The Chancellor of the Exchequer was asked—
Local Covid-19 Restrictions: Economic Support
Earlier this month, I announced that businesses forced to close as a result of local restrictions will be eligible for a grant of up to £3,000 a month. Their employees will be protected through the expanded job support programme and councils will receive extra resources to help with local track and trace, enforcement and compliance.
All that Greater Manchester is asking for is proper financial support for our businesses, our self-employed and our lowest paid after 12 weeks of failed lockdown measures and as we face many more uncertain months ahead. When the Prime Minister is reported as struggling to live on his £150,000 a year salary, how does he think the lowest paid in Greater Manchester will cope on two thirds of national minimum wage? Last night, the Secretary of State for Housing, Communities and Local Government offered just £22 million for a city region of 2.8 million people. That is less than the £25 million he granted to his own town centre. Why do this Government hate Greater Manchester?
It is disappointing to hear the hon. Gentleman’s tone. It is obviously a very difficult time for many people in this country as we evolve our response to this virus, but what we need is people acting in a constructive spirit, and that is what my right hon. Friend the Communities Secretary is actively offering to do. I hope those conversations are happening as we speak.
Greater Manchester is being treated exactly the same as every part of our United Kingdom. These are national support schemes that have been put in place that help the most vulnerable in our society. The hon. Gentleman raised a number of questions. As he will know, there are national schemes to protect businesses, to protect employees and to provide support to his local authority.
Repeated local lockdowns with no end in sight are killing our economy in South Shields. In the past lockdown, we received £26 million of support. I have been advised that the financial package offered to us this time, should we end up in tier 3, would be just over £1 million. Can the Chancellor confirm or deny that insulting amount?
I am glad the hon. Lady recognises the economic damage that lockdowns do, which is why, when we had this debate last week, I did pose the question as to why the Opposition were suggesting a national lockdown with no end in sight without commenting on the damage that would do to people’s jobs and livelihoods. With respect to support for local authorities entering tier 3, as I have set out there is a national funding formula that provides a per capita amount to the local authority of up to £8 per head at the highest tier to provide support for local enforcement, compliance and track and trace. On top of that, there is support that the national Government provide for businesses that are closed. Their employees can be put on the job support scheme, and, in addition, my right hon. Friend the Communities Secretary can talk to local authorities about providing bespoke extra support as required.
People and businesses in my constituency and across Greater Manchester are suffering. They are facing an uncertain winter with insufficient support. Last night, the Government offered just £22 million to the 2.8 million people in Greater Manchester. That comes to just £8 a head to support local people and businesses during the months ahead. Other areas were given double that amount, despite having just half the population. Does the Minister seriously believe this is a fair deal for Greater Manchester, and, if so, would he like to take this opportunity to apologise to those Mancunians who will lose or have already lost their livelihoods?
With the greatest respect, the hon. Gentleman is mistaken in his characterisation of the support provided and confusing two different things. He is absolutely right: the support is £8 a head. That is the national funding formula that is provided to all local authorities entering tier 3. That is the same as is provided in Lancashire and indeed, in the Liverpool city region, and that is the amount that he refers to, which is done on an equitable basis for all local authorities. The additional amounts he talks about were reached in negotiation with my right hon. Friend the Communities Secretary and representatives of the Government. That offer remains available to Greater Manchester, and that is why I hope they engage in these negotiations constructively.
My right hon. Friend has done a great deal to support jobs in our country, but he will know that lockdowns destroy jobs and lead to increased mental illness and a smaller economy that for many years will be less able to look after our most vulnerable. Does he agree that the Government should come forward urgently with a comprehensive review of the impact of lockdowns, not just in terms of epidemiology and the effect on the NHS, important though that is, but in terms of the economy, businesses, jobs and the country’s social wellbeing?
As ever, my right hon. Friend makes an excellent point. He is right about the damage to not only non-covid health outcomes but people’s jobs and livelihoods and the long-term damage that that will cause to all our health outcomes. With regard to projections, he will know that both the Office for Budget Responsibility and the International Monetary Fund project 3% scarring, which will mean our economy potentially being £70 billion to £80 billion smaller in the future than it otherwise would have been. As he rightly says, that will obviously have an impact on our ability to fund public services and protect people’s jobs and livelihoods.
That appears to be slightly different from the message we received from the Chancellor last week. This morning, a member of the Monetary Policy Committee stated that
“the bulk of spending reductions are due to restrictions that people voluntarily impose on themselves”,
“higher virus prevalence is associated with weaker economic performance.”
