Economy Update

Toby Perkins Excerpts

Wednesday 16th June 2021 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

Five years ago, my friend and colleague Jo Cox was murdered. There is not a day goes by when I do not think of her, and I know that on both sides of the House she is missed dearly.

All the way through this pandemic we have said that the economic and health responses must go together. That means keeping support in place for as long as the public health measures demand it. When the public health restrictions are extended, as they were by the Prime Minister on Monday, the economic support should be extended too; otherwise we risk falling at the final hurdle. Having spent billions of pounds supporting the economy, it would be tragic to see thousands of businesses go to the wall just because the Government withdrew support a few weeks too soon. We are not calling for forever support, but for economic support that matches the timetable for opening up that the Government have set. That is the right thing for business, for workers, and for our economy too.

Let us be clear about why we are here today: the Government’s delay in putting India on to the red list has allowed a dangerous new variant to enter our country. That is why we have the highest covid infection rate per person across the whole of Europe—all because the Prime Minister wanted his VIP trip to India. It was vain and short-sighted and has been devastating for public health. As well as the health impact, our assessment, using Office for National Statistics data, tells us that the delay in reopening will cost the UK economy £4.7 billion. That is money that is not being spent in British businesses at a crucial time in our recovery. That £4.7 billion would have been used by businesses to pay commercial rents, to pay people’s wages, to invest, to take on new staff, and to pay taxes into the Treasury as well.

Of course I welcome what the Chief Secretary has to say today on commercial evictions, but the truth is that if the Chancellor believed that this economic package was enough, he would be here announcing it himself. Whatever this is, it is not doing “whatever it takes” to support British businesses and our economy. Given that the Government have moved the goalposts, let me ask the Chief Secretary why Ministers have not delayed the employer contributions to furlough, due to start on 1 July. Employers are being asked to pay more when they cannot even properly open for business.

The vast majority of the 1.8 million people still on furlough are in the very sectors most affected by the ongoing restrictions: hospitality, live events and travel. On 1 July, loans to those businesses start having to be repaid. The self-employed and those excluded from financial support will be worried about their futures. Grants are ending, business rate bills are arriving and furlough is tapering off—all immediately after the Government have announced an extension to restrictions. How on earth can the Treasury justify turning off support and sending businesses new tax bills when the Government are saying that those businesses cannot even open?

On Monday, the Prime Minister told the country that we need to learn to live with the virus. Where is the much-needed plan that would enable us to do that? Where is the plan for greater ventilation in workplaces, including public buildings and schools? Where is the plan to shift contact tracing to a local level, where we know it works best—not in a centralised, Serco-led call centre? Where is the proper support for people needing to self-isolate? Those are all essential measures to save lives and livelihoods, and to avoid the stop-start approach that has characterised the Government’s response to the pandemic.

Given the WhatsApp messages from the Prime Minister about his own Health Secretary that have been revealed today—Madam Deputy Speaker, I will use more diplomatic language than the Prime Minister could manage—how can we have confidence in Government Ministers when the Prime Minister thinks that the person in charge of the pandemic response is “hopeless”?

[Mr Toby Perkins (Chesterfield) (Lab)]

Not just “hopeless”.

[Rachel Reeves]

Not just “hopeless”. People have given up so much over the last year. We have pulled together and shown the best of our country. People have done everything that was asked of them and much, much more. We should not be in this position today. Businesses and workers do not deserve to have the rug pulled from under their feet at the eleventh hour. We want to see businesses make it through the pandemic and thrive again, because they are an important part of what makes our country so great and they are essential for our economic recovery. We need them and they need us today. That is why the economic support we have should match the health restrictions that are still in place, and that is what the Government have failed to deliver today.

--- Later in debate ---

[Steve Barclay]

Of course, decisions on quantitative easing are for the Bank of England, which is independent. The last time I looked, I think the initial response to the global financial crisis was approximately £75 billion, and there has been about a twelvefold increase in QE since then, so I understand my hon. Friend’s underlying point. Ultimately, what my right hon. Friend the Chancellor has been focused on is the plan for jobs and supporting the economic recovery. We can see from the output data that the economy grew by 2.3% in April, as I said earlier, and GDP data has come out of the Office for Budget Responsibility forecast.

However, as my hon. Friend, who takes a deep interest in the matter, well knows, the picture remains challenging. There were 1.9%—or half a million—fewer employees in May than in February 2020, and 3.4 million people are still on furlough. It is a challenging picture, but I think that the plan for jobs is working, and the data suggests that.

[Mr Toby Perkins (Chesterfield) (Lab)]

The impact of these restrictions on Britain’s pubs has been very tough indeed, but it has been even worse for nightclubs that have been unable to open at all. It seems entirely wrong to me that, from 1 July, a nightclub that is unable to open will be paying a 33% business rate bill and seeing an increase in its furlough contributions. Given that the Government’s failure has forced them to extend how long the nightclubs are closed for, will the Chief Secretary confirm that he will consider whether nightclubs should no longer be expected to pay that 33% on their business rates?

[Steve Barclay]

The hon. Gentleman raises a perfectly legitimate point about how acutely that sector in particular has been affected, as I think everyone in government recognises, but I do not think it fair to say that the Government have not announced any measures that reflect those challenges. Indeed, on commercial rent, he will have heard in my statement today’s specific announcement that applies to the sector. There are also other things, such as the furlough going long, the restart grant and a number of things within the comprehensive package, that are obviously of benefit to nightclubs.