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Covid-19: Economic Package

Volume 676: debated on Tuesday 12 May 2020

To ask the Chancellor of the Exchequer if he will make a statement on the Government’s economic package in response to the covid-19 outbreak.

Thank you, Mr Speaker, for your warm wishes.

This Government’s plan is one of the most comprehensive anywhere in the world. We have provided billions of pounds of cash grants, tax cuts and loans for over 1 million businesses, tens of billions of pounds of deferred taxes, income protection for millions of the self-employed, and a strengthened safety net to protect millions of our most vulnerable people. These schemes speak to my and this Conservative Government’s values. We believe in the dignity of work, and we are doing everything we can to protect people currently unable to work.

Yesterday my right hon. Friend the Prime Minister set out our plan for the next phase of the public health response, and today I can confirm the next stage of our job retention scheme. This scheme has been a world-leading economic intervention, supporting livelihoods and protecting futures. Seven and a half million jobs have been furloughed—jobs we could have lost if we had not acted—and nearly 1 million businesses supported which could have closed shop for good.

As we reopen the economy, we will need to support people back to work. We will do so in a measured way. I can announce today that the job retention scheme will be extended for four months, until the end of October. By that point, we will have provided eight months of support to British people and businesses. Until the end of July, there will be no changes whatsoever, from August to October the scheme will continue for all sectors and regions of the UK, but with greater flexibility to support the transition back to work. Employers currently using the scheme will be able to bring furloughed employees back part time. We will ask employers to start sharing with the Government the cost of paying people’s salaries.

Full details will follow by the end of May, but I want to assure people today of one thing that will not change: workers will, through the combined efforts of the Government and employers, continue to receive the same level of overall support as they do now, at 80% of their current salary, up to £2,500 a month.

I am extending the scheme because I will not give up on the people who rely on it. Our message today is simple. We stood behind Britain’s workers and businesses as we came into this crisis and we will stand behind them as we come through on the other side.

I now call Anneliese Dodds, who is speaking virtually. I ask her to speak for no more than two minutes.

Thank you, Mr Speaker, for granting this urgent question. I would also like to wish the Chancellor many happy returns.

As a constructive Opposition, we want to work with the Government to ensure that people’s jobs and incomes are protected and the furlough scheme is a critical element of that. Many of the more than 6 million people who are currently furloughed were taken aback by comments made in the media by Government spokespeople suggesting that, for example, people needed to be weaned off an addiction to the scheme. There were many intimations that changes might have been announced to that scheme by the Chancellor, potentially in the media, without the opportunity for proper scrutiny.

I have only heard about these changes in the last few seconds. We will look at them very carefully, but there are some critical principles that the Chancellor surely must follow as he redesigns the scheme.

First, we must acknowledge that people did not want to be furloughed. It occurred through no choice of their own and through following the Government’s advice about the closure of sectors. It is critically important that they are not penalised for that choice.

I welcome the flexibility mentioned. We have asked for that repeatedly; it applies in many other countries. It has been a long time coming, but I welcome the fact that it is occurring now.

That flexibility includes an employer contribution, so the Chancellor needs to provide more information about that employer contribution now. He also surely needs to provide more information about alternatives to the scheme. Other countries have job creation, training schemes and redeployment schemes. We do not have those yet. Will the Chancellor work with me, trade unions, businesses, local authorities and further and higher education institutions to create the support that is so desperately needed?

I thank the shadow Chancellor for her warm wishes and for the constructive support for today’s announcement. I will address two specific points that she raised. First, the word addiction is not one that I have ever used and it is not one that I agree with. Nobody who is on the furlough scheme wants to be on the scheme. People up and down the country believe in the dignity of their work, of going to work and providing for their families. It is not their fault that their business has been asked to close. It is not their fault that they have been asked to stay at home. That is why I established the scheme to support those people and their livelihoods at this critical time. I wholeheartedly agree with the shadow Chancellor in that regard.

On the next steps, I am pleased to tell her that I have already been talking to the TUC and, indeed, the CBI about the future; helping those people to get back into work who, unfortunately, may lose their jobs through this period. That issue weighs heavily on my mind. Every person who loses their job through this difficult period is a person the Government are determined to stand behind, whether that is with new skills, new training or indeed through supporting businesses to create new jobs. We are determined to make sure that that happens. I look forward to continuing my conversations with Opposition Members and with the trade unions, the CBI and other business groups as we look forward to a brighter future. As we get through this crisis, people can come back to work and we can create the jobs and opportunities, and a brighter future for tomorrow.

I broadly welcome the statement the Chancellor has made relating to furlough and, in particular, the additional flexibilities that he has outlined, most notably about part-time working. However, as we come through this crisis, many businesses will be saddled with significant debts just at the time that we are looking to those businesses to invest and to grow the economy. Does he therefore agree that it is vital that the Government come forward as soon as possible with a clear plan as to how they are going to assist those companies with that indebtedness in terms of debt forbearance and equity finance so that they can fire up the economy and grow the jobs that the country will so desperately need?