Research suggests that not undertaking a circuit breaker now could cost our economy an additional £110 billion—that is based on IMF figures, by the way—due to changes in behaviour that people make to avoid contracting the virus and the knock-on impact of those on economic output. What is the Chancellor’s estimate of the cost of not undertaking a circuit breaker and continuing with this rolling programme of regional restrictions?
The hon. Lady talks about rolling programmes. It is clear that the Labour party believes that we should have a rolling programme of national lockdowns. That would be enormously damaging for people’s jobs and livelihoods, causing unnecessary pain and suffering in parts of the country where virus prevalence is low. A localised approach is the best approach.
We are not in a significantly different public health position now from when the Chancellor announced furlough on 20 March. Pubs and restaurants and hospitality venues are being asked to close, but this time, he is leaving people with significantly less support. Will he take action today to extend the furlough scheme, to ensure that people are protected and that those who have lost out and been excluded from support can be included this time?
We have announced the job support scheme, which will take effect on 1 November, following the closure of the coronavirus job retention scheme. Those who are working in closed businesses can be placed on that scheme and receive 67% of their wages—an amount comparable with all our European peers—at very little, if no, expense to the employer, helping them to protect those jobs.
Sixty-seven per cent. of wages for people who are on minimum wage jobs—the lowest paid in our society—is simply not good enough and gives them absolutely no incentive to self-isolate and stick to the rules. The Scottish Government have announced a grant of £500 for the lowest paid, but the UK Government may swipe that back and pick the pockets of the poorest in taxation. Will the Chancellor go further than he has so far and exempt that £500 grant to the poorest in our society from taxation?
The hon. Lady talks about the Scottish Government introducing a £500 grant. It was the UK Government who introduced a £500 grant and provided Barnett funding for the Scottish Government to do the same. She is right that the grant payment is there to help those who are most vulnerable, so that they can isolate, and it provides an incentive for them to do so.
Support for Businesses: Covid-19
The Government recognise that the pandemic has caused extreme disruption to the economy. That is why we have delivered one of the most comprehensive and generous support packages anywhere in the world, worth over £190 billion.
I recognise the enormous amount of support that has been given to businesses in Crewe and Nantwich. I have spoken to many that would not have survived without it, and I know the pressure on public finances. But hospitality businesses such as the one I visited, Giovanni’s in Crewe, will really struggle with the 10 pm curfew and the ban on household mixing. Can the Government look again at what we can do for businesses that might technically be allowed to open but will struggle under those circumstances?
Over the last few days, businesses across Burnley and Padiham, from bookkeepers to bars and pubs, have had to close as the county of Lancashire has entered tier 3 restrictions. While it is welcome that those businesses are getting Government support through the extension of furlough and business grants, there are many more in the supply chain that will be equally impacted because their end suppliers are not there. Could my right hon. Friend set out what measures are available to support them over the next couple of months?
As a Lancastrian myself, I am acutely aware of the impact on the county of Lancashire, which is why my right hon. Friend the Secretary of State for Housing, Communities and Local Government negotiated the additional business support. That builds on the measures set out by the Chancellor to support businesses not just through the job support scheme, but through the furlough bonus.
It is not just businesses in tiers 2 and 3 that have been impacted; in tier 1, some sectors are still unable to trade, suffering from a total loss of business. Does my right hon. Friend agree with the head of the IMF that
“now is not yet the time to balance the books”,
and will he consider extending support to businesses that still cannot work in these times?
My right hon. Friend is right about the pressure on businesses in tier 1 as well. That is why, in the package the Chancellor has set out, has been the extension of loan facilities to help those businesses with their cash flow. In the south-east region, which my right hon. Friend represents, the total is some £0.5 billion of support.
Many thousands of small businesses have already benefited from the measures that my right hon. Friend and his colleagues have put in place. As we move forward, may I urge him to keep a small business focus, particularly for small brewers? Duty levels are a crucial part of their business viability, and may I urge him to keep small breweries’ relief in place, as it is helping to safeguard the future of many small breweries not just in Hampshire but throughout the United Kingdom?
My right hon. Friend makes an extremely valid point about the impact on that sector. That is why the Treasury is reviewing small breweries’ relief and, indeed, the Exchequer Secretary has taken forward reforms, at the industry’s request, to fix issues in the current relief design.
Equitable Life: Compensation
In 2010, the Government set up a payment scheme to make payments of up to £1.5 billion to eligible policyholders. Since the scheme closed in 2016, the Government’s position on this issue has been clear: there is no further funding in addition to that £1.5 billion and this issue is considered closed.
