Finance Bill

Part of the debate – in the House of Commons at 7:45 pm on 27th April 2020.

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Photo of Stephen Doughty Stephen Doughty Shadow Minister (Foreign and Commonwealth Affairs), Shadow Minister (International Development) 7:45 pm, 27th April 2020

Like my hon. Friends and many across the House, my primary aim today is to highlight the reality on the ground in our economy in constituencies such as Cardiff South and Penarth. It is clear that this unprecedented crisis has shown up the historic strengths and weaknesses of our economy and society, the fragility of our global trade and supply links, and the fact that we have for far too long undervalued many of those who are the lifeblood of our economy and society, including our incredible NHS, care and key workers and our small and microbusinesses.

This Finance Bill provides opportunities to address those challenges, and it is absolutely right, as the shadow Chancellor and others have done, to set out the challenges that apply equally at home and globally, whether that is keeping people in jobs and incomes, getting cash to, and ensuring liquidity for, struggling businesses to enable them to keep jobs now and recover quicker later, or preventing a slide into devasting poverty and deeper inequality by providing the right safety nets.

I praise the work of our Welsh Labour Government here in Wales and my local councils in Cardiff and the Vale of Glamorgan for the speed and effort they have shown in responding to the crisis, getting cash out of the door and into the hands of those who need it. The Welsh Government’s £500 million economic resilience fund, part of over £1.7 billion of support, has been intended to fill as many gaps as possible in the financial support for businesses. Since it opened to applications, it has received almost 9,000 requests for support, which is evidence of the scale of demand. The Development Bank of Wales is also making real money available to businesses and processing applications faster and more efficiently than many of the high street banks—a point that I will come to, and which Mr Bone exposed.

For microbusinesses, although I welcome the Chancellor’s announcements today on smaller loans, I note that the Welsh Government have already stepped in with grants for microbusinesses, including start-ups. The Welsh and UK Governments must also work together to support major anchor industries, including the steel and creative industries, which are crucial in my constituency, whether it is Celsa Steel or our world-beating film and TV production companies. Immediate support is needed, but beyond that it is also important to ensure support for the UK Steel Charter, for example, and its procurement principles.

I heard today from the internationally renowned Wales Millennium Centre—which is currently displaying in its window a huge “Diolch yn fawr NHS” sign to say thank you—which has an annual economic impact of over £70 million locally and sustains over 1,000 jobs. The Wales Millennium Centre has benefited from the furlough scheme, but it seems likely that restrictions on theatre and mass gatherings will be among the last to be lifted, so will the job retention scheme be extended to cover the whole closure period?

The hon. Member for Wellingborough, who spoke before me, was absolutely right to highlight the reality of the CBILS scheme. I am finding very similar issues, with banks making themselves inaccessible even to phone calls, let alone giving the loans that businesses have needed. I have had businesses refused on viability grounds, which in one case was apparently based on poorer than expected performance for the last two years during the Brexit uncertainty. Despite a significant upturn since last year, that business has had a loan refused. It is simply not good enough, and I hope the Chancellor will crack down on UK Finance and its members.

A particular concern that I have encountered is the issues facing the creative industries, particularly pay-as-you-earn freelancers. A Musicians’ Union survey of over 1,000 musicians shows that 38% of respondents do not qualify for the Government’s assistance schemes, with one in five saying the problems caused by coronavirus may force them to abandon their career as a musician in the long term. One of the issues appears to be whether people were on the RTI—realtime information—submissions scheme to HMRC in time. I would argue that we should use the end of March RTI, to include freelancers on contracts who started before 19 March.

There is also an issue facing those who did not have an employer from 28 February onwards, who therefore do not have an employer to furlough them, and who are ineligible for the self-employment income support scheme as they pay their tax by PAYE. The Chancellor needs to take steps to support those individuals. There are also major issues affecting the newly self-employed, who do not have access to the support systems because the system does not allow for 2019-20 tax returns, and who have no employer to furlough them. What can the Government do to support those in that group, who seem to be falling through the gaps?

I have also heard from many in the taxi and private hire industry, which is facing particular structures, who also need support. I urge the Chancellor to listen closely to the trade unions and others who are exposing the issues that they are facing. The issue of those who pay themselves through a small number of dividends has also been highlighted. I have been contacted by local companies affected by that; indeed, I was approached by one business of that type just today. Many such firms are weeks away from folding after burning through their cash reserves and finding little support.

Insurance companies have been mentioned. The Association of British Insurers and others need to start acting in the interests of the economy and in the spirit of these difficult times. One of my excellent local pubs in Grangetown in Cardiff has paid substantial sums for insurance but is now facing difficulties making a claim with the firm RSA, which made more than £7 billion of revenue in 2018.

Internationally, it is clear that we face a massive crisis—it is not just in this country—and the only way to approach it is multilaterally. That is in our national interest as well. We must maintain such levels and ambitions for co-ordinated action as the former Prime Minister Gordon Brown and others have argued for, lest we see economic and financial contagion rebound on us and the ability of our economy to come out of this. We need support through liquidity injections, debt relief and the maintenance of aid and investment flows. That will be in the interests of us all in the future.