As always, my right hon. Friend makes an excellent point. I agree that debt is not the answer to all businesses’ problems at this time, which is why we have provided business with unprecedented degrees of direct cash support, with cash grants of £10,000 or £25,000 for up to 1 million businesses and 750,000 businesses benefiting from a cut in their business taxes and tax deferrals. All of that will help. With regard to equity in supporting the future, I hope he will agree that the Future Fund that we have announced will be part of that solution, with the Government matching essentially quasi-equity investments in early-stage companies to ensure that they are here to power the growth and innovation we will need as we recover from this crisis.

I wish the Chancellor a very happy birthday. The coronavirus job retention scheme has kept people from unemployment at a cost to other parts of the UK Government’s spending and to the economy as a whole. I welcome his commitment to extend it to October and to look at flexibility in the scheme, because that is something that many, including the Scottish National party, have been calling for. We await the details of that, which I hope we will see before too long. Does he recognise that removing or reducing wage support levels in the furlough scheme prematurely would increase universal credit claims, force workers back to work before it is safe for them, and risk a second peak? The Scottish Government have been clear that the stay-at-home advice has not changed, so will the Chancellor commit today to ensuring that the job retention scheme will remain in place in Scotland, Wales and Northern Ireland if our lockdowns continue longer than in England? Lastly, will he commit to looking at the gaps within the scheme for new starters, and will he look at those businesses who are still waiting for money under the scheme, because he said that he would do whatever it takes, and if he does not fill those gaps, that will ring very hollow?

I thank the hon. Lady for her warm wishes as well. To clarify, there will be no reduction in the level of support for those on the scheme. That is the commitment that I made earlier, so I am not entirely sure whether I understood her question right. It is crystal clear that those on the scheme have the reassurance that the level of support they will receive will not be changed. Those wages and support will now be shared by the Government and employers, but the levels and percentages of support will not change. I committed to bringing forward further details by the end of this month, while we work through some of the technical details of implementing part-time furloughing. As I said at the outset, this is now an extension for four months to the end of October, which will provide eight months of support in total to all regions and all sectors of the United Kingdom. I think it provides a good, generous runway for businesses and firms to plan against, so that they can start getting back to work when the time is right, as per the Prime Minister’s plan that was outlined on Sunday and Monday.

We know that international comparisons should be made carefully, but I note that polling released yesterday showed that the UK is considered the best in the world for supporting businesses and jobs during the crisis, so what steps is the Chancellor taking to ensure that this success is continued for companies in Milton Keynes and elsewhere as we gradually come out of the lockdown?

I thank my hon. Friend for mentioning that. He is indeed right. I was pleased to see polling that showed that people in this country felt that businesses were well supported, as compared with almost any other developed country. Indeed, the full scale of the economic intervention that we have put in place as a percentage of GDP stands as one of the most comprehensive anywhere in the world. I am very happy to continue listening to my hon. Friend to see what more we should be doing to support his businesses in Milton Keynes as they look forward to a future when they can start to reopen, start to get their employees back to work and start to rebuild our economy as we emerge from this crisis.

I welcome the continuation of the furlough scheme and its new flexibility to allow part-time work. That is vital for businesses in Brighton, particularly those in tourism and hospitality. Will the Chancellor consider further support for that sector through a reduction in VAT on tourism? It is a policy that many of his Government MPs support. Will he consider revising the self-employed scheme by including small business owners who take their income in dividends, as well as those who combine PAYE with freelance work?

Those who work for their own companies can indeed avail themselves of the coronavirus job retention scheme for the PAYE part of their income already. With regard to support for the hospitality and leisure sector, I agree that it is the sector that has been most impacted by what we are all going through, which is why it is the sector that has received the most support, with cash grants of up to £25,000 for those businesses—almost a million are eligible—and an entire business rates holiday worth almost £12 billion for the entire 12 months of this financial year. I believe that to be considerable support, but, of course, as we emerge from this crisis I keep all economic measures under review.

May I thank the Chancellor for the speed with which he has managed to get so much money out to help my constituents in Bury? Does he agree with me that the coronavirus job retention scheme is one of the most generous in the world? I express my gratitude to him for supporting so many jobs in my constituency and throughout the country, many of which would have been lost without these schemes.

I thank my hon. Friend for his support, and he is absolutely right. In Bury, as elsewhere, businesses have benefited from the support that the Government have put in place. They have been able to retain their employees through using the scheme. That means that Bury, when we get through this crisis, can be in the forefront of making sure that our economy bounces back as strongly as it can. I look forward to hearing from him what more we can do to support his constituents and his businesses through this crisis.

The Mayor of Greater Manchester’s United We Stream initiative has raised thousands of pounds for our creative industries, which make a vital contribution to our economy and to socioemotional wellbeing. With the sector likely to be among the last to exit lockdown, and with many artists working on a freelance or self-employed basis, will the Chancellor confirm that full support will be given to that vital sector for as long as is needed?

I know that my right hon. Friend the Secretary of State for Digital, Culture, Media and Sport has engaged extensively with that sector as part of planning for a future when people can get back to work and sectors can reopen in a responsible and safe way. That work is already ongoing. Of course, many people in that sector are benefiting already from our self-employment income support scheme, which opens this week for applications. People will start receiving their lump sum payment as early as next week, and I know that will make an enormous difference to the many tens of thousands, if not hundreds of thousands of people who work in that sector and will benefit from that scheme.