Many self-employed people and small business owners feel let down by the covid response, and the same type of people were let down 10 years ago today when victims of the Equitable Life scandal were told they would only get 22% of the money they had lost. The Treasury has ignored hard-working people like my constituents for a decade, so please will the Chancellor reconsider and commit to providing Equitable Life victims with the compensation they deserve?
The Government continue to pay out to annuitants who were in payment from 2010. Indeed, we have a £100 million contingency to ensure that they are properly provided for. The Government were completely transparent about the calculation methodology and worked with the action group, the Equitable Members Action Group, to give explanations to policyholders. We met actuaries to ensure that it was as fair as it possibly could be, so the Government’s position on this remains as I have stated.
Women’s and Girls’ Health
The Government are providing an extra £33.9 billion to the NHS to deliver its long-term plan, which has actions to tackle inequalities affecting women and girls. This includes commitments to 50% reductions in stillbirth, maternal mortality and neonatal mortality by 2025, increasing access to perinatal mental health services and expanding human papillomavirus vaccination to protect against cervical cancer, among many other examples.
My hon. Friend is rightly championing the importance of education and has done a lot of work to raise these issues. Where a young woman has been identified as taken out of school, the local authority has a responsibility to locate and contact that young woman and work with her to find a suitable place in post-16 education. The Government also provide targeted support to help young people overcome financial barriers to participation through the 16-to-19 bursary fund.
Apprenticeships are a job with training, and they benefit people of all ages and backgrounds, especially young people starting their career. The plan for jobs will help to kickstart the nation’s economic recovery. As part of the plan, we have introduced a payment of £2,000 for employers in England who hire new apprentices aged under 25 and £1,500 for employers who hire new apprentices aged over 25 before 31 January 2021.
Newcastle College in my constituency is a fantastic further education provider, which has invested significantly in its facilities and staff for its trainees and the 850 different local employers it supports. It has been judged outstanding by Ofsted in all areas, including apprenticeship provision. However, it is concerned about the dramatic reduction in training vacancies, and its actual apprenticeship starts are down by two thirds year on year, so will the Minister join me in praising the work it has done so far and set out what incentives employers have not only to take on but also to keep on apprentices to the end of their training?
I congratulate Newcastle College and all it is doing to support learners to develop the skills they need to thrive. We know that apprenticeships are proven: 91% of apprentices in 2016-17 remained in employment or went on to further training afterwards. In recognition of the importance of apprenticeships and the disruption caused by covid-19, the Government have introduced payments to incentivise hiring new apprentices and flexibilities to support existing ones through their programmes.
Let us look at the record. Capital investment in further education is running at less than half the level put in by Labour 10 years ago. Apprenticeship starts are down 43,000 this year, with the biggest drop among under-19s, and yesterday we learned about the short-sighted, vindictive move to scrap the union learning fund. Why is it that, when the need is for help now with new skills and retraining, this Government have done so much to kick the ladder of opportunity away from working people?
I think that it is probably a good time to remind the right hon. Gentleman that in the Budget we actually increased significantly the amount of money spent on further education. On the union learning grants, I refer him to the Department for Education Ministers who made this decision; I am sure they can write to him again on this. But the Government remain committed to investing in adult skills and retraining: in addition to the plan for jobs, at the comprehensive spending review we will be allocating our new £2.5 billion national skills fund to help more young people learn new skills and prepare for jobs for the future.
VAT: Tourism and Hospitality
The temporary reduced rate for the tourism and hospitality sectors came into effect on 15 July 2020 and is helping to support the cash flow and viability of over 150,000 businesses and to protect 2.4 million jobs across the UK. On 24 September, the Government announced that they will extend the temporary reduced rate so that it now ends on 31 March 2021.
We all want to see a sensible solution to the debate over the covid restrictions in Greater Manchester, but a move from tier 2 will mean the hospitality sector in Cheadle faces the additional blow of tier 3 restrictions, and while reduced VAT in recent months is welcome, businesses in tier 3 will be unable to benefit from the extended scheme. Therefore, in addition to the comprehensive support package, will the Minister consider extending the reduced VAT scheme further in areas that go into tier 3, so that they can do business on that basis for as long as businesses in other parts of the country?
As my hon. Friend will know, it has already been extended and she will also be aware that we have put in place a scheme for people who have VAT debt, to allow a payment process that fits their schedule. As the Chancellor has said, to support local authorities at very high alert and to protect public health and local economies, an additional £5 a head, £8 in total, has been made available. That means we have committed up to £465 million in funding for English local authorities through the tiering scheme, and we will announce further details of the eligible expenditures under this scheme.
