mention are those in temporary accommodation. We know that 125,000 children live in temporary accommodation, and we are facing several problems here. The first is that they can be evicted at any point in time, which is a great worry. In the past 24 hours, Travelodge has closed many hotels, evicting the families who were using them as temporary accommodation. This is a live and very real problem for families right now, and the Government need to intervene there.

There is also the problem of people in bed-and-breakfast and hostel accommodation and the risk of spreading coronavirus there. The Mayor of London has found some hotels that he can use to put rough sleepers in so that they have somewhere they can go. As I understand it, the Government have also identified hotels where people can go if they are displaying symptoms or need somewhere to be if they are on the streets. However, we need some clarity about what that programme is and what is being done there.

I will leave my remarks there, because I know other people want to speak. I would just say that, at this time of great crisis, we are all retreating to our homes to be safe. If we find ourselves in a situation where people cannot stay in their homes, which we will do unless the Government act, that will be a great injustice for those people.