(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on economic support available to individuals and businesses in areas of the country subject to additional public health restrictions.
Yesterday, the Prime Minister and the Chancellor set out further measures to support local authorities through the crisis. On Friday, the Chancellor set out how we will support jobs in every part of the UK through an extension of the job support scheme, and these announcements build on the Chancellor’s September statement on the winter economic plan.
Throughout the pandemic the economic policy focus has been clear—to save jobs. Last month, we set out our plans to help viable businesses that can open through the job support scheme. However, businesses that are required to close due to coronavirus restrictions will also need our help. On Friday, the Chancellor announced the expansion of the job support scheme. Where coronavirus restrictions legally require business premises to close, we will pay up to two thirds of an employee’s salary, up to £2,100 a month, if they cannot work for a week or more. The scheme is nationwide and will run for six months.
In addition, businesses in England required to close will be eligible for a non-repayable cash grant of up to £3,000 a month. This can be used for any business costs. On Friday the Chancellor and I agreed with the First Minister of Wales, the First and Deputy First Ministers of Northern Ireland and the Finance Minister of Scotland on this additional package of support. We have now also guaranteed an extra £1.3 billion of funding to the Scottish, Welsh and Northern Irish Administrations if they decide to do something similar, bringing total guaranteed Barnett funding for this year to £14 billion.
In addition, as announced yesterday, we are providing local authorities in England with around £1 billion to protect vital services, and up to £500 million for local authorities at high or very high risk.
These measures build on the Government’s economic package, one of the most generous in the world, and underline our unwavering commitment to the people of this country.
Just over a month ago the Conservatives passed a motion in the House stating that
“any deviation from this Government’s proposed plan will cause damage to the United Kingdom economy.”
The first deviation came two weeks later when the Chancellor announced his sink-or-swim job support scheme, design faults in which are already leading to substantial and unnecessary job losses. The second deviation came as a belated response to the imposition of localised restrictions announced on television last Friday, with further measures announced yesterday—yet Leicester, for example, has been under localised restrictions for over 100 days. The Chancellor told us to learn our new limits as we go. His handling of the economic crisis is testing patience to its limits, especially the patience of those whose jobs are threatened.
The Government must answer many critical questions, but here are just three. First, why will local areas be provided with support for test, trace and isolate only once they are already in tier 3? This is indefensible. Secondly, there is £1.3 billion-worth of unspent local grants. Why will the Government not allow this money to be used to support local businesses in affected areas? Thirdly, why are workers in closed businesses expected to face poverty as a result of the businesses they work for doing the right thing?
It is slightly odd that Opposition Front Benchers talk about deviation when their position has deviated as much as it has, not least on the curfew, which they said they would support yet refused to.
On the hon. Lady’s points of substance, the package of support announced by the Chancellor and the Prime Minister did support local authorities with an additional £1 billion, as I said in my opening remarks, plus a further £500 million to address trace and trace locally, reflecting the fact that the Government are listening to local leaders and bringing forward responses. We saw that with the additional funding allocated to Merseyside and to Scotland, Wales and Northern Ireland—again reflecting our listening in conversations with the First Ministers of Scotland, Wales and Northern Ireland.
The hon. Lady makes a fair point about underspends that has been made by a number of colleagues. She is right to point to the sheer extent of support that we have offered, including the grants of £10,000 and £25,000. To deliver them at pace, they were allocated on the estimations that we had. As a result, the actual spend that has been required has led to some local authorities having very big underspends and others not. If we were to say that the authorities where the estimates were incorrect should benefit disproportionately, we would be accused of treating some unfairly compared with others. We met the need that was addressed at that time through the awards.
It is right from a fiscal point of view that the underspends are returned because they are surplus to the requirement on which they were allocated. In last week’s urgent question issues were raised by Merseyside Members, and ministerial colleagues engaged and listened and the funding for Merseyside more than doubled per head.
It is a slightly odd line of attack for the Opposition to say that we should not bring back underspends where they met their need but the estimations were inaccurate, yet not use the money to respond to the legitimate needs of areas such as Merseyside and elsewhere that are being moved into tier 3.
Order. Can I help the Minister? He is meant to be speaking through the Chair and not to the other end of the Chamber, and I hope that we can work together on this. Has he finished the answer to that question?
My right hon. Friend and the Chancellor of the Exchequer have done a great deal to support the economy, but a careful balance must be struck between protecting against the virus and avoiding further economic destruction. With that in mind, what scientific evidence has the Treasury received that closing pubs at 10 pm gets the balance right?
We have to balance the evidence that the Government receive from a range of quarters. My right hon. Friend will recall that following the initial advice from the Scientific Advisory Group for Emergencies, the Government came forward with a range of measures, such as the rule of six and the curfew. Indeed, if we look at the projections that were made at that time, we see that we could potentially have had 49,000 or so daily cases by 14 October when in actual fact the figure on that date was 12,872. That indicates the fact that the package of measures put in place by the Prime Minister and the Chancellor of the Exchequer has had an influence. However, listening to the SAGE advice, we recognise that we need to go further, and that is why the tiered approach has been set out.
The Chancellor of the Exchequer is proving exactly what Tory values are with this dogged determination to return to 1980s levels of unemployment. Switching away from the rhetoric of “whatever it takes” to “hard choices” exposes the fact that protecting jobs was an empty promise even before the end of furlough. He is risking more than 60,000 jobs in Scotland alone. The Institute for Fiscal Studies is clear. It says:
“Despite the claim by Chancellor Rishi Sunak last week that he would ‘always balance the books’, this will not happen, and he would be most unwise to try.”
Mass unemployment is a terrible policy, so will the Minister urge his boss to change course even at this late stage and extend furlough to save jobs, use returned moneys to help those who have been excluded, and listen to the SNP demands for an £80 billion stimulus package? Will he listen to the nearly 70% of the Scottish public who want financial powers devolved to Scotland, or are the Government going to simply plough ahead, ignoring Scotland’s needs and further proving that Scotland needs the powers of independence?