Universal Credit: Covid-19
The £20 per week increase in the universal credit standard allowance and working tax credit basic element forms just one part of the package of support the Government have provided to protect people’s jobs and incomes, including income support schemes.
The Government were right to increase universal credit and working tax credit by £20 a week. Surely, it would now be inconceivable to remove those increases in April as planned, before the pandemic is even over. Does the Minister accept that of the indirect levers available to the Government to stimulate what is, as we have heard already, going to be a weak economy for some time, measures that raise the incomes of low-income households are the most effective, and benefit increases are a good example?
I am grateful that the right hon. Gentleman recognises the additional £9 billion of support that my right hon. Friend the Chancellor has put into welfare. That is reflected, as the right hon. Gentleman will further recognise, in the distributional analysis showing that that has protected those on the lowest incomes. That support is temporary, but it does extend to the spring, and it helps those families facing covid with the challenges over the coming months.
Fiscal Support: Covid-19
The Government have provided an unprecedented package of support for people, businesses and public services throughout the UK, totalling more than £200 billion. That has included helping to pay the wages of 9.6 million people through the job retention scheme and protecting the livelihoods of 2.6 million self-employed workers through the self-employment income support scheme.
The Scottish Government are doing what they can to support individuals, businesses and those who have been excluded by the Chancellor from receiving any grants, loans or payment holidays. They are hampered in doing so by not having the autonomy of borrowing powers to meet the unique requirements of the Scottish economy. Will the Government heed repeated calls for the devolution of borrowing powers to enable the Scottish Government to provide additional targeted assistance to those individuals and sectors that they have identified as most in need?
As the hon. Gentleman will know, the current state of affairs was agreed between the Scottish Government and the UK Government after exhaustive consultation and discussion by the Silk commission, and that remains the set-up to which the Scottish Government have committed themselves.[Official Report, 23 October 2020, Vol. 682, c. 4MC.]
With the dual viruses of Brexit and covid-19, we are heading for a winter of discontent and a longer period of mass unemployment. With no Budget announcement, what are the Chancellor’s economic advisers telling him about the Government’s preparations for mass unemployment and the sectors that will be worst hit?
The Chancellor has been very clear that because we are in the midst of a pandemic, we are likely to see, and we are indeed already seeing, some redundancies. There is no doubt about the seriousness of the financial and economic situation that we are in. I remind the hon. Gentleman with regard to Scotland that there has been some £7 billion of support for the Scottish Government in dealing with the pandemic and its economic effects, over and above the £21.3 billion provided through the regular Barnett process.
Thank you, Mr Speaker. In regions facing tier 3 restrictions, many businesses have been forced to close. In tier 2 regions, many businesses, especially in hospitality, are open in name only, running up all the costs without the customers. What do the Government have to say to those businesses that realistically cannot operate but are not legally required to close?
I welcome the hon. Lady to her place. I mourn the loss to his new job of her predecessor, the hon. Member for Ilford North (Wes Streeting), with whom I happily fenced over many sessions on the Finance Bill.
The answer to the hon. Lady’s question is, of course, that we are acutely aware of the financial costs on those businesses, as we are of those on businesses that have been forced to close, and that is why we have put in place an evolving and comprehensive programme of support for business.
Business Support Grant: Local Authorities
I hold regular discussions with my right hon. Friend the Secretary of State for Housing, Communities and Local Government. The original national business grant schemes provided support to small businesses that faced fixed property-related costs during the strict lockdown period.
I thank the Minister for his reply, but is he aware that in Enfield only 189 small businesses received a discretionary grant, even though 330 applied for one? In view of further restrictions in London, will the Minister commit to urgently releasing extra funding to Enfield Council to ensure that those businesses that previously missed out can reapply for financial support?
The previous grant was for businesses that had been forced to close. My right hon. Friend the Chancellor has allocated additional funding through the local restrictions support grant scheme for businesses that are forced to close, with an additional £1,500 per two-week closure period. As the hon. Lady said, the previous grant was discretionary and local authorities therefore had discretion as to how many firms benefited from it.
Self-employed People: Covid-19
The Government have taken unprecedented steps to support the self-employed, as the House will be aware. So far, the Government have paid out £13.4 billion of support through the self-employment income support scheme.
I recently had a Zoom call with Deborah Annetts, the CEO of the Incorporated Society of Musicians, and Jordan and Steve from a local Northampton band called The Keepers, and they highlighted the problems that self-employed musicians currently face. Will my right hon. Friend support struggling musicians such as The Keepers by considering either a freelance support scheme or a box office top-up to help to make socially distanced gigs feasible?
