Covid-19: Economic Impact of Lockdowns

Taiwo Owatemi Excerpts

Tuesday 29th November 2022 Westminster Hall

[Esther McVey]

My hon. Friend makes the point eloquently; I hope he will make a speech later, fleshing out his comments.

By February 2022, inflation had already surged, with the consumer price index hitting 6.2% in February, after which, without doubt, the war in Ukraine added to the problem. As it stands today, we have unprecedented inflation and costs of living.

None of that should come as a surprise. In fact, the Imperial College report of March 2020 that recommended lockdowns specifically said that the

“economic effects of the measures which are needed to achieve this policy goal will be profound.”

While many people talk about the cost of covid, it is actually the cost of lockdown and lockdown rules that need to be questioned.

The Government have spent in the region of £400 billion on the covid-19 response, which has taken the national debt to over £2.1 trillion. To make matters worse, we know vast sums of money were wasted. For example, seven Nightingale hospitals were built in England, which was an impressive achievement completed in record time. However, most of them were hardly used in the way intended and they cost more than £530 million. The Yorkshire Nightingale closed before ever seeing a patient. Elsewhere, an eye-watering £673 million was spent on unusable personal protective equipment items.

The £70 billion spent on furlough and £84 billion on business support schemes softened the blow for a while. However, the Federation of Small Businesses still warned of a ticking time-bomb, with 500,000 owners of small businesses—the backbone of our economy—at risk of going bust within weeks.

[Taiwo Owatemi (Coventry North West) (Lab)]

In my city of Coventry, many small businesses were hit considerably by covid and are still being hit because of the cost of living crisis. Does the right hon. Lady agree that in order to continue to support our small businesses given the turbulent year that they have had, we need to reform business rates and invest in our high streets, and we also need to ensure that our small businesses are given the support needed for them to be able to compete effectively with online giants that have been able to make hay during the covid-19 pandemic?

[Esther McVey]

I am a massive fan of small businesses, enterprise and those people creating wealth in their communities, and we will have to support them. Also, I will pause for a moment to reflect on all those small businesses that did not get support during the pandemic, which are known as Forgotten Ltd, and they also need support going forward. We again have to create a dynamic world and a dynamic UK for these private enterprises.

Vacancies are now at a record high as people elect to resign from the labour market, which is known as “the great resignation”, and because there are those other people who are now classed as being economically inactive. This is something that we could not have foreseen as we furloughed and closed the country down, but again it is a consequence of the lack of debate, probing and questioning at the time.

It is finally time to publish the much talked-about but still missing cost-benefit analysis that led to the nation being locked down, and to have full disclosure about the facts that were available. Let us review the list of experts on the Scientific Advisory Group for Emergencies, or SAGE, and on other advisory committees. Going forward, let us ensure that there is transparency about the members of these groups, as we have for MPs, such as their political affiliation and the financial support they receive.

All eyes are on the covid-19 inquiry for impartiality and a diverse range of experts to give evidence. We need integrity and clarity, and the policy of lockdown needs to be assessed honestly and fully. However, today I call on the Minister—the Economic Secretary to the Treasury, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith)—to release the much-awaited cost-benefit analysis of lockdown.

Economy Update

Taiwo Owatemi Excerpts

Thursday 26th May 2022 Commons Chamber

[Rishi Sunak]

The hon. Lady is right that there is of course an eligibility date deadline so that we can process one-off payments, but that is part of the reason why we have staggered the payments in two tranches: to make sure that we catch those who arrive on to the welfare bill between those payments. There will be a stretch period between them to catch as many of those people as possible.

[Taiwo Owatemi (Coventry North West) (Lab)]

For months now, I have been telling the Chancellor about the financial struggles that many families in my constituency of Coventry North West have been facing. This autumn, families face an energy cap rise of more than £800, which comes on top of record-high inflation. Can the Chancellor honestly tell each and every one of my constituents that today’s announcement is the right decision at the right time? From where I am standing, this feels like a classic example of too little, too late.

[Rishi Sunak]

This is the right decision at the right time. We are providing up to £1,200 of support to the most vulnerable third of households in this country. As I have said, that is roughly similar to the average energy bill increase that we are likely to experience over this year.