It is a slightly odd premise to say that the Conservative Government are not supporting the response when we have spent more than £200 billion as part of that response, when we are currently supporting nearly half a million jobs in Scotland, when 8.9 million people across the United Kingdom have benefited from the furlough scheme and more than half of those are back in their jobs, and when more than 65,000 businesses in Scotland have benefited from our loan scheme. However, the hon. Gentleman is right in one aspect of his question. This Government are true to Conservative values and those are the values of the Union. It is through the shared broad shoulders that we are able to put in place the fiscal package of support that has enabled us to protect as many jobs in Scotland and around the UK as we have.
Surely the Minister will recognise that the Welsh Government face the same task as UK Ministers in needing to manage their budget in the face of the unprecedented pressures brought about by the pandemic. That task is made harder by the lack of transparency from the UK Treasury. We know that the IFS has called on the UK Treasury to follow Wales’s example in publishing budget adjustments in full so that we know what announcements apply to Wales and how much budget is available. Will the Minister today agree to publish the information around the decisions so that we have transparency and Welsh Ministers can make decisions with confidence?
The hon. Gentleman talks about transparency for the Welsh Government. The Chancellor had a call last Friday, which I joined, with the First Minister of Wales as part of our transparency with the Welsh Government, so it is slightly odd to say that we are not being transparent. However, the hon. Gentleman is right that there are issues that need to be managed by the devolved Administrations, and the concern he sets out is exactly why we provided the up-front guarantee on Barnett consequentials. We recognise that, so that the Welsh Government can make decisions in advance of knowing what the Barnett consequentials are, it is important to give a forward-looking guarantee. That is why we gave the additional guarantee of £1.3 billion to the devolved Administrations, including the Welsh Government, as a response to the issue that he raises.
A tenth of pubs have not reopened since lockdown in March while two thirds were already trading at a loss, even before restricted opening times, mandatory table service and the new restrictions announced yesterday. Will my right hon. Friend look at the support that is available for pubs that are not yet compelled to close, but are legally prevented from operating economically, and in particular at state aid limits that threaten to prevent 10,000 pubs from receiving the support they need? Without that support, many thousands of pubs will close their doors and never reopen.
My hon. Friend is a champion of the pub sector and he speaks to the fact that it faces many challenges, but that is why we have been trying to strike a balance. Some would say the curfew is insufficient, but part of it is about recognising the very real pressures on the pub sector that he speaks to. Other colleagues in the House sometimes talk of the Sweden model but, as he will know, in Sweden the 2 metre rule is often more difficult for the hospitality sector and the pubs to adjust to. Ultimately, that is why the Chancellor set out the wider package of support, recognising the concerns he speaks of with the tax deferrals, the loans, the business rate support and the measures on VAT, which are targeted at the sector because of the very real concerns he correctly articulates.
My Aberavon constituents are increasingly concerned about the practice of firing then rehiring, whereby unscrupulous employers are using the pandemic as a cover to sack their employees and then rehire them on inferior terms and conditions. What steps are the Government taking to tackle this completely unacceptable practice and to exclude firms that engage in this behaviour from Government support schemes?
The hon. Gentleman raises a legitimate concern that is shared across the House. It is wrong for companies to act in that way. One purpose of the furlough is to retain that link between the labour market, the person and their job. The furlough bonus is designed to strengthen that link, so people are brought back. He takes a constructive approach to these issues and I am happy to work with him in the weeks and months ahead, because this is a practice that all of us in the House would condemn. The schemes we have designed try to retain the link with the worker to prevent that sort of practice.
Stockton South has some of the best bars, pubs, restaurants and breweries in the country, and many play an important role at the heart of the community. So far, they have benefited from a fantastic package of support, but the tier 2 restrictions pose a huge challenge. What will the Government do to protect jobs and ensure that we do not hospitalise our hospitality sector?
It is about getting the right balance because, ultimately, the most damaging thing for those pubs in tier 2 would be a further escalation of the virus and a situation in which they faced further restrictions. We have sought to ensure that they can continue trading through tier 2, while having alongside that the package of support for jobs, which the Chancellor set out in our winter plan to back those jobs with Government support, as well as a cash flow package. Cash flow will remain a key challenge as we go through the winter crisis, which is why we have such an extensive package supporting it.
I am sure the Minister was as concerned as me to hear reports that those people with businesses who take out bounce back loans to help them to follow the Government rules and survive this economic crisis—not just in their interest, but in all our interests—could face action up to and including repossession of their home if they struggle to repay those loans. Will he reassure not just the House, but people across the country, including in my constituency of Edinburgh West, that this Government will not allow that misery to be heaped on the misery already being suffered?
The very favourable terms of the bounce back loans were designed to deliver with speed. This was an initial challenge of the coronavirus business interruption loan scheme; we received feedback from debate in the House and elsewhere that the speed was not there, so that was part of the design for the bounce back loans. Another part of the design was the Government guarantee to get that credit to people. We have extended access to that scheme and the possible repayment period, so that issue should not be crystallising at this point. Clearly we need to look at the risk with regard to repayments. As I said to the hon. Member for Aberavon (Stephen Kinnock), I am happy to work with colleagues around the House, but the hon. Lady will be well aware of the package of measures that we have put in place to protect people vis-à-vis their mortgages and to protect renters from eviction.
Is there any specific evidence that swimming pools and gyms are centres for covid transmission? Has any research been done into rising obesity and unfitness levels, and has any research been done into rising unemployment caused by the closure of gyms and pools that is now happening in parts of the UK?
In some ways, that is slightly more of a Health question than a Treasury question, but I recognise that there is read-across from those businesses into the economy. In short, the opinion of the chief medical officer and the chief scientific officer is that those businesses do carry significantly more risk, which is why they have been harder hit in the guidance that has been issued. The package of support that the Chancellor set out recognises that businesses that are closed need additional support, which is why the measures announced by the Prime Minister and the Chancellor yesterday spoke exactly to the issue of businesses that have been closed due to the guidelines.