I thank my hon. Friend for his question. With a name like Jesse Norman—my hon. Friend will know that there was an American opera singer, now alas dead, of the same name—and as someone who has been involved in arts organisations and, indeed, as a pretty incompetent musician myself, I am extremely aware of the concern that he raises, and rightly so. He will know that the Government have announced a £1.57 billion culture recovery fund, of which some £330 million has been awarded to date to nearly 2,000 cultural organisations. That funding is designed to help performances to restart, to protect jobs and to create opportunities for freelancers across the country. It is also worth mentioning that we have done a considerable amount of work on the film and TV production restart scheme, much of which will have the same effect when it is properly up and running.
I have been contacted every day by sole traders and small independents who have fallen through the Government’s schemes. They are excluded and do not qualify for Government support. According to ExcludedUK, 1.6 million people are excluded from any of the Government’s self-support schemes. Last week, in answer to my hon. Friend the Member for Pontypridd (Alex Davies-Jones), the Chief Secretary said that these people had now been covered. They have not been covered. They are excluded and they are desperate for help. Will the Minister set out what support he will provide to the people who are excluded in this country from self-support grants?
I am sure that whatever the Chief Secretary said last week was absolutely correct. The hon. Gentleman will be aware that the scheme we have is designed to be as comprehensive as we can make it, consistent with the wider package we are offering and with support rapidly for the largest number of the most vulnerable people. That was the purpose of the scheme. We have continued the theme of supporting the self-employed through the job support scheme, and of course, that itself forms part of a much wider pattern of support for the industry and for businesses.
I very much welcome everything the Chancellor has done to protect jobs, businesses and livelihoods in my constituency and across Scotland. Many of the self-employed constituents in my area will be very grateful for the third grant that is now available to them. Can the Minister set out the number of people who will be eligible for the grant in Scotland?
We are unable to predict the exact take-up of the SEISS grant extension across the United Kingdom, but the latest statistics on the second grant demonstrate that self-employed people in Scotland are continuing to receive unprecedented levels of support under the scheme. As of 20 September, 64% of assessed individuals were found to be eligible in Scotland, with 126,000 claims being made, amounting to £318 million of Government support.
My constituent Rebecca launched a new business, Purdy’s Pet Shop, in Coventry North West just before the lockdown. Rebecca was told that she was ineligible for the self-employment income support scheme and faced a frustrating few weeks until she was eventually granted a coronavirus business interruption loan. That is just one business among many that fell through the gaping holes of the first self-employment income support scheme. Now it, and many other businesses in my constituency, will also fall through the gaps in the new extension.
Constituents have contacted me about how anxious they feel about how they will survive now that support has dropped to just 70%. Can the Minister tell me how adequate he believes the extension of the self-employment income support scheme is? What will he do to support my constituents who are falling through the gaps of the current scheme and are worried about the reduced financial support it offers?
I salute the hon. Lady’s constituent for setting up a new business and for showing the entrepreneurship and aspiration that characterise British business at its best. As she will be aware, we are engaged in the process of supporting vulnerable businesses and people. In the self-employment area, we are doing that through the extension to the job support scheme. She will know that that forms just one element of a much wider picture, including the loans that she has described, tax deferrals, rental support and increased levels of universal credit.
I associate myself with the concerns raised by colleagues cross-party on this issue. It is interesting that every time the Minister comes to the Dispatch Box, he bats off extra support for those people, yet some of them may have qualified for bounce back loans. I am interested to know whether the Treasury knows how many qualified for bounce back loans, because a recent National Audit Office report suggests that the Treasury does not know where the money has gone and what it is being used for, so perhaps he can elucidate.
I admire the hon. Lady’s ingenuity in introducing a conversation about bounce back loans to a discussion about the self-employed scheme. The answer is that I do not have the numbers to hand, but of course, if those numbers are available, I will make sure that we write to her with the detail.
Job Support Scheme
Over the course of the coronavirus job retention scheme, more than 9 million jobs were protected through the furlough scheme. The job support scheme that replaces it will come into force on 1 November. Of course, it is impossible to predict today how many people will benefit. That will depend on the exact path of the virus and the restrictions in place.
Since March, unemployment has doubled in Coventry South. The Government are replacing furlough with the utterly inadequate job support scheme. Research from the Institute for Public Policy Research found that, of the 2 million jobs at risk, it will save only 10%. Where it is used by businesses that are required to close, two thirds of wages is simply not enough for low-paid workers. Is the Chancellor happy to see 1.8 million jobs go? Could he live on two thirds of the minimum wage? If not, he should extend the furlough scheme for the industries that desperately need it.