Health and Social Care Levy Bill

Taiwo Owatemi Excerpts

2nd reading
Tuesday 14th September 2021 Commons Chamber

[Dame Margaret Hodge (Barking) (Lab)]

I hope that the hon. Member for Yeovil (Mr Fysh) will join the Opposition in the Lobby tonight given what he has just said in his contribution.

We should give credit where it is due. We are starting a debate not on whether we can rescue our broken health and social care services, but on how we do so. These services were damaged not just by covid, but by a decade of savage cuts. Tragically, the Government are flinging away this once-in-a-lifetime opportunity to do something that will endure, that will tackle the underlying problems facing these critical services, and that will be fair to us all—whatever our age, wherever we live and whatever our income.

These shambolic proposals will not meet the needs of the elderly and disabled who depend on social care. They will not properly protect our NHS. They will further ravage struggling local authorities, and the tax proposals are needlessly regressive.

I wish to focus on the tax. The health and social care levy is an unfair hike that will hit younger working people the hardest.

[Taiwo Owatemi (Coventry North West) (Lab)]

Does my right hon. Friend agree that it is completely unfair that a graduate nurse who works a night shift as an Uber driver now faces a £12,500 tax hike over their working life due to this new levy? That is the reality facing many of my constituents. It is high time that we start calling this measure what it is. This is not a social care levy; this is the workers’ tax.

[Dame Margaret Hodge]

My hon. Friend makes the point very powerfully. I was going to illustrate it more generally by saying that families whose personal allowance will be frozen, such as the one she mentioned, and who lose the £20 a week from universal credit cuts—the very families that the Government proclaim they want to level up—will suffer.

Do not just listen to me. I am going to re-quote the quotation that my hon. Friend the Member for Ealing North (James Murray) used in his excellent speech. Listen to what the Government’s tax authority, HMRC, says:

“There may be an impact on family formation, stability or breakdown as individuals, who are currently just about managing financially, will see their disposable income reduce.”

Is that what the Government really want?

Half the revenue will be paid by people who are under 45, most of whom will be hit by a 10% rise in NICs. That is regressive. National insurance kicks in at a lower level of earnings than income tax. That is regressive. The self-employed pay a lower rate. That is regressive. Income from assets such as rent from property remain untouched. That is regressive. And squirreled away in the policy document, the Government say that they expect that

“demographic and unit cost pressures will be met through council tax…and long-term efficiencies.”

That means further cuts and a hidden hike of the outdated council tax—a tax that hits those in Barking and Dagenham harder than those in Kensington and Chelsea. That is also regressive.

I am rather tired of being told by the Government that there is no alternative. There are plenty. For a Government committed to fairness between individuals, fairness between generations and fairness between income secured through wealth as well as work, there is a raft of better ways to fund health and social care. Put a penny on income tax and equalise rates for dividend and income tax: £13 billion. Equalise capital gains and income tax rates: £14 billion. Or, as suggested by academics Advani, Summers and others, plug the unfair gaps in national insurance by extending it in full—not just the levy, but all of it—to all investment income and working pensioners: £12 billion. If we scrapped the upper earnings limit and equalised the rates of NICs paid between high and low earners, we would not just raise enough to meet roughly the same amount as the Government propose; we could cut the main rate of NICs by 1.25 percentage points.

This unfair plan is simply not fit for purpose. The numbers do not stack up. The poor will pay for the rich. The young will pay for the old. The struggling tenant will pay for the wealthy landlord. The asset-poor worker will pay for the asset-rich retiree. Make no mistake: these are political choices—choices that fail working people, fail our NHS and fail those in desperate need of quality social care. I cannot support them.

Covid-19: Government Support

Taiwo Owatemi Excerpts

Wednesday 7th July 2021 Westminster Hall

[Taiwo Owatemi (Coventry North West) (Lab)[V]]

It is a pleasure to serve under your chairmanship, Mr Mundell. I thank the hon. Member for Midlothian (Owen Thompson) for securing this important debate.

It is excellent that more than 10 million people in the UK have been able to benefit from the extended furlough scheme throughout the pandemic. However, for many people, access to much-needed funds was marked by one bureaucratic nightmare after another. For one group in particular, the challenge of receiving financial support is ongoing. The Government have repeatedly failed to reconcile the glaring imbalance in access to covid-19 support for the self-employed. Many self-employed workers continue to be unfairly marked as ineligible for Government support schemes.