The wisdom and necessity of some of the restrictions introduced yesterday have been questioned by leaders of cities in the north of England, by businesses and by the workers who are going to be affected, so it is right that the Government should introduce a package of support for businesses that are forced to close. However, there are many businesses that have not been instructed to close, but which will be forced to because of the restrictions placed on them. For example, the hospitality industry faces curfews, restrictions on table numbers and on who can sit at tables, and so on. How does this package of support assure those businesses that they are not going to be killed off by the restrictions that have been placed on them? They have been put in the firing line, yet seem to have been left without any level of support at all, given the conditions attached to this economic package.
The right hon. Gentleman speaks to an important issue, which was at the heart of the job support scheme’s design: recognising businesses that are not in closure, but which have difficulty bringing people back full time. The scheme provides support. The employer pays the first third, and the remaining amount is split three ways, with the Government supporting. Additionally, there is the wider package of measures, including support to local authorities to get better compliance, which is in the interests of businesses. The £1 billion to local authorities, the £500 million for local test and trace services, the business loans and the tax deferrals are all targeted at the sector that the right hon. Gentleman is talking about: businesses that can still trade and are not closed, but which do face further pressure. The winter plan sets out that support.
Care homes across the country are struggling to survive, and the areas with greater restrictions are particularly dealing with unprecedented levels of vacancies. What are the Government doing to support those vacancies and prevent the forced closure of care homes, which would in turn lead to many thousands of vulnerable people being rehoused or moved out across the community?
My hon. Friend raises an important point. There is a strong interplay between the workforce challenges and the financial viability of the care home sector. One of the biggest risk factors is transmission as a result of staff, particularly agency staff, moving between care homes. He will know—and I know from my time as a Health Minister—that the financial pressures of that sector are not new pressures from this covid period; they are of long standing. The first tier of the £3.7 billion package of support that was initially allocated to local authorities was particularly directed at the adult social care sector. My hon. Friend will be aware that we are now on the second tranche of infection control funding to support these sectors. He speaks to a very real issue, which we are monitoring closely, and which is at the heart of how we address staff transfers between care homes and the infection risk that such transfers pose.
The Government have said that schools will be among the last to close under any covid restrictions or lockdowns. Headteachers in my constituency have told me that they are having to pay additional costs for cleaning to keep schools safe. When will the Government announce additional funding for schools, so that this money does not come out of schools’ budgets, risking deficit for them?
As the Minister responsible for Government spending on behalf of the Chancellor, I would want to look closely at why the school in the hon. Gentleman’s constituency is saying that that very significant uplift in funding for schools last year does not appear to be reaching the frontline. The education funding settlement in the 2019 spending round should more than cover the cleaning costs. I will happily look at that, but if he looks at the funding settlement allocated in SR19, I think he will accept that it was a very generous one.
It is not surprising that more and more Members are calling for more Government support, because the Government are forcing more and more businesses, particularly in the hospitality sector, out of business. The Chief Secretary says that his priority is to help business. The best way to help businesses is to let them get on and do business. We are going bankrupt as a nation—there will not be the money to pay for the NHS or pensions. What is the Treasury doing to row back against other parts of the Government and insist that we must allow British business to operate? He did not answer the question from the Chairman of the Select Committee, my right hon. Friend the Member for Central Devon (Mel Stride)—what is the scientific evidence for pubs closing at 10 o’clock? Is he leading the fight to help Britain to stay in business?
With respect, I did answer it. I pointed to the projection given by the chief medical officer and chief scientific adviser at that time, the SAGE guidance and the fact that the package of measures put in place by the Prime Minister has resulted in a lower infection risk. The CMO and others would recognise that this is a range of measures. My right hon. Friend says that the Government have gone too far and that there is no evidence for the curfew. The tenor of most of the questions one gets is that we have not moved far enough and should be taking more drastic actions. That speaks to the fact that this is a balanced judgment. One needs to look at the range of measures we are taking, and that is what I would refer him to.
My constituents in Cardiff South and Penarth and the Vale of Glamorgan are under a local lockdown and dealing with the economic pressures that that brings. Does the Chief Secretary agree that it is deeply disappointing that major local employers such as British Gas/Centrica are engaging in the type of “fire and rehire” tactics that we have seen others try to use, such as British Airways? What message does he have for the chief executive of British Gas/Centrica about those measures, which I believe are completely unacceptable in the current climate?
I do not think it is acceptable to have a “fire and rehire” culture. The hon. Member for Aberavon (Stephen Kinnock) put it very well in his question, and I echo those sentiments. This is an area of common ground across the House. The package of measures we have put in place is to retain the link between a worker and their business, and that is very much the Government’s approach.
My right hon. Friend may remember that I raised with him last week the issue of tourism businesses in north Wales, which have been severely impacted by the decision of the Welsh Government to impose movement restrictions. Many of those businesses now face the prospect of closure, but they are not being required to close by the Government, and there is little help being offered by the Welsh Government. The expansion of the job support scheme last week was welcome, but that only benefits businesses that have been required to close by the relevant Administration. What further support can Her Majesty’s Government offer to Welsh tourism businesses, which are so badly affected by the current state of affairs?
Among the range of measures that we have put in place as support, one speaks directly to my right hon. Friend’s issue, which is the rent support of up to £3,000 for businesses that are forced to close. The Welsh Government can then use Barnett consequential funding to support businesses and to design a scheme as they see fit, but it is for the Welsh Government to design those schemes, not the UK Government. That is what devolution entails. What we have done through the comprehensive package of measures that we have put in place is ensure that there is Barnett consequential funding to allow the Welsh Government to put that support in place.
Like infectious diseases of the past, covid is a disease of poverty. Various indicators, including cuts to local authority funding, show that regional inequalities have been exacerbated over the past decade. Contrary to the Minister’s earlier remarks about the generosity of the packages to local authorities, only 10% of costs associated with the pandemic have been reimbursed by the Government. What is the Minister’s assessment of the actual impact that the recent announcement of measures have had on the Government’s ambition to level up?