When we announced the job support scheme, it was, in fact, warmly welcomed by several business groups and trade unions, with which I was happy to work in designing the scheme. I take the issue of jobs very seriously; it remains my highest priority. Although I cannot protect every single job, we will throw absolutely everything we can at protecting, saving and creating as many jobs as possible, which is why we have a comprehensive plan for jobs. The job support scheme is just one element of that. Indeed, I am pleased to say that the kickstart scheme is shortly due to launch, which will provide hope and opportunity to hundreds of thousands of young people.
A report published this week by the political consultancy WPI Strategy, commissioned by Tesco, ranked Bradford West at No. 3 in its need to be levelled up. Last week, another report found that my constituency has the highest rise in the rate of child poverty in Yorkshire and Humber. The Chancellor will be well aware that it also ranks seventh highest in the country for unemployment. With all that going on, and having been under local restrictions for almost three months, I ask the Chancellor whether he feels that Bradford West can afford any more job losses and whether he believes that it is in need of targeted support from the Treasury.
In Bradford and elsewhere, we would not like to see any job losses, but the reality is that what is happening to our economy means that, sadly, many people—almost three quarters of a million—have already lost their job and many more will. That is why our comprehensive plan for jobs aims to protect, support and create jobs in every part of our United Kingdom. That will provide hope and opportunity to people, whether it is the kickstart scheme, as I mentioned, or the opportunity for new training and skills delivered through the Prime Minister’s announcement of a lifetime skills guarantee.
People on Low Incomes: Covid-19
The Government have provided significant support to those on low incomes. We have introduced additional support through the welfare system, estimated by the OBR to be worth more than £9 billion this year, including increasing universal credit and working tax credit by £20 per week, as well as £500 million of local authority hardship funding and £500 payments for those in low income households who have to self-isolate.
Over the weekend, I visited numerous businesses in Horbury, such as the Green Berry and the Black Olive delicatessen. Mr Speaker, they form a fantastic independent retail offering, and perhaps on your next visit to Wakefield to witness Trinity prevail over your club, a little retail therapy could be a soothing balm before your long journey home across the Pennines. But failing your patronage, Mr Speaker, business owners there have told me that the imposition of tier 2 measures has sapped consumer confidence, which is the oil with which the economy is greased. Will my hon. Friend the Minister confirm that he will use all his creativity to focus HMT strategy on stimulating confidence in the consumer economy to support these businesses, and to consider tax reform, should it be conducive to those aims?
My hon. Friend is right to draw attention to the support that we have put in place, but also to the challenges that remain. In his own constituency, 14,500 have benefited from the furlough scheme, £28.4 million of business grants have been made available, and £20.3 million of business rates relief has been provided. Looking to the future, I can assure him that all Treasury Ministers will be using rigorous analysis and thinking as we work with the Chancellor as we approach the next Budget.
Fiscal Support: Job Retention and Incomes
The pandemic has unfolded at different paces in countries around the world, and countries have acted in a way that works best for their respective economies. In this country, the Government have put in place more than £200 billion-worth of support to protect people’s jobs, businesses and incomes, and that is one of the most comprehensive economic responses of its kind anywhere in the world. Our goal remains to continue to protect those livelihoods, those jobs and those businesses while we allow the economy to adapt to the changing circumstances.
Britain’s fiscal support outshines that of our European neighbours, but constituencies such as mine have never really emerged from the economic lockdown. Employment and many businesses are being stretched, and the Mayor of Greater Manchester needs to learn from Bolton Wanderers and start playing ball. Will the Treasury constantly review the financial help on offer for those faced with tier 3 restrictions and, indeed, consider some of the ideas that were forthcoming from my hon. Friend the Member for Cheadle (Mary Robinson) in relation to VAT reduction for the hospitality industry?
I am delighted that my hon. Friend draws Bolton Wanderers into a discussion on the Floor of the House of Commons—it is a very fine club. He will know that we have committed almost £500 million of support to English local authorities through the tiering system, and that that comes on top of the £300 million already allocated to local authorities for test, trace and contain activity. He should also be aware that there are grants of up to £3,000 per month, depending on rateable value, through the local restrictions support grant, as well as the expansion that the Chancellor has recently announced to the job support scheme. All of that forms part of our comprehensive package.