Throughout the pandemic, I have received distressing emails and phone calls from constituents excluded from funding because of the obscure eligibility rules for the self-employment income support scheme. One such constituent started a business five years ago and in that timeframe experienced one year of minimal profit. Because of the initial year’s lack of return, they were deemed ineligible for funding. This constituent’s appeal to the Government to discount their start-up year fell on deaf ears and their appeal was rejected without due consideration of their circumstances. If the Government are to ensure that the process of granting SEISS funds is fair, they must do a much better job of providing transparent guidance for this seemingly arbitrary system of eligibility.

Although circumstances vary in detail, my self-employed constituents have collectively faced needless obstacles in trying to access grant money that they deserve. The difficulty, and often inability, of many of them to access Government funds has become the rule, not the exception. The Government must do better at offering accessible support to the self-employed instead of blocking them through non-uniform exceptions.

As we discuss continued access to covid-19 relief refunds, I also urge the Government to consider the devastating consequences of cutting off overall grant access too quickly. Over the past 18 months, businesses—particularly small, independent businesses—have faced a devastating financial fall-out from covid-19. They have seen their savings depleted, taken on massive loans and bent over backwards to accommodate safety restrictions, often at great expense. UK businesses have borrowed more than £75 billion during this pandemic, and it will take many small businesses decades to pay back loans.

This month, banks will begin to ask for the first repayments, and if the Government withdraw financial support completely, small business owners will need to grapple with repaying huge debt, often with little savings, with no safety net. The Government simply cannot throw small businesses under a bus. Instead, they must be prepared to provide greater flexibility on repayments and to consider what grants should continue to be made available for the self-employed and small business owners over the coming months as the economy recovers from the pandemic. Simply cutting away all existing support and then demanding repayment is a recipe for disaster.

Equitable Life

Taiwo Owatemi Excerpts

Thursday 21st January 2021 Commons Chamber

[Taiwo Owatemi (Coventry North West) (Lab) [V]]

It is a pleasure to speak in this debate. I pay tribute to the hon. Member for Harrow East (Bob Blackman) for securing this debate and the Backbench Business Committee for granting it.

Over the past few days, my constituents have contacted me about this issue and have expressed deep concern about the Government’s inaction and the injustice that Equitable Life policyholders have faced. Many policyholders have received only partial compensation and others have not received one penny. This debate is timely as it allows us to press the Government on the importance of pushing forward a full and proper consultation with policyholders and the Equitable Members Action Group to ensure that their concerns are raised, considered and addressed.

In 2010, Equitable Life victims were promised fair and transparent compensation. We have to remember that they were hard-working teachers, pharmacists, shop-floor workers and small business owners, many of whom spent their lives in service, caring for others. They have been short-changed, let down and swindled out of their hard-earned money. It is 21 years since the House of Lords ruled that the Equitable Life Assurance Society must close to new business due to being rendered financially unviable. Since then, more than 1 million people have been left with significant financial losses.

The parliamentary ombudsman concluded in 2008 that the victims’ loss was directly due to decades-worth of regulatory maladministration. In 2010, the coalition Government accepted those losses and allocated £1.5 billion for compensation. That was 11 years ago; 11 years later, victims in my constituency are still waiting for compensation. That is not good enough. In the process of seeking justice and compensation, they have been denied transparency over how their payments have been calculated. Her Majesty’s Treasury has refused time and time again to reveal the methodology that its advisers used to calculate payments.

The victims rightly feel as if they have been swindled out of their savings, and it is very hard to disagree with them. Only 22% has been rendered in compensation so far. That is not right or fair, so I ask the Government to consider the Equitable Members Action Group’s demands. The victims have waited long enough for justice and compensation.

The Government must commit to ensuring full payment to all 895,000 traced pension saver victims. They must commit to ensuring full Treasury transparency over the way repayments have been calculated. They must commit to a Public Accounts Committee and Public Administration and Constitutional Affairs Committee joint inquiry into payment inaccuracies. Finally, they must commit to ensuring that the oldest and most vulnerable victims receive equality of treatment with regard to the with-profits annuity contracts from September 1992.

