Additional Covid-19 Restrictions: Fair Economic Support

Steve Barclay Excerpts

Wednesday 21st October 2020 Commons Chamber

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

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

“recognises the virus is spreading differently across the country which supports the need for a regional and local approach; acknowledges the fact that repeated national lockdowns should be avoided given the cost they have on mental wellbeing, access to NHS treatment, and jobs in the economy; supports the Government’s Job Support Scheme which protects the jobs and incomes of those in affected businesses; recognises the extra financial support provided to Local Authorities for enforcement, local contact tracing and businesses, and approves of Government trying to work with local representatives to improve enforcement and Test and Trace.”.

May I begin by expressing my condolences, and the condolences of colleagues on these Benches, to the hon. Member for Ashton-under-Lyne (Angela Rayner) on the loss of her aunt?

The hon. Lady was right in her opening speech to talk about the shared desire of the British people whom we represent to do the right thing. That is why all Members of this House want to protect the lives not just of our family members, but of our constituents and to balance the actions that are needed to do so with protecting jobs and businesses. The best way to make good for the workers whom she referenced in her motion is to reduce the spread of the virus through targeted action. That is why the Prime Minister was right to outline 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. Indeed, the deputy chief medical officer said just yesterday, when supporting the tiered regional approach, that it would be “inappropriate” to enforce a national circuit breaker as it is not

“consistent with the epidemiological picture.”

In fact, to be fair, the shadow Health Secretary was right also to talk about the wider damage of a national lockdown on our economy and society.

[Alun Cairns]

The evidence from the deputy chief medical officer in England is quite stark, and the statements really make people pay attention. Has my right hon. Friend seen any counter-evidence from the Welsh Government to suggest that one size fits all? My constituents in the Vale of Glamorgan have to face the lockdown of all businesses, as we did in March, in spite of the area having exceptionally low infection rates.

[Steve Barclay]

What was clear from what the deputy chief medical officer said was the importance of targeted action. There has been concern in respect of the Welsh Government, but I recognise that all leaders are balancing these difficult decisions. That is why I pay tribute to the leadership in Liverpool, Lancashire and South Yorkshire, who have worked constructively with the Government.

[Chris Bryant (Rhondda) (Lab)]

Today is the anniversary of the terrible events at Aberfan, and none of us will ever forget in Wales. I am enormously grateful to the Minister for providing £2.5 million for the moving of the tip in Tylorstown; I hope that that is just a down-payment on the rest of the money that will come. Will the Barnett formula be applied to all the financial awards that have been made to Manchester, Lancashire and other parts of England, so that additional money comes to Wales? My biggest fear is that there are so many businesses and individual tradespeople who simply cannot afford to take a fortnight off to self-isolate unless there is financial support for them.

[Steve Barclay]

First, the hon. Gentleman is right to recognise the importance of today, the anniversary of a national tragedy that unites us all. As I said to him last time, I am keen to work with him constructively, as I know he is, to take that work forward. Later today, I have a call with the Finance Ministers in the Scottish, Welsh and Northern Ireland Administrations, so I will be able to talk further about that. As a fellow Unionist, he will know that one of the advantages we have had throughout this pandemic is the broad shoulders we have been able to provide as a United Kingdom to the various business support and job support measures. What is announced for England is subject to the usual Barnett process, and I will discuss that. One of the concerns of Members across the House is about decisions taken in Wales that have an economic impact. It is important that these decisions are co-ordinated through the Joint Biosecurity Centre, in order that we have a consistent, scientific approach. That is a key issue that a number of Members have concerns about.

[Mr Perkins]

The Minister suggested a moment ago that the Mayor of Manchester had not been constructive; he praised how constructive the Mayors who had come to an agreement with him were. The Mayor of Manchester made a request for £90 million and was willing to be negotiated all the way down to £65 million, which sounds incredibly constructive to me. In the spirit of trying to bring everyone back together, would it not be better for him to recognise that the Mayor of Manchester is doing what he thinks is right—as are other Mayors and council leaders in other areas, whether or not they agree with the position that the Prime Minister and the Government come up with—and to say that everyone in this is attempting to be constructive?