May I too welcome the Chancellor’s announcement today on furlough? P&O and many ferry operators are benefiting from millions of pounds of support that the Chancellor has provided for furlough and freight. However, P&O, which is headquartered here in Dover, last night announced redundancy plans for more than a thousand jobs after its Dubai owners failed to provide the support that the company needs. Does the Chancellor agree with me that companies and their investors, such as Dubai, cannot simply rely on taxpayer handouts, but need to play their full part, investing and supporting British businesses and British jobs at this time?

My hon. Friend is an excellent advocate for the freight industry and the importance of the port in her town, which does so much to help fuel the growth of our country. That is why I was pleased to extend support to the sector, to maintain our vital freight links.

My hon. Friend is absolutely right: as I said at the outset of this crisis, we are in this together—everyone has to play their role, and that means employers and companies as well doing their bit to support and protect their staff to the best of their ability and pitch in to help get through this crisis. I would be happy to talk to her further if there is more that she thinks we can do.

Women are considerably more likely to be furloughed than men, and the disproportionate impact of covid-19 on our black, Asian and minority ethnic communities is already being investigated from a health perspective by Public Health England. Has the Chancellor assessed the equality impact of all his package of economic measures on women and our BAME communities? If so, will he publish that impact assessment?

What is clear and emerging is that the sectors and people most impacted by the lockdown are disproportionately women, as the hon. Member mentioned, and those in lower-paid sectors, who probably are financially less resilient. That is why the scheme is so important in providing job and income security to millions of people. That is why today I have made the decision to extend the scheme, to maximise the possibility that those people will have a job to go back to. The hon. Member can rest assured that I keep a very careful eye on all the impacts of the scheme. I do believe that it is benefiting some of the most vulnerable in our society today.

The Chancellor will be aware of widespread concern about the future of our commercial airlines—not least in constituencies such as mine near Heathrow, Gatwick and other major hubs. The CEO of International Airlines Group appeared yesterday before the Transport Committee and made it clear that job losses at British Airways were only being considered as a direct result of the pandemic. What further support might be available from the Government for UK aviation?

Companies in the aviation sector, like all others, can benefit from the considerable range of support measures already announced—indeed, I know that many companies in the sector are benefiting currently from the jobs retention programme. Of course, individual companies have the opportunity to engage with the Government on a bilateral basis, where that is appropriate, but it obviously would not be right for me to comment on those conversations.

May I give the Chancellor a small birthday present by welcoming the extension of the furlough scheme and the greater flexibility for employees coming off furlough—not least because the Liberal Democrats have been campaigning for an almost identical package? But may I urge him yet again to look at those employees and self-employed who have not been helped at all and are in dire straits—people who have moved jobs, and who were not on their employer’s payroll by mid-March? Will he consider the new starter scheme that I proposed in early April? Will he please review his refusal to properly help those self-employed people who operate from limited companies and who have just been cut adrift?

The self-employment scheme in this country remains one of the most generous and comprehensive anywhere in the world. It was designed to provide support to those people who have a different pattern of working. As I have explained previously to the right hon. Gentleman, there is a difficulty in distinguishing the dividends that company directors earn from the dividends that anyone might earn through earning a passive share portfolio.

I have seen the proposals that the right hon. Gentleman and others have sent. Of course, my team and I have considered and are considering those, but that does not take away from the fact that what has opened this week is a scheme that will support millions of those in self- employment and enable them to receive the same level of support as those in employment, starting with cash coming into their accounts as early as next week.

I congratulate my right hon. Friend on his announcement today, and also, in particular, on his handling of this crisis and the support he is providing to businesses and individuals during it.

Many of my constituents in Chesham and Amersham work for British Airways, which despite furloughing nearly 23,000 staff has been threatening to make over 12,000 staff redundant. Can my right hon. Friend send a clear message to British Airways today that with this extension it should now remove all threat of redundancy, which has been adding to the anxiety and stress of so many of its hard-working and in many cases long-serving staff?

Like my hon. Friend the Member for Bracknell (James Sunderland), my right hon. Friend the Member for Chesham and Amersham (Dame Cheryl Gillan) is right to advocate for and support her constituents employed by the airline industry, and she is right to urge employers to do the right thing at this difficult time. The Government have provided considerable support to companies to help them get through this crisis, and she knows what will benefit her constituents. I will continue to support her in those efforts to make sure that we can protect as many of those jobs as possible.

Prynhawn da, Mr Speaker. The Chancellor has said that he is doing everything he can, but has he seen the New Starter Justice campaign for people who started or were due to start a new job after 28 February and are still cut adrift from any help from the Chancellor and his schemes? Why has he thrown this particular group of hard-working British people under the bus?

When we announced the job retention scheme, I said clearly that it would apply to those of whom HMRC was aware on 28 February. We were able, while protecting the taxpayer against fraud, to extend that date to 19 March, the day before I made the announcement, which is reasonable, in the sense that without HMRC or the Government knowing whether someone was actually employed the scope for fraud would be considerable. I did not think it appropriate to expose the taxpayer to that.