At the beginning of the pandemic, the OECD forecast that unemployment in the UK would rise to 9.1% by the end of this year. It recently revised its forecast down to 5.3%. Can the Minister confirm that the winter jobs plan will continue to provide the right kind of support to help our flexible labour market to adapt to the pandemic?
My hon. Friend is absolutely right to highlight the point about the OECD’s forecasts, and also the astonishing flexibility and effectiveness of our labour markets. She will know that the Government continue to adapt their response and, as the Chancellor mentioned a few minutes ago, we will shortly be launching the £2 billion kickstarter scheme alongside the job support scheme. That will be a tremendous boost for the prospects of young people across the country.
Economic Growth and Productivity: UK Nations and Regions
The Government are committed to levelling up opportunity so that all people and places across the UK benefit from economic growth, and covid-19’s impact has made that more important. From the £2 billion new kickstart scheme to create new jobs for 16 to 24-year-olds to the £1 billion for local projects to boost local recovery, we see that the Department will protect jobs, support economic growth and boost productivity across all nations and regions of the UK.
I thank my hon. Friend for that answer. One of the best tools to level up economic opportunity across the UK after we leave the European Union will be free ports. Does she recognise the strong case for designating Teesport, and will she praise the work of PD Ports and my friend the Tees Valley Mayor, Ben Houchen, in preparing a very strong bid?
I absolutely agree with my hon. Friend that free ports will benefit communities across the UK by unleashing the economic potential of our ports, as he will very well know, having been one of my predecessors in this role. I thank him, the Mayor of Tees Valley and my hon. Friend the Member for Redcar (Jacob Young) for their support on this agenda. Our consultation response, published on 7 October, confirms our intent to deliver free ports by 2021, and the free port locations will be selected according to an open, transparent bidding process.
This Government have put in place a £200 billion programme of support to help jobs and businesses throughout this crisis. Although we will not be able to save every job or business, we remain committed to doing what we can to protect the economy and people’s livelihoods at this difficult time.
This Government have taken extraordinary steps to protect the economy and now we must take the extraordinary steps to unlock it. Uncertainty stemming from coronavirus and the volatility of the oil price is leading to delayed investment in the Tees Valley. One thing that could break the deadlock in that investment would be the announcement of a free port in Teesside. Will my right hon. Friend assure the House that he will not delay the roll-out of 10 new free ports? Does he agree that a free port in Teesside could lead to thousands of new jobs for my constituents in Redcar and Cleveland?
My hon. Friend—like my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) and the Mayor of the Tees Valley, Ben Houchen—is a fantastic champion for the free ports agenda. They are all absolutely right: this policy can unlock investment and growth, and therefore create jobs in parts of our country that want to see that growth. I can assure my hon. Friend that I look forward to receiving the bid that, no doubt, he and his colleagues are putting together for us.
I am sure the Chancellor will agree that confidence will not return to our economy until we are able to control the virus with an effective test, trace and isolate system, yet the current system is not working and was described by the Scientific Advisory Group for Emergencies as having a “marginal impact” on transmission. Will he explain why, although he has funded the system generously, it is failing so badly?
I am glad that the hon. Lady recognises that we have provided substantial funding for the test and trace system. Although there have been times when we would all have wished that the response would be faster—that is indeed what is happening now—it is worth bearing in mind how far we have come since the beginning of this crisis, when 10,000 or so tests a day were being done. We are now marching towards our target of half a million daily tests. That is enormous progress and it will make a difference in our ability to suppress the spread of this virus.
In March, the Chancellor was clear that if people could not earn a living by going out to work, it was the Government’s job to step in, “whatever it takes”. By July, he was moving away from that belief and today he has moved so far that his employment support schemes have more holes than a Swiss cheese. Will he tell the House: was he wrong in March or is he wrong now?
My hon. Friend makes an excellent point. We should have an eye on our recovery and he is absolutely right that entrepreneurship can play an important part in driving that recovery, which is why during the crisis we announced the future fund to help to provide financing for start-up entrepreneurial companies. I am also happy to have a look at the enterprise allowance scheme. My hon. Friend will be aware of the start-up loan scheme, which does something similar by providing Government-discounted and funded loans to the budding entrepreneurs of tomorrow.
The hon. Gentleman will know that, as a result of Liverpool entering tier 3 restrictions, those conversations have happened with representatives from the Government and the Secretary of State for Housing, Communities and Local Government to ensure that Liverpool gets the resources it needs to provide extra compliance enforcement and, indeed, extra funding to provide support for businesses and people during what is, I appreciate, a very difficult time for his constituents.