Victims of Equitable Life’s scandals have waited long enough. Now is the time for fair treatment in compensation. Now is the time to do right by them, so I hope the Government do the right thing.

Support for SMEs: Covid-19

Taiwo Owatemi Excerpts

Tuesday 10th November 2020 Westminster Hall

[Taiwo Owatemi (Coventry North West) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Edward. I thank the hon. Member for Carshalton and Wallington (Elliot Colburn) for securing this important debate.

As we all know too well, the coronavirus pandemic has hit our economy hard, and continues to do so. After the last lockdown, the Government economic guidelines were marked by last-minute scrambles to keep pace with steadily worsening events. This pattern culminated with last week’s announcement of the Government’s guidelines for small businesses mere days before the lockdown was to take effect. The uncertainty and the haste with which small businesses have been forced to adjust is a cause of honest concern.

In the last few months we have seen hundreds of companies going to the wall, tens of thousands of businesses shuttered, hundreds of thousands of redundancy notices handed out and millions more workers worried about whether they will still have a job in the future. None of this was inevitable. The failures of the Government to act early on the circuit breaker means that the economic pain of this lockdown will be greater, more far-reaching and indiscriminate. Now, with an estimated 23,000-plus weekly infections, 800 of which are in Coventry, we have abruptly found ourselves needing to go into a lockdown that was both foreseeable and preventable. Once again, the Government have waited until the last possible minute to act, causing huge anxiety for the people in my constituency and jobs to be lost across the country.

Although it is good that the Government have extended the job retention scheme and furlough scheme—we welcome that—and opened up a timeframe to apply for an emergency bounce back loan, more must be done to adequately address the practical issues this pandemic and lockdown present.

I fear that beyond those measures, the face and feel of our high streets are undergoing long-term change at a more rapid pace. When we leave lockdown for the second time, businesses will have to follow different norms of operation, such as being open at reduced capacity and altering their opening hours. The current financial discussions do not do enough to answer the question: what is the future of the British high street? The people in my constituency want to know the future of Burnaby Road and Holbrook Lane, as well as other centres of local shopping and community life. What will we tell my constituents in Coventry North West who have spent decades building family businesses and who are unable to plan against the uncertainty and seemingly short-sighted post-lockdown guidance? Equally, what will we tell the estimated 250,000 businesses without access to bounce back loans?

I call on the Minister to look beyond the current measures and consider what the Government must do to preserve high street businesses in the face of rapidly changing consumer culture. I recently spoke to the owner of The Loft dance studio in my constituency, who meticulously followed the Government’s social distance guidelines, spending hundreds of pounds to subsidise the presence of safety measures such as hand sanitisers and signage, often at the expense of money earmarked for his rent. This studio has been successful in providing a safe venue for students to train, but the owner feels that his business is suffering as a result of the latest lockdown. Importantly, the students who relied on the dance studio as a mental health resource, a place where they could engage in an activity from which they learned teambuilding and perseverance or gained a path to a career or higher education, are suffering as well.

My constituents have done everything asked of them, but many of them fear that the Government have not done their part. Small businesses and their patrons should not have to spend one single day more in lockdown than is -absolutely necessary. We cannot repeat the reactive, clumsy and confused approach to post-lockdown guidance. At the end of the day, those who suffer will be the hard-working, decent business people, who have spent years of their lives and their life savings on building up businesses that could go bust through no fault of theirs.

We have not only an economic obligation but a moral obligation to guide and support the people behind those businesses them. That is why I call on the Government to develop and publicise a flexible, long-term recovery plan for small businesses on our high streets. Small businesses rely on the certainty of advance Government guidelines to plan for their future. We must not let them down.

Government Response to Covid-19

Taiwo Owatemi Excerpts

Tuesday 3rd November 2020 Westminster Hall

[Taiwo Owatemi (Coventry North West) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Charles.

I thank the hon. Member for South Dorset (Mr Drax) for securing this important debate. All of us here today are saddened that we are heading into another lockdown without the Government having done everything in their power to limit the loss of lives and infections in this second wave. I worry that thousands of lives will be lost and that our health and social care sectors will be pushed to breaking point once again. While I commend the Government for listening to the Opposition and to SAGE and for following the science, I am concerned that it has come a little too late.