That change to 19 March brought in 230,000 of the 350,000-odd people that the hon. Gentleman talks about. Yes, that left a number of people who could not be covered, but for a reason that I believe is defensible. The scheme is able to cover the 29.5 million people who were notified to HMRC on that date; indeed, 7.5 million of them are benefiting from it. We should not lose sight of that. The scheme is doing an enormous amount for several million people up and down this country.

Time and again, the Chancellor has stepped up to ensure that our businesses have what they need to get through this difficult period, and I welcome the measures announced today. The bounce- back loan scheme is another example of the unprecedented interventions that the Chancellor has made and this has been unequivocally welcomed by organisations such as the Federation of Small Businesses. Can my right hon. Friend confirm that work is continuing to be done to ensure that we increase the number of accredited lenders that provide bounce-back loans so that we can make sure we are getting funds to those businesses that need them, wherever they may be?

I thank my hon. Friend for his advice as we looked to design and improve our lending scheme. I very much value his direct links with business and his relaying that to me. If you will allow me Mr Speaker, I can update him and the House on the number of loans that have now been approved. I am pleased to say that more than a quarter of a million bounce-back loans have been approved—267,000—with over £8 billion of capital benefiting small and medium-sized companies up and down the UK. On top of that, 35,000 CBILS loans worth more than £6 billion have now been put out. Hundreds of thousands of businesses are benefiting from the loan schemes that my hon. Friend helped to implement, ensuring that they worked well and quickly for businesses.

As a result of the loss of income through both fundraising and small service charges, many small and local charities will be struggling financially despite being heavily involved and active in the covid-19 response and in supporting constituents. When will the Chancellor issue guidance to local authorities on providing grants to charities that are in receipt of local charitable rate relief but have up to now been excluded from securing the £10,000 grants from the small business grants fund?

Just over a week or so ago, we outlined plans for a top-up fund for local authorities worth more than £600 million nationally so that they could distribute further rate relief to the businesses that they thought were appropriate. Indeed, it would be up to those local authorities to make the decisions and they could well use the money for that purpose if they so wished.

We also unveiled a £750 million package to support charities through this crisis. They are an important part of the social fabric of our country. Charities are impacted in the same way that businesses and the rest of us are, and it is important that we maintain them through this crisis, not least for the valuable work that they do on the frontline, but also for the contribution they make to our civic society as we come out of this.

The Isle of Wight is Britain’s festival island, and we have a unique tourism sector that is supported by events in the arts, music and sport. Will the Chancellor confirm that the furlough extension will help islanders in that devastated part of the economy? Will Ministers meet me, and others, to discuss how we can further protect the visitor and festival economy, which relies on specific parts of the year, and sometimes only on weekends, to generate an entire annual livelihood?

Let me start by conveying the thanks of the whole House, and certainly of the Government, to my hon. Friend’s constituents for the role that they are playing in trialling the new app. That will be important as we look to gain control of this virus in the second and third phase of our approach to tackling it. Will he please pass on our thanks to all his constituents? I reassure him that they are very much in our minds. We know that the sector he mentioned is struggling and will need support. The document that the Government published yesterday spoke about creating an industry taskforce, and I look forward to working with my hon. Friend, and others, as we chart a future for those in the leisure, hospitality and tourism sectors.

The all-party group for disability, which I chair, believes it is crucial that the Chancellor accelerates efforts to include people with disabilities in the economic recovery plan, enabling a disability-inclusive covid-19 response. Will he address that issue by undertaking an impact assessment of the economic recovery plan, based on equalities principles?

The Government and the Treasury will, of course, undertake all appropriate equalities and disabilities assessments for policies as they are unveiled and as is required. I have talked about this issue in the past with the hon. Lady, and the Budget outlined something that she and I care very much about, which is the Changing Places campaign for those with complex disabilities. We created a fund to help local authorities and businesses to adapt or build new changing places that will benefit hundreds of thousands of those, especially young children, who suffer with complex disabilities, and who require different types of facilities so that they can enjoy time with their families out and about. I hope we can continue to work closely on that issue.

Has the Treasury made an assessment of how many employers are currently topping up the wages of furloughed workers to full pay? If the Government reduce the amount they are contributing, many employers may struggle to top up wages. What will the Government do if employers cannot top up wages?

As well as the furlough scheme, the Government have provided direct cash support to businesses in the form of cash grants or tax cuts, and allowed them to defer taxes such as VAT. We have also provided them with access to discounted and attractive loans to ease cashflow. I believe that in sum that represents a considerable amount of support for business, and we have now stretched and extended the furlough scheme to cover eight months. Sitting alongside the plan that the Prime Minister outlined, that will provide businesses with a generous and sufficient amount of time to help bring their employees back to work. Indeed, they will also benefit from the part-time flexibility to ramp up their operations.

I welcome the world-leading package of measures that we are providing to support livelihoods and businesses through this pandemic, which is helping a huge number of people in Runnymede and Weybridge. Aviation is crucial to my constituency due to our proximity to Heathrow, and many constituents have contacted me who are employees of not just BA but logistics firms and others associated with the aviation industry. Getting our planes flying again is crucial to our economy through air freight and just-in-time supply lines. Does my right hon. Friend agree that, in addition to direct support for the carriers and industry, we need to get planes flying again as soon as possible?

