Skip to main content

Covid-19 Lockdown: Economic Support

Volume 807: debated on Wednesday 4 November 2020

Commons Urgent Question

The following Answer to an Urgent Question was given in the House of Commons on Tuesday 3 November.

“Yesterday, the Prime Minister set out why we are introducing new measures to tackle coronavirus. This decision is not one we would wish to take, but it responds to the soaring infection rate.

Just as we have a responsibility to protect lives, we must also safeguard livelihoods. That is why the Government have provided unprecedented levels of financial support throughout this crisis, in a package described by the International Monetary Fund as

‘one of the best examples of co-ordinated action globally’.

This package includes an extension to the Coronavirus Job Retention Scheme, where employees will receive 80% of their usual salary up to a maximum of £2,500, while employers need only pay national insurance and pension contributions. We will provide more support to the self-employed. We are increasing the Self-employment Income Support Scheme grant from 40% to 80% in November. This boosts the total grant from 40% to 55% of trading profits from November to January, up to a total of £5,160, aligning it with the furlough scheme. In addition, home owners hit by the pandemic can continue to claim a six-month mortgage holiday, and businesses that are required to close can receive non-repayable grants worth up to £3,000 a month. In total, these grants are worth over £1 billion a month.

We are also planning to extend the existing business loan schemes and the future fund to the end of January, as well as making it possible to top up bounce-back loans. Local authorities will also receive £1.1 billion to support businesses more broadly, and up to £500 million to support the local public health message through the contain outbreak management fund. We will also uplift the Barnett guarantee this week to give Scotland, Wales and Northern Ireland further certainty over their up-front funding.

These measures build on the Government’s economic package that now totals over £200 billion. They will provide security to millions of people while giving businesses the flexibility to adapt and plan, and they underline our unrelenting focus on listening and responding to the damaging path of this virus.”

My Lords, the announcement that the Self-employment Income Support Scheme grant will increase to 80% for November is welcome. However, the Chancellor still has not moved on the issue of the thousands who are not eligible for payments. When will the Government act to ensure that the scheme provides wider and fairer coverage, rather than awarding a 55% grant to some and nothing to others? In addition, can the Minister confirm whether the test and trace support payment will be extended to those who receive a notification via the NHS app? Will the size of the payment remain the same even if the Government reduce the self-isolation period to seven days, as has been reported in recent days?

My Lords, we are very aware of the pressure on self-employed people at the moment, and it is important to remind the House of the level of support that we have given. Up to 19 July, there were 2.7 million claims for SEISS, totalling £7.8 billion. On the second grant, up to 22 October, we had 2.3 million claims of up to £5.9 billion. We keep under review the whole issue of trying to protect those who have fallen through the cracks. As the noble Lord will know, in relation to the universal credit system, yesterday we announced that the removal of the minimum income floor has been put back until April, which will help. In relation to his very specific questions about linking the isolation payments to NHS Test and Trace, I will have to write to him, which I will do as soon as possible.

My Lords, the Minister did not answer the question on the 3 million people excluded, who are largely self-employed and just seemed too complicated to deal with last spring but surely could be provided for now? Will he specifically address that? Businesses are under extreme pressure: they are being asked to cope with constant stopping, starting and change in support schemes. Will the Minister now commit to extend 80% furlough and related schemes until the end of June, when we expect a vaccine, so that any business that will be viable, if it can survive the pandemic, can cope with the short-term constraints and closures?

As the noble Baroness will know, we have no certainty about when a vaccine will be available in quantity. She mentioned June next year, which is a possibility; it might be sooner or later. That is why we are not able to make long-term commitments. I tried to answer the questions that the noble Lord, Lord Tunnicliffe, asked about support for the self-employed and mentioned various mechanisms. She will know that, if they are businesses that have their own premises, we are providing support at £3,000 a month to go towards fixed costs like rates and running costs.

My Lords, my noble friend the Minister will know that I have written to him about a local business that I am sure is not alone in that, since the beginning of lockdown, its business, which is in exhibitions, has shrunk by 90%. It does not see any business coming back until autumn next year. It has taken out loans, made redundancies and done everything sensible, but the business rates keep having to be paid month on month on month, and that is getting extremely hard for it. What can the Government do to help businesses in that sort of circumstance?