If the hon. Lady looks at international comparators, she will see that the Government’s package of support—more than £200 billion—is generous. I point her to the job support scheme, for example. A number of colleagues across the House question whether the 67% is sufficient, but the point is that it is dynamic in conjunction with the additional funding that has been put into welfare. [Interruption.] If the hon. Lady lets me answer the question, she will hear that I am talking about the support for people in businesses that have closed, which is an issue that all colleagues across the House take very seriously. [Interruption.] Well, that applies to regional equality.
Opposition Members may not like the answer, but the question was: how does the UK compare with international comparators? I am pointing to the fact that the package of measures put in place—the furlough at 80% for eight months—was much more generous than those of most other countries. The business support package, including business rents, tax deferrals, loans, such as the bounce back loans and help to grow loans—we can go through the full list—bears comparison. The question over the past 24 hours is whether the latest measures bear international comparison. The point I was making is that if one looks at the French, German, Italian and other schemes, the two-thirds support for those businesses that are closed, coupled with a dynamic relationship with the support on universal credit, does bear favourable comparison with those, which is why I stand by my comment that, internationally, the UK has a world-leading package.
Further to the question from my hon. Friend the Member for Dudley South (Mike Wood) and the right hon. Member for East Antrim (Sammy Wilson), the tier 2 restrictions on social mixing are cutting the legs away from the hospitality industry. Equally, even in tier 3, restaurants will not necessarily be closed, but the fact remains that people are just not going to them. May I implore my right hon. Friend to extend the £3,000 grant to all hospitality venues in tiers 2 and 3 regardless of whether they are told to close? The industry is dying, because people are trying to do the right thing and not mix. Chief Secretary, the industries are open in name only. Please look at extending the available help before the industry is destroyed.
I hear the concerns of my right hon. Friend, but there is a balance that needs to be struck between the comprehensive nature and the fiscal cost of the range of packages that we have put in place and the measures that we have taken to control the virus. The balance that we have struck, in line with the advice that we have received, is about how we control the virus with the wider implications not only for the economy, but for non-covid health issues as well. That is the balance that we are striking. Of course it is attractive for him to say that we should keep spending more and more, but we have already committed more than £200 billion.
The Prime Minister has been clear that the Government’s response to the covid crisis will follow the science. Last night, on a conference call with Professor Stephen Powys, the medical director for England, the hon. Member for Windsor (Adam Afriyie) and my hon. Friend the Member for Gateshead (Ian Mearns) asked about the science behind the 10 pm curfew on pubs and restaurants. Professor Powys said that there was no specific advice and, in his words, it was a “policy decision”. Given that thousands of jobs and businesses are at risk in tier 2 areas such as the north-east, can the Minister tell us what the logic is behind this policy decision?
As the right hon. Gentleman will know, that same SAGE guidance also says that there are multiple anecdotal reports of outbreaks linked to bars, and the Public Health England case control study also identifies visits to entertainment venues as a risk factor. It comes back to the point about balance. Some in the House say that there is a risk of infection in these hospitality venues and we should close them entirely; others say that we should have no restrictions at all. We have taken our decision on the basis that compliance tends to decrease later in the evening and that there are links to outbreaks in these venues. That is the balance that we have been striking.
My right hon. Friend will be aware that there has been a high degree of public opprobrium for employers who have taken advantage of the furlough scheme and then engaged in poor employment practice. Returning to “fire and rehire”, will he consider an immediate guillotine on any employer who sacked 50% or more of their staff and then rehired some or all on reduced pay, so as to disqualify those employers from any further form of direct Government support, including the furlough retention bonus?
It is very many years since I gave legal advice as a community lawyer, but one of the things I remember is that in employment law there is often a lot of complexity around what can and cannot be done. The wider point that has been raised in the House, and which my hon. Friend’s question points to, is that there is a consensus that it is not acceptable for businesses to be doing that. In the very first statement that my right hon. Friend the Chancellor gave as we started on the response to covid, he said that how people conduct themselves throughout this pandemic will be remembered. With regard to those businesses that do act in this way, we will obviously need to look at that in due course.
Given the Chief Secretary’s answers on “fire and rehire”, which I am very much heartened to hear, I hope that he will back my Employment (Dismissal and Re-employment) Bill. With no aviation support package as promised, the job support scheme riddled with holes and the abolition of airside tax-free shopping, further debt or job losses are the only options for firms. It is akin to 1980s policies of “sink or swim”. Last week’s statement was completely silent on the sector. Is it now Treasury policy to write off aviation, making tens of thousands of jobs unviable?
The reality is that the aerospace and aviation sectors have received over £8.5 billion through the covid corporate financing facility. Grants for research and development, loans and export guarantees are also expected over the next 18 months. My right hon. Friend the Secretary of State for Transport recently launched the Global Travel Taskforce, which underscores the Government’s commitment to this sector. The hon. Gentleman talks about support. The aviation sector has benefited from our comprehensive package of measures, whether it is the furlough or tax deferral schemes, or all the other measures that we have put in place. That is all part of the wider support that we have given to UK business as a result of the broad shoulders we have as a United Kingdom.
UKHospitality reports trade down by 40% to 60% due to the ban on the indoor mixing of households. Can I therefore add my name to that of other colleagues who have called for my right hon. Friend to commit to urgently reviewing what targeted support could be provided for enterprises stuck in tier 2, which, as it stands, receive very little specific help but will still suffer huge losses of trade from additional restrictions that come with tier 2, and ultimately will really struggle to stay open?
The most important thing for businesses in tier 2 is that we are able to control the virus. That is why the Government are investing as heavily as we are in track and trace—over £12 billion so far—and enabling businesses in tier 2 to retain their staff, which, again, is what the winter plan and the job support package is doing. The Government have made targeted interventions in support of businesses in tier 2, but we need to balance that against the wider fiscal position that we face.
The Minister will surely know by now that my local authority of Rhondda Cynon Taf has had local restrictions imposed on it for some weeks now. The Chancellor, when he can be bothered to show up, talks a good game, but it is clear that this Government do not care about people in communities across Wales. It was only earlier this year that Pontypridd was decimated by the worst flooding for many decades, and the UK Government simply sat on their hands and watched as homes and businesses were devastated. The Minister now has an opportunity to redeem himself and this Government. We need action now on the money that was promised, so what are his plans to finally assist the 3 million people who have been excluded from the Government support packages thus far?