I pay tribute to my hon. Friend for her work on that important initiative. She is a champion of levelling up in Cornwall and the Government are committed to working with her, which is why among the package of measures of support is included the Cornwall social housing retrofit acceleration and the Cornwall institute for space artificial intelligence. That is part of a suite of measures that will work with the welcome initiative that my hon. Friend has championed.
We recognise the concern for the valuable arts sector that the hon. Lady describes, which is why we have put £1.57 billion towards it. As I have said, £330 million of that has been released, and a further release will be made in the next few weeks. That is because we believe in that sector and support those people. Of course, other schemes are already in place—I have highlighted the support for independent production and films, for example—from which those affected can derive benefit.
My hon. Friend is absolutely right that there are businesses that are experiencing a difficult time, especially in the sectors he mentioned. Our comprehensive set of interventions, whether loans, grants or business-rates holidays, will all provide help in different ways, but the most important thing that we can all focus on is supressing the spread of the virus and unlocking those parts of our economy that are unable to function. That is the surest and only way, in the long run, to protect the jobs that we all care about.
I thank my hon. Friend for raising this matter. As someone with an airport in my own constituency, I fully understand the issues. I have had various meetings with many stakeholders and am happy to offer Southampton airport a meeting with Treasury officials to discuss the changes. At the same time as removing tax-free sales from 1 January 2020, the Government are extending duty-free sales to EU-bound passengers for the first time in more than 20 years. That will be a significant boost to regional airports, such as the one in Southampton, which serve significantly more EU than non-EU destinations and have not previously been able to offer duty-free sales to EU-bound passengers.
I thank the hon. Lady very much for the concern that she describes. I understand the problem. As she will know, the situation with people on lower income levels who may also be on universal credit is that it is a flexible benefit, which allows the top-up to income received. That is also true with the support received through the support scheme for self-employed people.
I know that my hon. Friend has championed this issue and I look forward to further discussions with him on it. He will also know that the Government and the mineworkers’ pension scheme have agreed to guarantee the core pension rates in the case of a deficit in the scheme, and have further agreed to protect bonus pensions that have accrued to date. Therefore, clear progress has been made, but I am happy to have further discussions with him.
The hon. Lady will know that this Government remain absolutely committed to our ambitious plans to double research and development funding over the course of the next few years. We have made enormous progress on that this year, with a huge and, I think, unprecedented increase in R&D funding that goes not only to basic science research, which she talked about, but ensures that we can develop that research into actionable ideas that benefit people and create jobs. She can rest assured that that remains an important aim of this Government, to ensure that this is the best place in the world in which to research.
The Government appreciate the work that the Energy Research Accelerator has been undertaking across the midlands on energy innovation. We have set out our ambition to invest up to £22 billion in R&D by 2024-25. The Chancellor also announced in the spring Budget that the Business, Energy and Industrial Strategy innovation programme will at least double to £1 billion-plus. R&D investment will continue to have a strong regional impact and benefit areas across the UK, including the midlands.
It is in order to address such pressures that we have set out such a comprehensive package of support that applies universally, including to the businesses to which my right hon. Friend refers. Through his question, he points to another substantive point, which is that suppliers supply to different sectors. One of the challenges with the Opposition’s proposals to extend the furlough was that they were never clear which sector they wanted to extend it to. The fact that suppliers supply multiple sectors, including the public sector, is a good illustration of why that proposal is flawed.
The Chancellor will be aware that wholesalers play a fundamental role in the food and drink supply chain, and, among other things, provide vital resources to our schools, hospitals and care homes; yet many are still struggling and do not have enough Government support. Bidfood, which is based in my Slough constituency, has seen an almost 50% downturn in its sales volumes, and has been forced to make 7% of its workforce redundant. Why has this company been ignored? Given the increased lockdown measures that are proposed, what measures will the Chancellor put in place to support struggling wholesalers—
Thank you, Mr Speaker. Obviously, the hon. Gentleman raises a similar point to my right hon. Friend the Member for New Forest East (Dr Lewis)—in a co-ordinated attack. Such businesses have not been ignored. I appreciate that they are treated slightly differently from the hospitality businesses which they serve, but, for the reasons that the Chief Secretary to the Treasury set out, it is tricky when there are businesses involved in the supply chain. The hon. Gentleman talked specifically about the business in his constituency facing reduced demand. The job support scheme is specifically there for businesses that are open but facing a reduced demand. That will allow them, rather than making redundancies, to receive a wage subsidy from the Government to help top up those employees’ wages. I hope that the company will look at that.
Virtual participation in proceedings concluded (Order, 4 June).