I know that my hon. Friend is rightly focused on that issue for his constituents, given the location of his constituency. Of course, aviation has been impacted considerably by this, but he is right; the best way to help, in the end, is for us to find a way to control this virus, live with it and reopen those parts of our economy that are currently closed. That is the best long-term way to provide the support for the industry and his constituents that we all want to see.

The extent of Government support available is of cold comfort to those who are still not receiving any support. New starters are being abandoned simply by accident of the date on which they happened to change jobs. Those workers could be helped if the Government would accept evidence of their employment in the form of a contract of employment. Many of these workers have paid taxes for years. Will the Chancellor reconsider his approach and take further action so that new starters are not left behind?

I do not have much more to add to my previous answer, but for those who do not benefit from this scheme or others, we have taken significant action, investing several billion pounds in strengthening our safety net in this country. Whether it is through tax credits, universal credit, the local housing allowance or the hardship fund provided to local authorities, the most vulnerable in our society through this crisis are seeing considerable extra support from Government to help them get through.

Like others, I am grateful to the Chancellor for his extension of the furlough scheme, which is a reverse birthday present from him to workers and firms in my constituency. He will want our brilliant creative industries to come out of this crisis intact, and he knows that many people working in them are freelancers or on short-term contracts. Can he give some hope to those producing world-class work, often in precarious circumstances, that their sector will survive and flourish again after this is all over?

My right hon. Friend is absolutely right; the creative industries play an incredibly important part in our economy in this country, and they are also one of our great exports around the world and add to our soft power. He is right that we should do everything we can to preserve the jewel that is that industry. As I said, I am talking to my right hon. Friend the Secretary of State for Digital, Culture, Media and Sport, who is engaged with that industry to find the safest way for those workers to get back to work. We all want to see that happen in a measured and safe way. He can rest assured that I am also thinking about it from an economic perspective and seeing whether our support schemes and everything else are optimised for that industry as we emerge from this recovery process.

The furlough scheme is hugely welcome, but it needs greater flexibility. I hear what the Chancellor says, but the Opposition have set out ways in which the furlough scheme arrangements could be adapted to include new starters who have just missed out without risking fraudulent payments. Will he give those proposals urgent and serious consideration?

We did give consideration to proposals that we received and worked with our systems, which is why we were able to extend the date from 28 February to 19 March, the day before I made the announcement. To me, that is a reasonable and defensible date to choose. It is important not to underestimate the operational challenge of creating these schemes and ensuring that they work for people. As I said at the time, from announcement to the scheme going live was a matter of weeks. Thousands of people worked their socks off to make that happen, and several million people’s pay packets are now being supported because that all works. These things are not straightforward to do, and changing them and adding complexity to them will simply make it more likely that they do not work and that people have to wait a lot longer to get the support they desperately need at this time.

I welcome the fantastic announcement about the coronavirus job retention scheme, and thank my right hon. Friend for all that his Department is doing to support businesses in Redcar and Cleveland, with the CJRS, the coronavirus business interruption loan scheme and the new bounce-back loans. Will he reassure me and employers in my constituency that this support will be kept under review so that it reaches the businesses that need it most?

I can give my hon. Friend and constituency neighbour exactly that reassurance. I thank him for all that he is doing to support his businesses and constituents at this time. I very much welcome the advice that he has given me, as he has fed back what he is hearing on the ground from businesses in the north-east. He and I have a shared ambition to make sure that Teesside drives our economic recovery as we come out of this situation, and I look forward to continuing those conversations with him.

Aberdeen has been hit by the double whammy of covid-19 and a massive drop in the oil price. Will the Chancellor tell us when he last had a conversation with the industry, and will he please give consideration to announcing sector-specific support in order to protect my constituents and those in other regions where employment is centred around oil and gas?

Regardless of the industry in which companies operate, they are able to benefit from our furlough scheme. That is something that we were keen to do. It is not necessarily replicated by every scheme around the world, but we thought that that comprehensive approach was the appropriate one. Many of the companies that the hon. Lady mentioned will be able to benefit from that scheme. Beyond that, my right hon. Friend the Business Secretary engages regularly with all sectors regarding their particular concerns, and I will continue to liaise closely with him.

I strongly welcome the extension of the job retention scheme. It is the most generous in the world, and is saving a huge number of jobs here in Harborough, Oadby and Wigston. One of the great successes of policy in recent years has been a huge reduction in youth unemployment, but the virus is inevitably going to disrupt a lot of apprenticeships and work placements. Is my right hon. Friend thinking hard about how we can limit or stop any rise in youth unemployment?

My hon. Friend is absolutely right. I know that he has put a lot of thought into this particular issue, and I look forward to hearing his ideas on it. As we emerge from this situation, we need to be cognisant of having the right support available for those who are most affected by this issue, especially those who are young and entering the labour force for the first time who will face this challenge, but also younger people who work in the disproportionately affected sectors of retail and hospitality; and that support might include skills, retraining and a dynamic labour market. This is about the economic impact on us all, and especially on those individuals; not having a close connection with the labour market at that early stage in their life is very damaging for their long-term prospects. I look forward to working with my hon. Friend to ensure that that does not happen.