On the issue of the “excluded” campaign, we have covered this pretty much every time we have come to the House, for the reasons we have set out. On support for Wales, the point the hon. Lady makes is at odds with the reality; in the urgent question last week, the hon. Member for Rhondda (Chris Bryant) raised the issue of some specific flood damage support, and between then and now we have addressed it, and I have written to him indicating the support available. The hon. Lady makes a point about the wider support without any mention of the guarantee on Barnett consequentials that has been given. It is unprecedented for the Government to give a guarantee up front on Barnett consequentials, yet she does not even mention it in her question.
Track and Trace nationally gets a bad press, wrongly in my view, but when we add a local tier, with local people employed, the success rate on contacts climbs. Calderdale’s local tier takes the success rate on contacts to almost 90%. How much extra support is being given to these local tiers, which are another tool in the armoury to help protect business and local residents?
My hon. Friend is absolutely right about the importance of benefiting from the local knowledge on track and trace, which is why the Prime Minister and the Chancellor announced an additional £500 million to address exactly the point my hon. Friend highlights about the benefit of working closely with local directors of public health. That is exactly what we are doing, and the funding announced by the Prime Minister and Chancellor yesterday will enable that work to accelerate.
Yesterday, I held a roundtable with hospitality businesses facing tier 2 restrictions, at which a restaurant owner said that his business would just bleed out with the economic support that was available. They asked whether we could look at increasing the intervention rate for the job support scheme in November in order to be more generous, because otherwise they will have to let go of their staff and there is the potential for large-scale closures of hospitality businesses. What additional measures can the Government bring forward for hospitality businesses that are under tier 2 restrictions?
Again, I appreciate the concerns the hon. Gentleman raises on behalf of businesses in his constituency, but, as I said to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) a moment ago, by international standards the package of support the Chancellor has put in place stands fair comparison. That interaction between the support for those jobs and businesses that are able to be open, and the additional £7 billion of welfare support through universal credit, provides dynamic support for the workers to whom the hon. Gentleman refers.
My right hon. Friend spoke a few moments ago about the important role being played by universal credit at this time, so may I press him again on the Treasury’s intentions on the temporary uplift in universal credit? It is one thing for a Government to reduce a planned rate of increase of a benefit or even to freeze a benefit, but it is another thing altogether to give extra money to some of the poorest people in the country and then take it away. That is precisely what we are on course to do next April unless we change course, so will the Minister address that issue?
My right hon. Friend raised exactly the same issue during our urgent question last week, and I know he has a huge understanding of it from his time as Secretary of State for Work and Pensions. He knows full well that the announcement made was a temporary one to deal with the immediate consequences of the covid pandemic, and in all these decisions we need to balance the competing pressures at a particular time with the wider fiscal position.
Fish and seafood wholesalers have been hit hard by a decline in demand from the hospitality sector. I have been contacted by My Fish Company, which is based in Fleetwood and which is concerned that the Government’s domestic seafood supply scheme appears to favour the larger national companies because of the short period of time in which to make an application and the level of resources that would require. So what reassurances can the Chief Secretary give my constituents and companies based in Fleetwood, many of which are small and medium-sized enterprises, that the Government scheme is going to deliver for them?
When we agreed that scheme, it was very much with SMEs in mind. I would be quite keen to look at the delivery of that and to speak to colleagues in the Department for Environment, Food and Rural Affairs. As the hon. Member knows, as part of this wider package of support, and after listening to businesses such as the ones to which she refers, we put in place a £10 million support package in England for the fishing sector. That was about recognising that the restaurant trade in particular as a market had been hit and also that exports had been hit. We recognised that there was a pressure in the fishing sector and we provided support for it.
I am grateful to the hon. Lady for drawing the House’s attention to the support that the Government have given to the fishing sector. If there is a particular constituency issue, I will ask DEFRA colleagues to look at it.
In Bassetlaw and north Nottinghamshire, we are now subject to tier 2 restrictions in line with Nottingham and the rest of the county, despite having significantly lower rates. Despite the tremendous support that has been offered so far, some in the hospitality sector are really struggling, as we have heard from colleagues in the Chamber, so will the Minister please tell us what can be done for those in tier 2 to help them to get through this incredibly difficult time? Will he also try to keep this under review?
In part, it is our winter plan to support those businesses in terms of the staff they are able to bring back. There is no gap between the end of the furlough scheme, which has run for eight months—by international standards, an extremely generous measure—and the start of the job support scheme. On top of that, there are the measures that my right hon. Friend the Chancellor announced on the extension of loans to help with cash flow, and on top of that there are the measures that the Prime Minister and the Chancellor announced yesterday—the extra £1 billion, the extra £500 million to local authorities, to help those businesses to control those things. That is ultimately why, collectively, we all have a responsibility to keep the virus down in order that those businesses in tier 2 are able to trade and come down into tier 1 as soon as possible.
Local lockdowns will undoubtedly affect small businesses that have already struggled due to the initial lockdown earlier this year. In my constituency, traders at Chrisp Street market and Watney market were impacted by the lack of Government support earlier in the year. Some of those traders operate from rented lock-ups, where their goods are stored, and business rates for those properties are paid by the leaseholder, which meant that market traders did not benefit from business rates relief and therefore suffered financial hardship. May I ask the Chief Secretary to the Treasury what further financial support can be provided for those local businesses that are not covered by business rates relief in the event of a local lockdown?
The hon. Lady is right to point to the fact that when the Government put in place the £10,000 and £25,000 grants of support linked to premises, market traders fell outside that scheme because it was based on property. The specific issue of market traders was raised with us, and in response we put in place a further support scheme giving discretionary grants to local authorities in order that they could tailor that additional funding to local circumstances. I think she could raise this issue with her local council and ask why it has not used the discretionary grants to support those traders to whom she refers.