[Steve Barclay]

I was making a factual point that picked up on the opening remarks of the hon. Member for Ashton-under-Lyne. The Mayor of Manchester, in his discussions with Government, expressly said that Manchester should be treated differently from other areas. The hon. Lady said that the Mayor of Manchester “spoke for Great Britain”. That does a disservice to other local leaders, who have also spoken for their areas and have worked constructively with Government. I do not think it is the case that the Mayor of Manchester, unlike the Mayor of Liverpool, speaks for Great Britain in the way that the hon. Lady suggested.

The Mayor of Manchester’s position is not deliverable operationally, because local authorities do not have access to welfare payments for the dynamic aspect of joint job support—I can come on to that in my remarks—and it was at odds with the tiering approach that we set out. There is a difference, I am sorry to say, between the approach taken by the Mayor of Manchester and the constructive approach taken by other local leaders. I do not accept the premise from the hon. Lady that the Mayor of Manchester alone speaks for Great Britain, and other local leaders in Liverpool, Lancashire, South Yorkshire and elsewhere do not, or that businesses in those areas should in some way be treated worse than the businesses in Manchester—that seems a remarkable position for the Opposition to take.

[Several hon. Members rose—]

[Steve Barclay]

I will make a little progress and then of course I will give way.

In taking forward the targeted action plan that the Prime Minister has set out, we recognise that there will be significant local economic impacts, particularly for the areas in tier 3. That is why the Government have set out a package of support, and indeed why, as I say, the Mayors in other areas have worked constructively with it. This package has a number of parts. I heard reference in the shadow Minister’s opening remarks to £8 per head. That is just one component of a much wider package. It may therefore be helpful to take the House through the full suite of funding that is available.

First, local authorities are absolutely critical to the tier 3 restrictions. That is why, in addition to the £3.7 billion of un-ring-fenced grants that were announced earlier this year, the Prime Minister announced a further £1 billion of support, so that is agreed funding for local authorities that will be allocated to them shortly. In addition to that, local authorities in tier 3 will receive a further £8 per head in respect of public health measures specifically linked to enforcement within the outbreak management fund. That goes alongside other measures such as the availability of military support, which sits in addition to the infection control funding that local authorities also have access to—a further £300 million that will support localised test and trace services, specifically within tier 3—and the £1.1 billion to support infection control within the adult social care sector. Before we get on to the discussion around business support or the support for individuals through the job support scheme, it is important not to talk about local authority support just in terms of £8 per head, because that is one component of a much wider package of support that the Prime Minister has announced.

[Mr Betts]

I welcome the support for local testing, tracking and tracing. It should have been done months ago: that is the reality of the situation. As regards local negotiations—I put this to the Health Secretary last night and he did not deny it—there are not negotiations; there is a financial package that the Government have decided on that has been offered to all areas that have been put up to tier 3 status. It is a case of saying, “Take it or leave it: there’s no extra money going to be negotiated.” That is exactly what leaders in South Yorkshire have said it is: lots of civil servants in a room telling us what we cannot have. These have been the discussions, not negotiations, that have been happening in South Yorkshire in the past few days.

[Steve Barclay]

There has been a framework that we have used to shape our discussions. However, is this not what the Opposition motion, in essence, is calling for—a nationalised approach? In fact, we just heard an Opposition Member calling for the exact opposite in saying that the Mayor of Manchester had a case that was supposedly better than that of the Mayors in Liverpool or South Yorkshire, so the Mayor of Manchester should be treated a preferential way to constituents elsewhere in the north-west. Yet the hon. Gentleman, who I know comes at this very constructively—I recognise that that has always been his approach in the House—says something different. There seems to be confusion among Opposition Members. Do they want a national approach or do they want the Mayor of Manchester to be able to negotiate something allegedly on behalf of Great Britain? I do not think that was his electoral mandate.

[Mr Dhesi]

Many individuals are not eligible for either the self-employed income grant scheme or the coronavirus job retention scheme. I have been contacted by many of my Slough constituents, particularly the self-employed, who fear that after November they will see their incomes plummet. Does the Minister agree that they cannot be ignored and that they need support, especially if they are to go into increased lockdown restrictions?

