Coronavirus Job Retention Scheme

Wes Streeting Excerpts

Thursday 17th September 2020 Commons Chamber

[Wes Streeting (Ilford North) (Lab)]

I congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) and the Backbench Business Committee on securing this debate.

We have heard some excellent contributions from across the House, and it has been reassuring to hear so much consensus, not just on the Labour Benches, but from SNP Members and the Liberal Democrats. We even heard a short but sweet contribution from the hon. Member for Strangford (Jim Shannon), and not forgetting of course the contribution from Plaid Cymru too.

Alongside those excellent contributions was a rather depressing sense of déjà vu, because just last week the shadow Chancellor warned that our country was in the grip of a jobs crisis, and she warned that the crisis would intensify if the Government failed to change course. This week, those warnings came to pass, with the latest unemployment figures. Between March and August, 695,000 workers disappeared from the payroll and the claimant count more than doubled and now stands at 2.7 million. The number of vacancies in August was almost half that we saw at the same time last year. We have warned for months that a one-size-fits-all approach risks fuelling unemployment, ruining lives and risking the economic recovery that we need following this crisis; but, instead of listening, the Chancellor seems determined to roll back one of the Government’s most effective responses to this crisis, the job retention scheme.

A total of 9.6 million jobs have been furloughed through the job retention scheme, including 17,500 in my constituency. It peaked at 8.9 million on 8 May, and most recent estimates showed 13% of all jobs still furloughed in the two weeks up to 9 August. As we heard from my hon. Friend the Member for Leicester East (Claudia Webbe), in so many sectors the picture is far bleaker: 51% of those in arts, entertainment and recreation furloughed; 27% of those in accommodation and food services furloughed; and 19% of those in transport and storage furloughed.

That is not surprising. We have said consistently that there are many businesses and some sectors that are inevitably hit harder and for longer, through no fault of their own. Indeed, at this very moment more communities across the country are facing local lockdown. More businesses are facing closure or severe disruption through no fault of their own.

As my hon. Friend the Member for Coventry South (Zarah Sultana) reminded us, the Chancellor said at the outset of the crisis that he would do “whatever it takes”, but there are communities across this country—millions of people, in fact—who have had no support at all, who do not think the Chancellor is doing whatever it takes. In fact, a Chancellor who we were happy to support when he announced the job retention scheme is looking increasingly stubborn and inflexible, determined to roll back the furlough scheme by asking employers already to contribute more to the costs and rolling it up altogether in just six weeks’ time.

The IPPR has warned that 2 million jobs could be lost as a result of that single decision. As my hon. Friend the Member for Sheffield, Hallam (Olivia Blake) spoke of so powerfully, the economic crisis we are experiencing is likely to worsen if the Government continue on this course, entrenching inequality in our country that was already intolerable before this crisis even began.

The hon. Member for South Cambridgeshire (Anthony Browne) pointed out, possibly quite reasonably, that it is unusual to see a policy from a Conservative Chancellor receiving so much support and acclamation from the Opposition Benches, but there is a good reason for that. As we have already heard from other hon. Members, the job retention scheme did not fall out of the sky and it certainly was not the brainchild of the Chancellor alone. The reason it was so successful was that the Chancellor listened to calls from the Opposition for wage support and even got business representatives and the trade unions around the table to design the scheme.

There is a model there for the Chancellor to follow: one that is listening, one that is inclusive and one that recognises that if we are serious about tackling economic inequality and injustice and about getting Britain working again, we need the voice of the workers at the table. Sadly, the Chancellor has stopped listening to the voice of labour—the official voice of labour represented here on the Opposition Benches, and the official voice of labour that we heard this week at the TUC congress.

If the Chancellor will not listen to the voice of labour, if he has stopped caring about the interests of labour and workers across the country, perhaps he will listen to business voices—the CBI, the Federation of Small Businesses, the British Chamber of Commerce, and businesses up and down the country—calling on him to show some understanding of the long-tail impact of this public health crisis and the impact it is having on their businesses and their ability to keep good people in good jobs, in viable businesses that just need that bit more time.

Perhaps the Chancellor will listen to the economists and the think tanks urging him to show a more flexible approach to furlough and to take, as we have called for, a sector-by-sector approach to ending the furlough scheme. If he will not listen to them, perhaps he will listen to his own MPs. An increasing number of Conservative MPs have said publicly what many more are saying privately in the Tea Room: that it is a mistake to wind up the furlough scheme and a mistake to take this one-size-fits-all approach.

Indeed, that call was reflected in the cross-party but Conservative-led Treasury Committee of this House.

We heard from the hon. Member for Wimbledon (Stephen Hammond) that the Government are looking at taking a more creative and innovative approach. We have heard again today, as we have heard so often from Government Members, that it would be a mistake to continue with a blanket extension of the furlough scheme. No one has ever called for a blanket extension of the furlough scheme. The fact that so many fewer people are currently furloughed tells us that a blanket extension is not necessary. However, we know that many people in many sectors continue to be disproportionately affected and it is right that the Government should reflect that in a more flexible approach to the job retention scheme.