I hugely welcome the expanded jobs support scheme, which is so important, but what it does not do is help those businesses that supply the events industry—for example, the sound engineers and lighting engineers and, in my constituency, Beat the Street, which provides tour buses to the music industry. It has not been forced to shut down, but it has seen its trade wiped out. I urge my right hon. Friend to think of ways in which he can help companies such as that, which employ in excess of 150 people and can see no end in sight to their current financial woes.
My right hon. Friend rightly highlights an industry and a sector that have been particularly hit. Again, we have tried, through the package of measures such as the extension of the self-employment income support scheme, to help some of those within that sector. I think the business to which she is referring is more a pay-as-you-earn one, but it is often freelancers who work in, say, the lighting sector and the events sector, and they have been particularly impacted. That is why the self-employment scheme was introduced. To some extent, and given the over £200 million of support, the Chancellor has been very candid, as have I, about the fact that we were not in a position as a Government to save every single job. We are working with colleagues—I am always happy to work with my right hon. Friend—to look at what measures we can take, but that has to be balanced against the wider fiscal position.
I thank my right hon. Friend and the Chancellor for all the support they have given to jobs and businesses over this period. However, as we move to the next stage of our battle, to echo other colleagues, will my right hon. Friend at least agree to keep an open mind about further support for hospitality businesses in tier 2, which are not required to close, but which are going to struggle with reduced capacity? I am sure none of us wants to see hollowed-out communities as pubs permanently call last orders.
I am grateful to my hon. Friend for his question; I think the Chancellor has demonstrated throughout the health pandemic that he has both kept an open mind and consulted widely, with the TUC, business leaders and many others. That is why for hospitality specifically we had a range of measures in the summer, with eat out to help out, the targeted VAT support and cash support measures, and the job support for staff coming back, where the Government helped with some of those labour costs. Of course the Chancellor will keep these things under review, but the key issue for all of us is to get the virus down, and that is the best way of helping our hospitality sector.
Yesterday, my constituency of Wallasey, as part of the Liverpool city region, was mandated by the Government to go into tier 3 restrictions. Does the Chief Secretary agree that the £40 million of unallocated support that his Government gave to the city region at the start of the pandemic could now be used, given that we are in tier 3, to support local businesses that are in the worst form of lockdown?
We did address this issue. I recognise that many hon. Members have raised it on behalf of councils where the initial estimate was at odds with the actual number of grants issued, but for the same reasons I gave earlier, I do not think that would be equitable. Where there are pressures with tier 3—and conversations took place, for example, between the Secretary of State for Housing, Communities and Local Government and leaders in Merseyside, among others, over the weekend— it is right that the needs are addressed pertaining to tier 3, not that the underspend on funding that was allocated in a previous period is then used in that way. If the Government were to agree that, many hon. Members across the House would feel that it was unfair.
I thank my right hon. Friend for the package of support that was put in place yesterday, but may I raise again with him companies in the supply chain for the hospitality industry and the events and exhibition industry? He mentioned a moment ago the discretionary criterion available, but unfortunately local councils are not often using that. I ask him to look at the eligibility criteria for grants and support, which were raised yesterday. Many in the events and hospitality industry want to reopen, so will he meet me so we can arrange how it can be done safely?
First of all , I am always happy to meet my hon. Friend and I welcome the constructive approach that he always takes on these issues. In terms of eligibility, part of the design of the discretionary grant was to give discretion to local authorities to apply it in different ways, and it would be slightly at odds with that for the Government to say that there must be a particular way of applying it. However, he speaks to a sector that I know has been particularly hard hit by covid; we recognise that, and it is a factor that has shaped a number of the approaches we have brought forward, particularly on things such as cash flow. I am very happy to speak with him.
May I be helpful to the Chief Secretary, as I have been sometimes in the past? I am the Member of Parliament for Huddersfield in West Yorkshire; we are in tier 2 and, like so many parts of the country, we will be facing vast problems of youth unemployment. May I be very helpful by asking him to look at Margaret Thatcher’s history? She introduced a windfall profit tax on the banks. Why cannot he introduce a windfall profit tax year on Amazon, the gambling sector—you name it; we know who has done well in this crisis—and then use that money to fund a wonderful green revolution, with new green businesses, new green training and new green jobs for young people?
I have always found the hon. Gentleman constructive, and I welcome the fact that he is looking at the fiscal position we face as a country and how we may address that. However, it would be remiss of me, given my responsibilities, to stray into the terrain of the next Budget and tax-raising measures; I will leave that for my right hon. Friend the Chancellor.
The hon. Gentleman is right to highlight the very serious issue of youth unemployment. I think it is an issue that concerns us all in this House. The sectors that are most hit have concentrations of young people, particularly in the hospitality sector. That is really at the heart of the winter plan that my right hon. Friend brought forward in doubling the number of work coaches, in tripling the number of traineeships and with the £2,000 for apprenticeships. We have been looking at and learning from not just the Thatcher era, but actually from the previous Labour Government with some of the packages we discussed with the TUC and others. One of the great challenges we face is how we address not just the number of people who are unemployed, but the length of time they are unemployed. That is an absolutely key issue, and that is why the Secretary of State for Work and Pensions is so focused on doubling the number of work coaches. The hon. Gentleman is quite right to highlight the issue.
Stoke-on-Trent is currently in medium-risk tier 1, but we all know that any area can see an increase in infection rates. With the introduction of the tier system, many workers in the highest tier will once again be unable to go to work and make a living for themselves and their families. Will my right hon. Friend please reassure me that those who are unable to attend their place of work will continue to be supported by this Government, particularly those from low-income households with rents to pay?
My right hon. Friend the Chancellor has sought to do that throughout this crisis. In the interests of brevity—as requested from the Chair—I would point to the example we had with the shielding programme. I think it was a very proud record, which indicates that intent.
It is a shame the Chancellor is not here today because the Treasury needs to get a better answer to the question from the right hon. Member for Central Devon (Mel Stride) and others: what is the evidence, not anecdotes, to back up the case for the curfew and lockdown for the vast hospitality sector, which is facing closures, cash-flow crises and job losses across pubs and clubs, restaurants and cafés, betting shops, bingo halls, casinos, theatres and cinemas, gyms and wedding venues? Treasury Ministers either have to secure a change in direction of Government lockdown policy or they have to up the level of support. Which is it going to be?