We are here to discuss the Government’s effectiveness in dealing with the crisis, and I would not be telling the truth if I did not say that the Government have fallen short in navigating us effectively through the crisis. But here we are, and I look forward to working collaboratively with all Members in the House to move forward and mitigate the worst of what is to come.

The Government have rightly said that the NHS will get whatever it takes to deal with covid-19, and I am sure that the hon. Member for South Dorset agrees that it should be the same for the social care sector. It is imperative that weekly testing of care home residents and staff is prioritised in order to save many lives. As I speak about my friends and colleagues in the health and social care sector, I am sure that the hon. Member for South Dorset would like to join me in paying tribute to all the frontline workers who have put their lives on the line during the pandemic.

Statistics show that 1,320 healthcare workers have died from covid. One life lost is too many and 1,320 represents a dereliction of duty on our behalf. Delays in the early stages of the pandemic meant that healthcare workers were forced to work without the requisite PPE. Staff with pre-existing conditions are still working, despite evidence showing that they are more likely to die, or become very ill, from the disease. The sacrifices that they have made makes it incredibly painful that our nurses and colleagues in the social care sector are not being paid a fair wage. There are about 759 nurses living in my constituency who will be expected to work during the deadly second wave. One way this Government can show us that they value the work of our nurses is by increasing their pay now. It is unfathomable that nurses should still have to wait until April to receive better pay for the important work that they do.

As for social care staff, I hope that the hon. Member for South Dorset will agree that those on the minimum wage should also receive increased pay. A pay rise will not compensate them for the missed birthdays, school plays and other memories not shared with their loved ones, but it will give them—nurses and social care workers—dignity in their work and help them to provide for their families, which is help that they deserve.

I wonder whether the hon. Gentleman will join me in asking the Government to ensure that just three things happen: first, that healthcare workers do not run out of personal protective equipment; secondly, that they receive a pay increase; and, thirdly, that healthcare and social care staff with pre-existing medical conditions are better protected and shielded during the second wave.

As I said, it is really important for us to learn the lessons of the first wave and to work together for all our constituents.

[Sir Charles Walker (in the Chair)]

We are now going to try to keep colleagues to five minutes.

Oral Answers to Questions

Taiwo Owatemi Excerpts

Tuesday 20th October 2020 Commons Chamber

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

[Taiwo Owatemi (Coventry North West) (Lab)]

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

--- Later in debate ---

[Jesse Norman]

[Taiwo Owatemi]

[Jesse Norman]

Black History Month

Taiwo Owatemi Excerpts

Tuesday 20th October 2020 Commons Chamber

[Taiwo Owatemi (Coventry North West) (Lab)]

I thank my hon. Friend the Member for Erith and Thamesmead (Abena Oppong-Asare) for securing this long-overdue debate. It is my honour to speak in this debate as the first black MP for Coventry North West and as the first MP of Nigerian heritage in the west midlands—as my hon. Friend the Member for Vauxhall (Florence Eshalomi) said, I hope not to be the only one.

We should celebrate black history all year round, not just in October. I look forward to many more discussions, debates and celebrations of black history on the Floor of the House. I want to take this moment to celebrate Coventry’s black history. According to the most recent census figures, black people made up 3.4% of the Coventry North West constituency—that is thousands of people making brilliant contributions to our culture, our economy and our thriving communities.

In a nod to black people’s contribution to Coventry’s arts and cultural heritage, I pay tribute to the pioneer Ira Aldridge, who broke racial barriers by being the first black actor to play Othello in Shakespeare’s notable play. Ira contributed immensely to Coventry’s cultural heritage by becoming Britain’s first black theatre manager. Offstage, he was a prominent anti-slavery activist, performing in and directing anti-racism plays and mobilising citizens in Coventry to sign public anti-slavery petitions. He was a world-renowned black actor who found a home in Coventry, and in doing so he secured our reputation for theatrical excellence.