We shall doubtless hear again in the next debate the point that my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) made so powerfully. Let us not forget the 3 million people in this country who have not benefited from the Chancellor’s one-size-fits-all approach: the excluded. Other countries show us that a different way and a different choice are possible. There have been extended schemes in the Republic of Ireland, France and Germany. In a powerful speech, my hon. Friend the Member for York Central (Rachael Maskell) mentioned that the twin towns of Münster in Germany and Dijon in France have extended schemes. Our Government’s approach just does not cut the mustard.

As my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) among others pointed out, we are still waiting for the aviation deal that was promised in March. While on that point, I must reply to the claim by Scottish National party Members that the Scottish Labour party opposes calling on the UK Government to extend the furlough scheme. Last night, the SNP attempted to rewrite a Scottish Labour motion setting out the action needed by the Scottish Government to bail out the aviation sector and provide the support it needs. I cannot say I am surprised because it is a pattern that we often see. SNP Members are happy to come here and rightly challenge the UK Government to use their powers and resources to support jobs, workers and industries across the country, but the SNP Government are not prepared to use their own powers and resources. They are good at passing the buck, but terrible at taking responsibility for their decisions.

The hon. Member for Sevenoaks (Laura Trott) made some powerful points about the need to get women into work. She talked about the support that should be on offer for women, particularly childcare, retraining and providing new opportunities for people who find themselves out of work. That support is not yet in place and I hope that the Government hear her call.

We are told that we should let people lose their jobs now and be released from furlough because they will find other jobs. Those who make that claim are apparently ignorant of the fact that there are no other jobs yet for people to go to and that putting people out of work now means that they are staring at the grim reality of Britain’s social insecurity system.

I urge the Government to consider the costs of not acting, of allowing unemployment to rise further, of the personal tragedies and human misery that means for families across the country, and of the further, avoidable damage it will inflict on our regional economies and our economy as a whole. Maybe then those on the Treasury Bench will go back to the Department of Health and Social Care and say that until the test, track and trace system is working properly, the economic and public health damage will be self-inflicted by the Government, and Britain will pay a heavy price, not just now but in the longer term. That will be on the Government.

--- Later in debate ---

[Jesse Norman]

I have not seen the National Institute of Economic and Social Research analysis that the hon. Gentleman talks about, which is somewhat embarrassing, since I am a governor of the national institute—I shall ask it to forward that to me. I am pleased to say that it is independent of its governors and rightly so. I will certainly look at that.

The point I would make is that although the scheme as such is winding down, Government support is very much not. It continues across a very wide range of packages and includes, as colleagues rightly mentioned, the bonus. I think that that is much underestimated by colleagues—it is a very important element. That guarantees a one-off payment of £1,000 to employers for each furloughed employee they bring back to do meaningful work and earn an average of £520 a month between November and January, and who continues to be employed by the same employer as at 31 January 2021.

[Wes Streeting]

Will the Minister give way?

[Jesse Norman]

I have very little time—if the hon. Member does not mind, I will proceed. That bonus is an important aspect because it provides a marginal benefit to a very large group of relatively low-paid employees. Of course, we have also launched the kickstart scheme.

Let me pick up a couple of points that have been raised. The hon. Member for North Ayrshire and Arran said that it is very important for Scotland to have powers of its own in this context. I echo again—I am becoming like a broken record—the hon. Member for Ilford North who said that the Scottish Government are good at passing the buck and bad at taking responsibility. The Scottish Government House has tax-raising powers devolved through the Silk commission. Let it use those. At the moment, the vast majority of money spent in Scotland and in Wales is spent by and raised through local government—regional government—but raised through UK Government, and that is crucial.

My hon. Friend the Member for Warrington South (Andy Carter) rightly pointed out that the Chancellor has included many flexibilities in the design of the furlough scheme, and it is important to recognise that it has evolved over time. It has not been a fixed thing. My hon. Friend the Member for South Cambridgeshire (Anthony Browne) rightly pointed out that the unemployment drop had been much less in the UK than elsewhere and that there had been a rapid fall in furloughing. He pointed to the tapering out that that implied and he is right about that.

The hon. Member for Richmond Park (Sarah Olney) was right to raise the point about the need for green jobs. The Government absolutely share that view, and that is one of the things that successive policies have focused on. I have no doubt that it will be an important part of the consideration in the net-zero review and all the other measures that are presently in place.

Quickly, on the issue of fraud—if I may for a second before winding up, Mr Deputy Speaker—it is much misunderstood; the planning assumptions that were outlined in the evidence from the CEO of HMRC are just planning assumptions, and we wait to see what the final numbers will be after enforcement. He has said in terms that he does not rule out penalties and potentially criminal procedures to bring that back under control—