If 800,000 businesses have benefited from the welcome job retention scheme, the 800,000-strong world-class automotive industry will be key to recovery, including Jaguar Land Rover, whose Jaguar factory lies at the heart of my constituency of Erdington. Does the Chancellor recognise that the continuation of the job retention scheme for as long as is necessary, together with welcome measures to help companies that are deeply in debt and battling with liquidity, will be crucial for the future, providing the necessary certainty upon which businesses, workers and trade unions can plan to rebuild?

I think I find myself in agreement with the hon. Member. He is fortunate to have such a fantastic company local to him. I know that that company and its workers will be pleased that the Government, and their representative, are advocating on their behalf. We have extended some of our loan schemes for larger companies—not Jaguar Land Rover specifically—and many companies in the automotive supply chain, for example, will now be able to benefit from our larger CBILS programme, which went live last week and is already lending billions of pounds. The hon. Gentleman is right; these various schemes are important and the industry that he mentions is critical to the UK. I look forward to ensuring that it can have as strong and swift a recovery as possible.

I, too, welcome the announcement the Chancellor has made today. It will be particularly welcome to the businesses in the leisure, hospitality and tourism sector, which are very important in my area and have been very hard hit. I welcome the fact that the Chancellor has extended the scheme to October. Should businesses plan on that scheme coming to an end in October if we are able to stick to the timetable set out by the Prime Minister in the Government’s recovery strategy, or is there any chance that the Chancellor will be able to extend the scheme? I think some certainty for businesses will be helpful.

We will of course keep everything under review, but my expectation is that by then the scheme should end. As I have said before, we have stretched and strained to be as generous as possible to businesses and workers. That is why we have made the decision we have made today, which is important to me personally, but of course, as I have also said, the scheme is expensive. It is the right thing to do—the cost of not acting would have been far higher—but it is not something that can continue indefinitely into the future. Eight months of total support is a considerable amount of time. Now that we have a plan from the Prime Minister, with a path to reopening those parts of our economy that are closed, I believe we can get the country back on track and get people back into work. This scheme will help them to do it in a measured and phased way, and protect as many jobs as possible.

Diolch yn fawr, Lefarydd. May I take the opportunity to wish penblwydd hapus to the Chancellor? In Wales, workplace restrictions have not been changed as many parts of the country have not yet passed the peak of infection. The economic taps must not therefore be turned off in Westminster before the public health emergency has subsided in Wales. Will the Chancellor ensure that the furlough scheme remains in place for as long as necessary and in such a form as to enable expert-led public health guidance to be followed in each nation?

As I have just said, and have said previously, this is a UK scheme. It applies equally to all regions, nations and sectors of the country. It is generous in its length, extending all the way to October, and I believe that provides sufficient runway and support to businesses wherever they might be in this country. But I thank the right hon. Lady for her warm wishes.

I commend my right hon. Friend and the Treasury team for bringing together the economic support package that has given businesses and families across the UK the support they need during the lockdown. Obviously, it is one of the most comprehensive packages in the world and my constituents are pleased that when they needed help this United Kingdom Government had their back. Can my right hon. Friend assure me that the work is in progress so that businesses, particularly in the tourism sector, are prepared for when the lockdown restrictions are eased, as that sector is a significant element of Delyn’s economy?

May I start by thanking my hon. Friend for everything he is doing not just for his constituents but in providing advice to me, using his own experience about how best we can support the economy and businesses at this time? I very much appreciate all the time and effort he has put into that and hopefully he can see the fruit of some of that work in the announcements that have been made. I can also give him that assurance on the tourism sector. That work is under way. The report talked about setting up a taskforce. I look forward to hearing his thoughts. I know how important it is to his constituency and others. The Culture Secretary and I look forward to engaging with him, creating a plan to make sure as many businesses as possible can safely open as soon as they can.

Many minimum wage workers have been furloughed. They are now expected to get by on just 80% of the minimum wage, even though rents, bills and food prices have not fallen. Will the Chancellor implement guarantees, so that no furloughed worker is ever forced to live on less than 100% of the national minimum wage?

The scheme, as it is designed, does provide income support of 80% of those wages. Indeed, where those wages are variable the scheme allows an average to be taken to benefit the employee. We have also strengthened the safety net, as I mentioned earlier. Crucially, employees who are furloughed are then able to work elsewhere as well to supplement their incomes. That flexibility is often unnoticed, but it is very helpful. I know many people are taking advantage of that to boost their incomes during this time and I think the scheme, as it is designed, provides the required support especially to those on the lowest pay.

The Chancellor has spoken about freelancers, who often work on short-term contracts or for personal service companies. In answer to the right hon. Member for Ashford (Damian Green), he talked about optimising the existing mechanisms for those people, but will he come forward today with the suggestion that there are concrete proposals in place? These are people with clear financial records and they often have accountants, so there is a track record. Will the Chancellor support these different types of self-employed people?

They are being supported. The scheme to support them goes live tomorrow, ahead of schedule. Those who are self-employed whose returns and earnings we are aware of will be contacted, and are already being contacted. They are able to apply from tomorrow and will receive cash in their accounts for a three-month grant as early as next week. The scheme is one of the most generous in the world for those who are self-employed.

