Social Security

Tim Farron Excerpts

Tuesday 5th May 2020 Commons Chamber

[Tim Farron (Westmorland and Lonsdale) (LD) [V]]

The employment allowance, of course, was born during the years of the coalition to help small businesses, charities and sports clubs to take on their first employees. The Liberal Democrats are proud of our legacy and commitment to understanding and meeting the needs of entrepreneurs and small businesses. This has never been more important than it is now, so the increase is a welcome development and we are very happy to support it. However, it will be of use only to those businesses that are able to stay in business. Our challenge is to ensure that small businesses and charities are able to stay afloat until we are out of lockdown, so that they can benefit from it. That is not a call to end or ease the lockdown soon; we have to be led by science and safety, not politics and impatience. My fear, though, is that the increase in the allowance could end up being the cherry on a cake that no longer exists. Put bluntly, it will be of no use to businesses that have gone to the wall.

The allowance increase, sadly, will have escaped the attention of many, given that it arrived just as the economy went into shock in the face of the covid-19 crisis. Here in the south lakes, that shock is being felt acutely. We are a community where volunteering is second nature, where small charities, community groups and sports clubs form the glue that binds us together, but for most, their income has disappeared, and Government support has not reached everyone. We are a community where one in four people work for themselves, hundreds of them new start-ups. Small employers, new employers and potential employers are the very people the employment allowance is there to help, and most of them have been closed or curtailed by the virus.

We claim to be the biggest visitor destination in the UK outside London, but the market squares, pubs, restaurants and hotels of the lakes and dales are still and silent. It is right that they are; we all know that the priority is to protect people, to save lives. The problem is that if hospitality and tourism are phased back into action in the autumn, the industry will have missed out on the business of the summer months that it relies on to get through the winter. If we do not provide long-term support for those businesses, we will be faced with tens of thousands of furloughed workers losing their jobs as soon as support ends. That will have a colossal impact on our communities in the south lakes and will push countless families into poverty.

I hope that Ministers share my determination to ensure that we keep businesses going now, so that employers are able to re-hire furloughed staff and to employ new staff after this is all over. For those in the tourism and hospitality business, that must mean committing to a 12-month funding settlement, to see them through to spring 2021. Anything less, and we will simply be delaying the collapse of hundreds of businesses until the autumn. I want those employers to be around to benefit from the raised employment allowance.

If you could live in a beautiful place like Cumbria and make a living, you just would. Well, thanks to improved broadband speeds, increasing numbers of people have done just that. We are one of the most entrepreneurial places in the country. Hundreds of people have set up their businesses here, underpinning our local communities. There has been an explosion in the number of new businesses based in spare bedrooms, on kitchen tables, in sheds or shared spaces. Often, these businesses do not expect to make much money—if any—in the first year or two; many work at a loss until the third or fourth year. Those are the very businesses that, until now, have not qualified for any support from Government during this crisis—those self-employed for less than a year, those working in shared spaces and those who work from home. Small B&Bs have also missed out. Many of these businesses have already had to close, leaving people’s dreams shattered and families experiencing desperate hardship and even destitution.

The announcement last weekend of a £617 million package for those who have fallen through the cracks is welcome, and I am grateful to Ministers for listening to us. But I confess that the details of this fund trouble me and my constituents. South Lakeland has such a large number of businesses hit, because of our reliance on tourism and hospitality, that the local council has distributed one of the largest hardship budgets in the country—£70 million, which is much more than places like Newcastle and Nottingham, with populations of three times our size. If this new money is divided out according to the size of population, South Lakeland will get about £2 million, which would leave hundreds of businesses with absolutely nothing. This announcement would, in that case, have given false hope.

I ask the Government to distribute on the basis of need and be willing to increase the sum available across the country if it turns out that people are missing out. I also ask for clarity on which businesses will be eligible for this support. For example, will it include those who are operating from home? I warmly welcome these regulations. We must do everything in our power to ensure that small employers survive this crisis, so that they are still around to use this money and create opportunities for others.