Covid-19 Economic Support Package

Toby Perkins Excerpts

Wednesday 14th October 2020 Commons Chamber

[Anneliese Dodds]

I regret that the hon. Member did not answer the question that I asked him, which was whether he knew of any other area of the country that had been treated in the same way as his constituency by being provided with business-related support. He could not answer that question; the reason why is that it appears that no other area has been. A radically different approach is being taken to different parts of the country, so local leaders and local businesses cannot plan because they do not know whether or not support will be there.

[Mr Toby Perkins (Chesterfield) (Lab)]

Will my hon. Friend give way?

[Anneliese Dodds]

I will make a little progress, if my hon. Friend does not mind.

We need to find out from the Government why they have not used the £1.3 billion underspend from the grants programme, which was already allocated as business support, for local areas to direct at businesses that need that help. Yesterday, the Chief Secretary said that the money was not available for use now because, in his words, “the need” had been “met”. That beggars belief. The need clearly has not been met. The Government should reallocate that funding on a consistent basis, so that businesses in the hardest-hit areas can get support.

What possible justification can there be for local areas getting control of test, trace and isolate only once they are into tier 3 and thus facing rapidly rising infection rates? As the debate following this one will indicate, the Government have poured vast amounts of public money into private contracts to deliver a system that is simply not working. Labour-run Wales has shown how locally delivered tracing is vastly more effective than a contracted-out system. When will the Chancellor’s Government stop dithering, follow the evidence and get a grip on test, track and trace?

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[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.

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[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.

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[David Linden]

That was a wonderful addition to try to be a nice Parliamentary Private Secretary, but I am afraid that the hon. Gentleman clearly has absolutely no idea about the £40 million package put forward by the Scottish Government for the hospitality sector. Perhaps when he is sitting on the south coast of England dreaming up these lovely interventions to please his Whips, he would do well to read the full briefing paper.

The leaders of businesses across the UK agree that ending the furlough and job retention scheme is a very irresponsible and reckless decision, so to avoid mass redundancies, the UK Government must extend the furlough scheme in full. With the huge rise in covid-19 that we have seen so far with the second wave, and with the winter months approaching, now is not the time to be taking chances on job losses.

[Mr Perkins]

The hon. Member is absolutely right about the appalling health and economic consequences of this. Do he and his party support the advice from SAGE for a two-week circuit-breaker so that we can get on top of this health crisis and try to give the Government time to get test and trace to work? Does he support what the Labour party has called for?

[David Linden]

One of the things that we are seeing in Scotland is that test and trace is working a lot better, and that is because we have not hived it off to, for example, Serco. We have been very clear that we will follow the scientific advice and we will do our very best to get that balance. That is what we have seen with the restrictions that came into place last week in Scotland. We will see how that goes. We are always keeping things under review, but the reality is that we need to follow the advice and get a balanced approach. That is exactly what we are doing, and I am sure that we will see that bearing fruit.

I turn to the issue of the excluded 3 million. The SNP has consistently and continually raised the 3 million who were excluded from the Chancellor’s initial financial support packages back in the spring. Let us be clear that the Treasury continues, I am afraid, to exclude artists, freelancers and the newly self-employed from these recent economic plans. Three million people were shut out of the vital financial support that they desperately needed during the first wave of the pandemic and they were left to face huge financial insecurity, with their livelihoods and businesses put at risk. Rather than listening to the calls of these 3 million people, the Chancellor has decided to leave behind the self-employed yet again in his economic plans, with a 70% replacement of profits being replaced in November with just 20%.

Another group that has repeatedly been excluded from the Chancellor’s financial packages has been the arts and culture sector. We saw this week the closure of all Cineworld theatres across the UK, including the one in my constituency in Parkhead. I again call on him to provide sector-specific support for the arts and culture sector, which we know will continue to suffer during the second wave of the pandemic. [Interruption.] I hear the hon. Member for South Suffolk (James Cartlidge) chuntering away that the Chancellor has just done that, but many people in our constituencies in the arts and culture sector make it clear to us that that support does not go far enough. If the Chancellor has done that, why is Cineworld in Parkhead closing?

I have described thus far a very tough image of countless jobs being at risk. Many sectors are vulnerable and some businesses are wondering if they will make it to the new year, but the rising cases should emphasise to the House that we are still in the midst of this pandemic, which has already delivered severe blows to people’s incomes and financial security, with the most vulnerable people facing a disproportionate economic hit. That is why the SNP has repeatedly called upon the Government to make the £20 increase to universal credit permanent, especially after the latest findings from the Institute for Fiscal Studies, warning that 4 million families could see their support slashed if the Tory Government refuses to make that £20 uplift permanent.

The Joseph Rowntree Foundation has highlighted that nearly three quarters of a million more people, including 300,000 children, could be forced into poverty if the uplift is not made permanent. That must serve as a wake-up call for the Government. The Chancellor cannot continue to turn a blind eye to the vast inequality that exists right across the UK. With the winter months approaching, the poorest and most vulnerable people will suffer the most from the Chancellor’s economic plans, and it is quite clear that he has a choice in front of him and that he needs to do much better by them.

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[Mr Toby Perkins (Chesterfield) (Lab)]

I was really frustrated by the sense, in some of the interventions on my hon. Friend the shadow Chancellor, that the Labour party, in making this extremely serious suggestion, was taking lightly the economic consequences of going into a circuit-breaker arrangement. We should not be starting from here. We have all been saying throughout the course of the past seven months that the approach the Government are taking was not working. They failed on PPE. They were slow into lockdown. The testing and tracing regime has been an expensive fiasco.

We have seen the approach that the Government have taken that has got us to this point and has been failing, and they then turn to us and say, “Don’t you realise there are costs to the economy of trying to get on top of this health crisis?” Of course we know that it is costing the economy: we have been saying that throughout the course of the past seven months. But we have now reached a point where the Government have lost control of coronavirus and only the measures proposed by the Leader of the Opposition yesterday, recommended by SAGE, are likely to get us back on top of the virus. So there is no naivety from our perspective about the costs that are attached to this, but we also see the costs that are attached to constantly, inch by inch, surrendering ground to the virus, as we have done over the course of the past seven months.

Many people are confused. They do not know which area they are in. We look at Sky News and it tells us that Derbyshire is in tier 2. In actual fact, only a very small part of Derbyshire is in tier 2. The majority of it is in tier 1. I have people saying, “Well, am I allowed to travel into tier 2 to get a meal? Can someone from tier 2 come into tier 1?” because they have booked a table and want to meet their friends in an area where they are allowed to do that. There is utter confusion about what is actually happening out there.

As I have said to the Chancellor previously, saying that pubs can stay open in tier 2 areas, but you cannot meet anyone there other than your own household is really disingenuous. All the publicans I speak to say that moving to that approach, on top of the other restrictions, simply makes their businesses unviable. In most cases, they would be better off not paying staff and staying closed than they would be opening under those terms, yet the Government say, “You’re allowed to open, so we do not consider we have anything else to do.”

The Chancellor is fond of saying how much he has spent, but how much has he wasted? My hon. Friend the Member for Oxford East alluded to a variety of things that are leaving people out in the cold. We all know 3 million self-employed people have been excluded, but what about all the self-employed people who were given money unconditionally when many of them were carrying on working? There was no conditionality on the self-employed scheme which said, “The money is there for you if you are forced to not work, if you are in a business that is unable to carry on,” yet 3 million people are left out in the cold.

The Government have let people down. The strongest sign of that fact is how few Conservative speakers there have been in this debate. Just six Back-Bench Tories wanted to stand up and speak up for the approach the Government are taking. That speaks louder than any speeches we have heard.