Excellent birthday work on the furlough scheme from the Chancellor; the flexibility that is being added to it is very welcome. When he announced the original furlough scheme, many of us in this House and outside in the country talked about the self-employed and asked for parity. He then acted but, notwithstanding the issues that he knows I have with the people left out of the self-employment support scheme, that scheme will come to an end very shortly. To return to the call for parity, can we assume that he is working on an extension to the self-employed income support scheme? Many people will be listening carefully to what he says about that today.

My hon. Friend has spoken passionately about this issue before, and I look forward to continuing conversations with him. I am of course keeping those measures under review. As I said at the time, there is of course parity in the level of support, but the nature of the schemes is different in the sense that employers who have been closed and have to make employment decisions, potentially 45 days in advance in respect of redundancies, do need to be treated slightly differently in that regard. I will of course continue to keep all things, including that scheme, under review.

Women who are eligible for the self-employed income support scheme but have taken a period of maternity leave since 2016 could receive up to one third less financial support. This discriminates against women on lower incomes in particular, penalises families with young children, and exacerbates the gender pay gap. Will the Chancellor therefore exempt periods of maternity leave from the self-employed income support scheme calculations?

People have ups and downs and variations in their earnings for all sorts of reasons, whether because of maternity, ill health or something else. To deal with that, we have provided an average of income over up to three years on a look-back basis, to smooth out all the ups and downs in all people’s incomes. That was something that stakeholder groups were keen to see at the beginning, it is something that we delivered, and I believe it provides the fairest way to treat everybody, on a level playing field, whatever their circumstances. A three-years averaging of earnings seems to me to be a reasonable approach to take.

Does my right hon. Friend agree that we need an economic strategy that balances getting some businesses support when they cannot reopen with encouraging others to go back to work, and that today we have got that balance right?

My hon. Friend is absolutely right: the plan that the Government and the Prime Minister have outlined does exactly what she says. For those who can go back to work now, they should do so in a safe way, which the Secretary of State for Business, Energy and Industrial Strategy will talk about later. As the rest of our economy reopens, people will have the benefit of a furlough scheme that extends all the way to October and provides for part-time flexibility. The combination of all those things means that my hon. Friend’s local businesses and many others can take the time that they need to get firing on all cylinders again.

It is estimated that the economic impact of the pandemic will hit the west midlands the hardest. It was announced this week that a manufacturer and supplier to Jaguar Land Rover in Coventry South has gone into administration, putting 600 jobs at risk. Will the Government therefore step up efforts to protect manufacturing jobs, especially in the automotive industry, and invest in them to provide green sustainable jobs for the future?

I am very sorry to hear about the potential job losses in the hon. Member’s constituency. To me, every job lost during this period is heartbreaking, which is why I am doing my absolute utmost to provide the support that I can to protect as many as possible. I have said that clearly I cannot—and nor could any of us—save every single job or business, but the loans, the cash grants and the job retention scheme will all play a vital role in saving many millions of jobs and businesses, particularly in the automotive supply chain. The hon. Member is right that that is an important part of our economy, and it deserves our support to ensure that it can be a strong part of our recovery.

The generous and unprecedented schemes that my right hon. Friend has put in place are doing a tremendous job, protecting thousands of employees, small businesses and the self-employed in my constituency. Many in West Sussex work in aviation, so in addition to heartily welcoming today’s extension of the excellent job retention scheme, may I ask him at least to consider temporarily suspending air passenger duty as well as testing passengers on arrival as an alternative to the 14-day quarantine, to help this vital sector of the economy?

I thank my hon. Friend for his support and for the advice he has provided to me, with his extensive experience of business and of his constituency. He knows that I care deeply about the aviation sector. My right hon. Friends the Transport Secretary and the Foreign Secretary are considering the issues he raised. In particular, the Government have been clear that further detail on the quarantine measures will be outlined in due course, but I will pass on his suggestion.

In North East Fife, much of the economy is seasonal and workers, who had contracts often agreed months in advance, face no income and no access to existing support. Fundraising for some golf caddies in St Andrews is under way and, although I applaud local community efforts and their generosity, rather than have the seasonal workforce rely on charity, what support can the Chancellor offer them this year so that they can return next year?

Those who were in seasonal work can use an average of their earnings over a period for furlough payments, or indeed the same month on a year-over-year basis if that is a more generous way to calculate their eligibility. That is the most generous way to treat those in seasonal employment under the scheme and ensure that we reflect their earnings appropriately.

These measures are exactly what manufacturing firms in Dudley South have called for as they start to reopen. Will the Chancellor undertake to work with our excellent Mayor, Andy Street, to ensure that the needs of west midlands manufacturing and its employees are fully considered as they start the task of rebuilding our economy?

I can give my hon. Friend that reassurance. I look forward to speaking further to him and the excellent Mayor, Andy Street, as we all work together to drive the west midlands economy as part of the economic recovery plan. He, the Mayor and his businesses can play a leading role in that.

I am glad that the Chancellor has confounded recent worrying rumours regarding the job retention scheme that caused grave concern to my constituents. Will he liaise with the Department for Business, Energy and Industrial Strategy to ensure that workers are not forced back to work in dangerous conditions, bearing in mind that the Health and Safety Executive has issued no enforcement actions as yet and that employers may struggle to pay the 20% he asks for while ensuring employee safety?