The fact that, in the course of this urgent question, we have been criticised both for not locking down enough and for locking down too much indicates that these are balanced decisions. The right hon. Member is right to point to the SAGE advice, which I know got a lot of media commentary this morning. In an earlier reply, I addressed the fact that there are concerns about outbreaks linked to bars and whether compliance is worse later at night, but that is part of the package of measures. That is why, in September, we brought in the additional measures we did. It is why, yesterday, the Prime Minister went further with a tiered approach, but it is a balanced approach.
In answer to an earlier question, the Chief Secretary talked about the interaction of the job support scheme and universal credit. Could he perhaps flesh out a specific example? I think I am right in saying that people getting support from both of those schemes can get up to about 90% of their income, which is obviously of huge benefit. I would reinforce the point of the former Secretary of State for Work and Pensions, my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb). I accept that the UC extra money was temporary during the pandemic, but the Government’s own strategy document suggests that the pandemic will not be over by next April. I do not expect an answer today—[Laughter]—but it is something for the Treasury to think about.
On the wider point, my right hon Friend, as a former Government Chief Whip, knows full well that in government one balances these Budget submissions alongside the wider fiscal position that the Government face. On his first point, he is absolutely right. If we combine the 67% of support through the job support scheme with the dynamic element of universal credit, that takes us much more towards 88%. I can give specific examples, but I have been asked to be briefer—by you, Mr Speaker—in my replies. The point is that my right hon. Friend is absolutely right on that, and I am very happy to share some examples with him.
Especially when the Member does not want an answer, Minister! [Laughter.]
Without additional financial support, the restrictions to which South Yorkshire will be subject will deal a hammer blow to businesses and high streets across our region. Can I ask the Chief Secretary what assessment the Treasury has done on the economic effect of the tier 2 measures, and whether he is personally satisfied that the current support available will be enough to save jobs and businesses here in South Yorkshire?
I know through his local responsibilities that the hon. Member is in conversation with my ministerial colleagues in the wider discussions on our response. The reality is, as I said earlier, that one cannot be satisfied that every job in the area will be protected. It is about having a balance of measures that enables those businesses to be open that can be and takes action on the virus to suppress the increase. The previous question from one of his own parliamentary colleagues suggested that we should not be going as far as we are. He is saying, as I understand it, that we should be going further, but with wider support. That points to the fact that even within our own parties we have these debates.
It is about striking that balance. We have brought forward what is by international standards a very supportive package that combines the additional billion pounds to local authorities and the extra £500 million to localise track and trace, which the hon. Member and other local leaders have called for. We have listened to those representations, and that has been reflected. I hope the hon. Gentleman welcomes that, and I look forward to working with him constructively in the days and weeks ahead.
Oadby and Wigston in my constituency was the first place in the country to receive extra support because of our local lockdown. I pay tribute to Treasury officials and Ministers for putting it in place so quickly, but what is being done through the kickstart scheme and other schemes to create new jobs and to fight unemployment?
My hon. Friend raises a good point, and it speaks to the point raised on youth unemployment a moment ago. We have invested £2 billion in the kickstart scheme. We are tripling traineeships. We have the £2,000 for firms taking on apprenticeships. That is something that the Secretary of State for Work and Pensions is particularly focused on, as well as the doubling of work coaches. Linked to that is our investment in green jobs through net zero and the package that was announced by the Chancellor, including the decarbonisation of public buildings and homes and the creation of green jobs. We are bringing forward the £5 billion infrastructure package that the Prime Minister announced the week before the summer economic update. We then need to link those jobs to skills through schemes such as the kickstart, so that for those who are not able to retain their jobs, we are able to get them into the new jobs of the future.
It is important that the Government understand the reality of people’s lives as new restrictions are introduced. Figures from the Low Pay Commission show that around 1,800 people in Wirral West are paid at or around the minimum wage. Many people on low pay work in bars and restaurants, and I am very concerned about the impact that the new restrictions will have on their ability to pay their bills. What action will the Government take to ensure that working people in Wirral West do not face poverty as a result of these new measures?
The hon. Lady is right to highlight that worry that many people have, particularly given the additional announcements. That is why we have taken the action we have, putting the extra £7 billion into welfare to enable universal credit to top-up where there is an impact on people’s wages. That combination of the job support scheme and universal credit speaks exactly to the concerns she raises.
The Government have rightly put in several billion pounds directly to support the rail industry, but that is in sharp contrast to the aviation sector, where very little direct specific support has been provided. In many parts of the country, our domestic air routes and our regional airports are just as much vital transport infrastructure as the railway is, so will my right hon. Friend please look again at what support can be given to the aviation sector, particularly our regional airports?
I know that my hon. Friend is a strong champion of the aviation sector, not least because he and I have discussed the issue. I know he has championed it within Government. It is not the case that the aviation sector has not had support. I pointed earlier to the £8.5 billion through the corporate financing facility. In terms of Government focus on the sector, he is absolutely right that it is an important sector for the UK to focus on. We have the largest aviation network in Europe, the third largest in the world. That is why my right hon. Friend the Secretary of State for Transport has launched a global travel taskforce, and is working with the travel industry as part of that.
Local lockdowns affect a far wider range of businesses than just those that are forced to close. Food and drink suppliers such as the Edinburgh Beer Factory in my constituency will be severely affected. Small and medium enterprises such as that are the backbone of the Scottish economy, so why has the Chancellor’s furlough replacement scheme so drastically slashed support for innovative and thriving businesses such as the Edinburgh Beer Factory?
It has not. It has provided a universal offer to all firms that are able to be open, for exactly the reason that is at the heart of the hon. and learned Lady’s question. She is quite right that the displacement impact goes far beyond areas in tier 3 or tier 2. Businesses supplying them are affected. We had a question earlier about support for the fishing industry. One of the key challenges with the fishing industry was exactly the point to which she refers—they were supplying other businesses that had been affected, and that is why we put £10 million of support into that sector.