[Steve Barclay]

I do agree that they cannot be ignored. In the third section of my speech I will come on to the individual support that we have in place and where that stands in international comparisons. Indeed, we debated that at Treasury questions only yesterday.

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

The reality is that whether in Lancashire, Liverpool, South Yorkshire or Manchester, there are insufficiencies in the package that the Government are putting on the table. I know from my own constituents in York Central, now in tier 2, that our economy is collapsing. We need to have the proper underpinning, and that is why we need the dialogue. Different economies across the country have different complexities and different needs, and that is what the Minister really needs to get a grip of.

[Steve Barclay]

Sure, but for much of the passage of dealing with the pandemic, Opposition Members have often cited international comparisons. Now, when we point out that the scheme we have brought forward does stand very strong comparison internationally—in fact, the furlough scheme for eight months at 80% was way above what most international comparators offered—they say, “Actually, we do not want to apply international standards anymore. We want to apply a purely bespoke approach.”

The hon. Lady is right to point to the fact that businesses are facing real pain. There is huge pressure on jobs, and that is why the Chancellor set out, in the summer economic update, the acceleration of infrastructure schemes—I think she and I would agree on them—such as the green jobs for decarbonising public sector buildings and how we will meet our net zero obligations. I suspect we share the desire to create jobs through moving that forward and the acceleration of infrastructure through Project Speed.

The Chancellor set out his plan for jobs—the doubling of work coaches, the tripling of traineeships, the £2,000 for apprenticeships—because, as the hon. Lady rightly identifies, those businesses are under significant pressure. That is why, alongside the package of measures for local authorities, we have also applied business grant support of over £11 billion, including funding of leisure and hospitality grants of between £10,000 and £25,000. Further to that, the Government have allocated discretionary business support to mayors, in the case of Liverpool and Lancashire, of a further £30 million. To help businesses with their fixed costs, such as rent and bills, we have also introduced a new business grant scheme in England, and any business legally required to close can now claim up to £3,000 depending on the rateable value of their property. They can claim grant payments of up to £1,500 per fortnight and keep claiming that as long as their businesses are required to close. That is money that does not need to be repaid.

While the grants are England-only, we are the Government for the whole United Kingdom. To address the point made by the hon. Member for Rhondda (Chris Bryant), who is no longer in his place, about what that means for the UK’s ability to support businesses in Scotland, Wales and Northern Ireland—which we are committed to doing as the United Kingdom Government —it means we have guaranteed a further £1.3 billion for Scotland, Wales and Northern Ireland should they choose to follow suit.

[Kevin Hollinrake]

Does the Minister agree that the most important thing we can do for businesses is to allow them to stay open and to keep trading? Where we are requiring businesses to close, the schemes are good and purposeful, but there are some businesses that, because of the restrictions—for example, in hospitality with the one household rule—are effectively unviable as it is restricting their business to such a significant degree. Will he consider widening the job support scheme, for example, to those businesses that are just not viable in tier 2 and tier 3 for that reason?

[Steve Barclay]

My hon. Friend is absolutely right, and we debated this yesterday. Much of the debate is about tier 3, but there are businesses that are feeling the impact in tier 2, and we are acutely aware of that and we are discussing that with business leaders. The key issue there is that we have taken toggling measures, for example, the cut in VAT and the extension of the loans. |As he knows, as a senior business figure himself, cash flow is a huge issue for businesses, and the Chancellor has been very keen to work constructively with all business leaders, the trade unions and others, and to consult widely. We have been willing to listen and to extend, for example, the loans that were available in order to pick up exactly the point my hon. Friend makes in terms of businesses in tier 3.

[Ben Lake (Ceredigion) (PC)]

The Minister mentioned earlier that he will meet the Finance Ministers of Wales, Scotland and Northern Ireland later this afternoon. Is he in a position to tell the House whether he expects further support packages for Wales to be announced at that meeting ahead of the two-week firebreak that will come in on Friday?