My right hon. Friend the Business Secretary will be here shortly to provide a fuller answer to the hon. Lady’s question, but it is right that employees should not work in unsafe environments and we have put in place measures to ensure that that will not be the case, with updated guidance, risk assessments and increased resources for the Health and Safety Executive. The Business Secretary will update the House in more detail.

Mr Speaker, I hope you and your family are well.

About 19% of Calder Valley residents work in the manufacturing sector, and thousands of them are incredibly grateful for the Chancellor’s ingenuity around the furlough scheme. Will my right hon. Friend, on his birthday, confirm how today’s announcements on furlough will be a massive help to those manufacturers as they phase the return to work and deal with social distancing in the workplace?

Manufacturing organisations in particular were keen to have the flexibility to bring employees back in shifts on a part-time basis while being able to furlough them for the remainder of the time as manufacturers ramp up operations, so I am pleased that we could deliver that flexibility today for the second part of the scheme. I think that that will be valuable to manufacturers in my hon. Friend’s constituency and help them get back up to speed as quickly as possible in a way that they can afford as well.

Ranjith Chandrapala lived in Hanwell in my constituency, and he drove the 92 bus until three weeks ago, before he died of covid-19, leaving behind a loving family, including his daughter, Leshie. A week before Ranjith died, the Government announced a life assurance scheme for the families of health and care workers on the frontline during the covid-19 outbreak. Will the Chancellor commit to extending the scheme to other frontline workers and, in particular, to the families of bus drivers such as Ranjith?

My heart goes out to the family of the hon. Gentleman’s constituent for what they have suffered. They, like many others up and down the country, are losing loved ones who are serving on the frontline. They deserve nothing but our admiration, respect and gratitude. I know that my right hon. Friend the Health Secretary has put in place a scheme to help those families who have lost loved ones during this crisis.

I thank the Chancellor for all the schemes that he has introduced so far. In particular, I welcome the extension of the job retention scheme today. I wonder whether he is willing to look at a couple of aspects of the other schemes. There are two schemes in particular that would benefit from the introduction of a taper as, currently, there are cliff edges in support for both business grants and the self-employed income support scheme. It means that, in the case of two people in broadly equivalent positions, one could be entitled to support and one not. Would he be willing at least to consider the idea of a taper with these schemes?

Introducing new measures to the schemes at this point would not be possible or desirable because it would just delay their operation. The problem with tapers is that there is still always an end point at the other end of the taper. With regard to the self-employment scheme, this covers 95% of all those who are self-employed, which is pretty comprehensive coverage. The 5% who are not covered have an average income of £200,000. Of course, there will be hard cases just the other side, but, on average, this is a group with relatively high earnings.

I thank the Treasury for a very comprehensive set of measures for businesses and employers across the country, including those in my constituency of Meon Valley. Will my right hon. Friend tell me when further guidance on the discretionary grant funding will be announced, because some councils are not happy with using their discretion? I believe, though, that the Treasury has made it perfectly clear from the start that the list was not exhaustive and that councils should use their own discretion.

I thank my hon. Friend for her support. I think I am safe in saying that the guidance will be issued imminently. Of course there will be some broad guidelines on whom we think that support should be targeted at, but of course local authorities will have the ultimate discretion.

Although I welcome the announcement on furlough, the Chancellor knows that the Government’s covid response would have completely stalled without local government, yet our councils are now financially on the brink. The extra funding does not cover all the costs, which is something that Ministers promised. Will he ensure that our councils are fully reimbursed for all covid-related costs and lost income and protect the sector that has protected us?

In a moment of nostalgia, let me say that the hon. Gentleman and I have a shared passion for local government and an admiration for the work that councils do, and I know that he will remain an advocate of theirs. They have been provided with more than £3 billion of extra support. Of course, we are in constant dialogue with those in local government, whether in social care or others, to ensure that they get the financial resources that they need.

I thank the Chancellor for his announcement today, which is exactly what Amber Valley businesses have been asking for. Is there any way he can allow them to bring back some employees part-time, earlier than his extension, so that they can perhaps reopen their businesses next month rather than having to wait until a later date?

That is a very fair question and one that I have looked at. There is an issue of operational complexity in designing the part-time aspect of the scheme in consultation with business and unions to ensure that we can enforce it properly. I think that the earliest that we can reasonably do it is in the extension period, as I mentioned. Of course, if there are ways for us to do it sooner, we will, but I would not want to commit to that today as it is a complicated thing to get right.

Yesterday I asked the Prime Minister about engagement with the devolved Governments in Wales, Northern Ireland and Scotland. I would like to try again today, and, I hope, receive a more detailed response from the Chancellor. Can he please outline what specific conversations he had with the devolved Administrations about these changes and when those conversations took place?

My right hon. Friend the Chief Secretary to the Treasury speaks regularly to his counterparts in the devolved Administrations, and we engage with them regularly. I am pleased to say that more than £8 billion[Official Report, 2 June 2020, Vol. 676, c. 4MC.] of Barnett consequentials has been provided to devolved Administrations across the UK as they have also responded to the virus, and that will continue to be the case. We will get through this as one nation, all together.

Sitting suspended.

On resuming, the House entered into hybrid substantive proceedings (Order, 22 April).

[NB: [V] denotes a Member contributing virtually.]