It would be remiss of me not to mention the fact that Coventry is a trailblazer for British music. We are the city that created 2 Tone, an era-defining fusion of Jamaican ska, punk rock and new wave music. Did hon. Members know that Chuck Berry recorded his only No. 1 hit, “My Ding-A-Ling”, live in Coventry? [Interruption.] Perhaps they did, but it does not hurt to remind them once again. I say all that, because I am proud of my constituency’s brilliant contribution to black British history. Today, I want everyone to know about Ira, 2 Tone, and Coventry’s long history of black brilliance. Our status as UK City of Culture 2021 has galvanised us to celebrate black history in Coventry, and I hope that we continue to do so—not just today, not just for this month, but for years to come. I believe that that history should be taught in our schools.

Black history is British history. This year, Black History Month gives us a much-needed moment to reflect. 2020 has been a year of upheavals. Throughout the pandemic, there has been a call to action against racial injustice, and with Black Lives Matter in the UK and abroad, we have been forced to take stock of our failures as a nation. This is a pivotal moment for us to address societal ills against black people, to recognise that black history is British history, and to ensure that that history is woven into our schools curriculum.

The Macpherson report and the Windrush lessons learned review both underline the need for black history to be disseminated across the UK: they urge us to take pride and value black British history, to prevent racism and better to reflect the needs of a diverse society. At a time when polls from HOPE not hate indicate that the British public are ready for a more progressive debate on racism in the UK, now is the time for change. Does the Minister not agree that black people’s refusal to accept injustice and prejudice is awe inspiring? Will she finally agree to get the Government to commit to working with anti-racist organisations and other key stakeholders to conduct a review to diversify the curriculum so that it is fully reflective of modern British history?

Covid-19 Economic Support Package

Taiwo Owatemi Excerpts

Wednesday 14th October 2020 Commons Chamber

[Taiwo Owatemi (Coventry North West) (Lab)]

I am pleased to be speaking in the debate today. Yesterday, my hon. Friend the Member for Oxford East (Anneliese Dodds) raised a pertinent question with the Chancellor regarding the economic support available to individuals and businesses in the areas subject to additional public health restrictions. We have repeatedly spoken in the House about the Chancellor being out of touch with the financial needs of the businesses, employees and employers in our constituencies, and he is proving us right yet again. I ask him: what good is the job support scheme to businesses in Coventry North West if it does not provide crucial support to employees in tier 1 and tier 2 lockdown areas if businesses choose to close because of coronavirus restrictions? I will tell him: it does absolutely nothing.

The Chancellor’s sink-or-swim approach to the job support scheme is letting down my constituents who will not be able to access it. The job support scheme provides less security to employees than the furlough scheme. My constituents will go from receiving 80% of their wages to just 66% on the job support scheme—and that is only if people can work a third of their stipulated hours. If they cannot work, they do not receive anything. What does the Chancellor think will happen to people on lower incomes and people on zero-hours contracts? I will tell him: it will push them further into poverty, and possibly into financial destitution.

Financial support will apply only to businesses in regions under a tier 3 lockdown that are forced to close. The Chancellor has called the scheme a safety net for businesses, but it will not be a safety net for businesses that choose to shut down; nor will it be one for businesses that are told to close by local public health authorities. I do not know what the Chancellor considers to be a safety net, but this is not it. The financial support offered by the Government will do nothing for those who have been excluded from support from the very start of this pandemic, and it will do nothing for businesses that are not forced to close but need to. This is not fair and not right.

Her Majesty’s Revenue and Customs estimates that there are several hundred thousand fewer people on payroll since the beginning of the pandemic, and economists expect unemployment to increase, so what is the Chancellor doing to safeguard employees? We have already established that many people will fall through the gaps in the new financial scheme on offer. The Bank of England has estimated that the unemployment rate may well be 7.5% at the end of 2020. In Coventry North West, unemployment claimant figures have risen to 4,815, and I fear that number could rise more.

The Chancellor needs to ensure that economic support goes hand in hand with the imposition of local restrictions. We cannot have a one-size-fits-all tier system: it is doomed to fail from the very start. Were Labour in government, we would put in place a job recovery scheme that fixes the problems with the Government’s scheme, so that employers can keep more staff on rather than having to let people go. This would ensure that no one on the scheme would fall into poverty, and it would be open to all businesses impacted by the restrictions. A tightly designed and targeted scheme would also ensure that money is spent where it is most needed.