[Steve Barclay]

We have a long-standing and established methodology in terms of support across the United Kingdom through the Barnett process that allows the broad shoulders of the United Kingdom—[Interruption.] I suspect that the hon. Member for Glasgow North (Patrick Grady) wants to come in on that point, so I will give way. It will be done through the Barnett process, but there are some specific issues raised, such as the guarantee, which we have discussed previously.

[Patrick Grady]

When the Minister meets the Finance Ministers this afternoon, he will hopefully be able to answer the points that the Scottish Finance Secretary raised in her letter to the Chancellor this morning asking for clarification about precisely this issue. We welcome the £700 million for support, but it is not clear whether that is purely for business support or whether it is supposed to cover all the additional consequences and costs that come from covid, including for the health service. It is important that devolved Administrations are given the support they need and any consequences that come from additional funding to the city regions.

[Steve Barclay]

I was reading that very letter at my desk this morning ahead of the meeting, and I know exactly the point that the hon. Gentleman refers to. We recognise—I think this was behind the constructive discussions we have had with the Scottish, Welsh and Northern Irish Governments—that we all need to display flexibility, given the unprecedented nature of covid. The volatility of the size of additional payments for covid is why we gave the guarantee, which I think the hon. Gentleman would equally concede was welcomed by the Scottish Government, as it allowed clearer planning in their response to covid. However, I would also make the point—on this we may disagree—that it is the broad shoulders of the United Kingdom that allow the scale of the UK Government’s response, which has protected so many jobs and businesses in Scotland.

The third area of the Government’s response, which speaks directly to the motion before the House, concerns individual support. Businesses that have been legally required to close, whether in tier 3 areas or elsewhere, will be able to claim a direct wage subsidy. For people unable to work for one week or more, their employer will still pay two thirds of their normal salary and the UK Government will cover the cost. The existing furlough scheme continues throughout October, with the new job support scheme available from November, so there will be no break in support for employees. To give businesses and people certainty, the scheme will run for six months through to the spring. The job support scheme is in line with schemes in most other major European countries, and to support the lowest paid through the crisis, we have also made our welfare system more generous and more responsive, with an additional £9 billion of funding.

Let me give the House some examples of how the job support scheme will work and interact with universal credit. A single person aged over 25 working full time on the national living wage and living in a one-bed, privately rented flat in Manchester will still receive 92% of their original net income. Likewise, thanks to the combination of the job support scheme and universal credit, a couple with one child living in a two-bedroom privately rented house, where one works part time and the other full time on the national living wage, will receive 90% of their original net income.

The question that was never answered by the Mayor of Manchester was how he would administer a top-up of the job support scheme, when he does not operationally have access to the information required to dynamically make the interactions of those payments work. It is not only that he wanted Manchester to be treated differently from Liverpool and Lancashire; he was also changing the purpose of the business support payments from one that was directed at supporting businesses in tier 3 areas to one that was about changes to our welfare provision across the entire United Kingdom.

I know that many of my hon. and right hon. Friends have been engaging constructively with the Government during these challenging times. In particular, I thank my hon. Friends the Members for South Ribble (Katherine Fletcher), for Leigh (James Grundy), for Penistone and Stocksbridge (Miriam Cates) and for Southport (Damien Moore). Despite being relatively new to this House, they have shown real leadership in their communities, supporting families, businesses and the vulnerable, and a determination to put their constituents first and do all we can to stop the spread of this dreadful virus.

This Government are always willing to listen and to work with local leaders. The critical point is that none of these policies exists in isolation. Taken together as a package, the economic support that we are providing for areas facing higher restrictions is broad, deep and consistent, and of course all that is on top of the £200 billion of support that we have already provided through our plan for jobs. I urge anyone who questions the support that we are providing to look at the whole plan that we have set out: half a billion pounds for local enforcement; over a billion pounds for local business support; grants of half a billion pounds for businesses ordered to close every month; billions of pounds to support jobs and incomes; and billions more to strengthen our welfare safety net. This Government will continue to protect the jobs and livelihoods of the British people in every region of our country, while also taking targeted action to reduce the spread of the virus.

[Several hon. Members rose—]