We have taken a universal approach. It is at odds, though, with the questions we often get in the House, which are very much about whether we can support this sector or that sector. We have taken a universal approach because we recognise that one cannot necessarily draw a geographical line around the suppliers of businesses that are impacted.
On Sunday evening, Mayor Andy Street was told that Solihull would be in tier 1. The day afterwards we appeared in tier 2. Does the Minister recognise the crushing blow that that gives to the hospitality industry and that tier 2 is economically the worst of all possible worlds?
I think we all agree in this House that we want to do all we can to get the virus down and get businesses open. We do not want businesses to be in tier 2, or indeed tier 3. We want to support them so that they are able to function as much as possible.
The timing of moving between different tiers is shaped by a range of factors—the number of positive tests, the amount of testing that is being done, the views of the local director, of public health, and the views of local leaders such as Andy Street. We all want to ensure that as many businesses as possible remain in tier 1.
Data out today shows that over 1,700 more people in my constituency were unemployed in August 2020 than in August 2019, and that is before the existing furlough scheme ends. With unemployment in the north- east already rocketing to 6.6%, the highest rate in any UK region, why is the Chancellor allowing damage not seen since Thatcher in the 1980s to befall my region?
The hon. Lady is usually one of the most constructive Members. To suggest that a pandemic that all countries are grappling with is down to some sort of ideological approach by the Government is not accurate. The Government have put in place a furlough scheme for eight months that stands very good comparison with those of other countries. We have more than £200 billion of measures to support businesses, including businesses in her constituency, and that is not only to help retain people in jobs. From a peak of 8.9 million on furlough, more than half of those remained in employment through the job support scheme. We are ensuring that more businesses are able to bring their staff back. But at the same time we are being honest. Some businesses will not be able to survive. That is why we put £2 billion into the kickstart scheme. It is why we are tripling traineeships. It is why we put funding into apprenticeships, with a £2,000 sign-on. It is why we are bringing forward infra- structure investment. It is to create those jobs for her constituents.
VAT cuts and business rates holidays were superb for the hospitality operators, but unfortunately did not pass down to supply chains such as ceramic manufacturers. Flexibility needs to be introduced into the job support scheme to allow continuous manufacturers such as those in ceramics the ability to access the support of the scheme for their weekly workforce. What plans are being made to allow ceramic manufacturers such as Churchill China and Steelite the flexibility to access the support of this scheme?
There is always a balance between the operability of schemes, the speed at which one can deploy them and how bespoke one makes them. I know that my hon. Friend is a huge champion of the ceramics industry, and I know it is important to Stoke and to businesses in his constituency. If there are specific issues, I am happy to pick them up offline with him, but the key message we usually get from businesses is the importance of getting packages to people quickly, and in particular of addressing the cash-flow challenges that they face.
Last week, the Chancellor announced that workers in businesses and workplaces forced to close would be eligible for grants worth two thirds of their salary. That is clearly not enough. Will the Minister tell me whether bills, rents and mortgages will be charged at two thirds of the usual amount? If not, will the Government extend the evictions ban?
We have addressed this already in a number of questions. The point is that it is not simply two thirds; it is dynamic, aligned with universal credit, which then moves to top that up. The package of support, which is above that provided by many of our European comparators, is, if combined with universal credit, at 88% in many circumstances, not 67%.
Stevie the Sweet—not everyone’s pet name for the Chief Secretary, but Stevie who has the sweet stall on Mold market in my constituency—yelled at me as I walked past on Saturday. “Oi,” he said, “that Boris and Rishi and all the Treasury team are all right by me.” That is the story up and down my Delyn constituency, where my small business owners commend the work done by the Treasury and the support they have been given during this pandemic. Does my right hon. Friend agree that, when businesses in our tourism sector are being effectively locked down by draconian travel measures put in place by the Welsh Government, perhaps we need to step in and assist them a little more —for example, Greenacres and Tree Tops caravan parks in my constituency?
One of the strongest benefits to businesses in Wales, and indeed across the United Kingdom, is the broad shoulders and ability of the UK Treasury to act on behalf of the entire United Kingdom. That is a huge strength, and it has helped to enable schemes such as furlough and others to be of benefit to businesses in Wales. On the measures put in place by national Governments, the more that is done through the Joint Biosecurity Centre with consistency, the better. But obviously, that is a decision for the Welsh Government.
Tim Farron, follow that.
I will do my best, Mr Speaker.
Outdoor education centres are a crucial part of our visitor economy. There are 60-plus of them in Cumbria, employing hundreds of talented people whose jobs are, I am afraid, now seriously at risk. Outdoor education centres provide huge benefits in personal development, education, and physical and mental health, which are particularly valuable, even essential, at this time. They are as safe to reopen as schools, yet they face imminent closure and ruin. Will the Minister meet with me and the heads of outdoor education centres so we can take urgent action to save them?
The hon. Gentleman raises a valid point, and having lived in his constituency for a couple of years, I know how important outdoor education centres are to the economy. He is also quite right to point to their benefit to mental and physical health, often for young people, who have been particularly impacted in recent weeks. I suggest that I alert Ministers in the Department for Education to the specific concern he raises, so they can meet him and the Department’s guidance can take his point on board.
The Conservative Government have stood up to protect jobs, incomes and businesses with unprecedented measures, so will my right hon. Friend reassure me that his priority is to create, support and extend opportunity, especially for people in Stoke-on-Trent, where there is a need to grow the quality of job opportunities?
My hon. Friend is quite right: this is about not only working together to retain as many jobs as possible, but looking to the jobs of the future. He has constructive views on how we use levelling up in terms of the future jobs that can be offered in Stoke. We need to combine that with our commitments on infrastructure, broadband, research and development investment, and net zero, then look at those future jobs and the skills training that is offered to his constituents in Stoke, so that those who move from their current jobs can quickly get into those jobs of the future.
In order to allow the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I am suspending the House for three minutes.
Virtual participation in proceedings concluded (Order, 4 June).