I share my noble friend’s concern about small businesses: it is absolutely ghastly for all these people. I want to explain to him that all eligible businesses in retail, hospitality and leisure will pay no business rates in England for 12 months from 1 April 2020 until March next year. This support is worth almost £10 billion to business, and an estimated 735,000 retail, hospitality and leisure properties will be included in this over that period. There is no rateable value threshold on the support; businesses large and small can benefit. In addition to the business rates holiday, the Government have announced further measures in response to the second lockdown: as I mentioned to the noble Baroness a moment ago, cash grants of up to £3,000 a month, and the extension of the Coronavirus Job Retention Scheme until 2 December.

My Lords, there has been a particular problem in the rental market, whereby renters and landlords have suffered as a result of these latest measures. Given the temporary protection from eviction for those living in tier 2 and 3 areas, could the Government confirm whether an eviction ban will now be extended across the country and whether they will now develop a strategy to help tackle arrears brought on by Covid to avoid a tragic spike in homelessness?

My Lords, we will keep all these issues under review. As the right reverend Prelate will probably be aware, we have extended payment holidays on mortgages and certain consumer credit products to take pressure off individuals. In relation to his rental suggestions, we will keep them under review and will keep the House notified.

My Lords, yesterday in the Commons, the Chief Secretary to the Treasury responded to repeated questions from all sides of the House about whether the furlough scheme would continue at 80% in Scotland and Wales after 2 December if there was a continued lockdown. He said:

“the Government will always be there to provide support to all parts of the United Kingdom.”—[Official Report, Commons, 3/11/20; col. 166.]

We know that the Government will always be there, but will they provide support at 80% if the lockdown continues beyond 2 December? Will they provide that support not just in Scotland and Wales but in the north of England if the lockdown continues as it is at the moment?

My Lords, as I am sure the noble Lord knows, we have provided some £14 billion of funding to the devolved authorities. That is important because £1.3 billion was announced on 9 October. It is there to support businesses: in Scotland, for example, we have been able to support nearly 1 million jobs, some 6,500 businesses and 240,000 people in employment. I am aware of no proposal to change the 80% furlough either in England or in Scotland.

My Lords, I welcome the economic support being provided by the Government, which is unprecedented in our peacetime history. Despite that, is it not the case that, as we approach Christmas, very many individuals and businesses face an uncertain future, particularly in retail, hospitality and leisure? Therefore, does my noble friend agree that, for the economic health and well-being of our entire nation, it is vital that the second lockdown does not extend a moment beyond 2 December?

I absolutely agree that it is a top priority that we do not stay in lockdown for a day longer than we have to. It was done with great reluctance because of the very rapid expansion of the virus across parts of England, which had not seen it accelerating at the pace that it has in the last week or so. Nobody wins from a lockdown, but we are also very aware of the pressure on health services and need to ensure that the NHS is able to cope with the surge that is inevitably coming at us, as we know from the data we have now. This is one of the advantages that we have over the first lockdown: we see this tsunami of infections approaching a little further ahead than we did six or nine months ago. Therefore, we are trying to react to that, but I absolutely agree that we do not want to stay in lockdown for a moment longer than we have to.

My Lords, when the Government put England into a new lockdown, it was announced that the furlough scheme would be extended for England. When the Prime Minister was challenged whether this would likewise be the case for Scotland, he said of course it would, so why did the UK Government refuse the Welsh Government’s original request that furlough be available for businesses in Wales at those times when Wales is in lockdown, thereby ignoring the pressing needs of business in Wales and causing unnecessary uncertainty?

As the noble Lord will be aware, we have made very substantial payments to the devolved authorities over the last few months and increased those payments in October by £1.3 billion. We are all in this together, as my right honourable friend the Chief Secretary said yesterday. We keep all these situations under continual review.

My Lords, some firms are facing considerable difficulties in obtaining CBILS loans; I speak as chairman of the Cumbria Local Enterprise Partnership. This appears to be because some banks are reorganising their own internal arrangements in response to the crisis, while some are reluctant to deal with businesses that are not regular customers. What are the Government doing to ensure that these problems will be resolved and that the CBILS arrangements work as intended before the potential borrowers’ money runs out?

My Lords, my honourable friend the Economic Secretary is in constant dialogue with the banks on how all these schemes operate; he continues to try to help to improve them. If the noble Lord would like to write to me on the specific concern he mentioned, I will ensure that it gets the proper attention.

My Lords, the time allowed for this Question has elapsed. I apologise to the noble Baronesses, Lady Redfern and Lady Uddin, who were not able to put their questions.