Economic Update

Part of the debate – in the House of Commons at 1:03 pm on 8th July 2020.

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Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer 1:03 pm, 8th July 2020

I thank the hon. Lady for that contribution. Throughout this crisis, she and I have spoken and, where possible, I have tried to find common ground for our measures with as broad a coalition as possible, including with members of the Opposition. I do feel that it is necessary, however, to reiterate just a few points. She talked about vulnerable people, but, as I said, the analysis published today shows that our interventions have helped the poorest in our society the most. Those are the values of this Conservative Government. We will make sure that no one is left behind during this time of national crisis, and we will ensure that those who are most vulnerable get the support and protection that they deserve

The hon. Lady also talked about jobs and the difference in different countries’ reactions to the labour market. She is right: our economy is more reliant on consumption than other economies. It is also more reliant on social consumption than other economies. That is why the acute difficulty of social distancing and the shutdowns have affected our economy more than others. That is why, to help protect those 2 million jobs in the 150,000 businesses in those sectors and the people who are, on average, lower paid—women, black and minority ethnic communities, and rural and coastal communities—we have put in place what I believe to be bold and decisive measures to help protect employment in those sectors.

The hon. Lady talked about conditionality on funds that we provided. Here, she has to choose. It cannot be that you can develop significant interventions to provide liquidity and cash support to businesses at scale and speed, while at the same time having an incredibly targeted approach, imposing conditions on individual businesses. You have to choose one or the other. We unashamedly chose the former. The speed of what was happening to our economy and the scale of what was happening demanded an approach that required us to take a broad-brush approach, and that was the way we could get help to as many people as possible as quickly as possible. But where individual businesses come to the taxpayer and require bespoke support, it is right that we impose conditions on those businesses. I have been very clear that that is what I would do and, indeed, that is what we have done. Without going into the details, as that would be inappropriate, such interventions will come with conditions: conditions on executive pay, protecting employment, climate change obligations, how supply chains and small businesses are treated, and obligations around tax. Those are all commitments and conditions that the taxpayer would expect us to make and that is what we have done in the one instance where the support has been provided thus far. It is what we will do for any future support.

The hon. Lady talked about a green recovery. This Government are proud of their record on our environment. She talks about Germany and other countries. When I stood here in March, we outlined one of the most ambitious and far-reaching investment programmes for our environment and tackling net zero from any Government this country has ever seen. Carbon capture and storage, the nature for climate fund, investing to further the support for electric vehicles, new charging stations, tackling air quality, taxes on polluters—those are all measures we have already taken. I am glad that other countries are catching up. We have decarbonised faster than almost every other European country. It is a record that those of us on the Government Benches are proud of.

The measures we have announced today represent some of the most far-reaching measures any country has taken to tackle energy efficiency. They will provide thousands of pounds of grants for homeowners up and down the country to create local jobs and ensure we can reduce carbon emissions from our housing stock, which today account for almost a fifth of all our emissions. The Committee on Climate Change has said we must address that. In our manifesto, we committed to addressing it. Rather than waiting to get started and rather than the five-year plan outlined in our manifesto, we are getting on with it today.

The hon. Lady spoke about furlough. Here again, I make no apology for the fact that we must and should wind down this scheme. I am glad that today the OECD made it clear that it also believes wage support schemes must be carefully wound down in order to get people back to work, protect jobs and return to growth. I see the hon. Lady has moved around on this issue. She said at the end of May that a targeted approach would “pose challenges” and force “hard choices”. I have not heard from the hon. Lady how she would solve those challenges and hard choices, but we remain committed to protecting people in their jobs. We understand that businesses that have had to furlough employees have been through a difficult time, which is why today we outlined a £9 billion policy—the job retention bonus—to support workers and to support businesses who bring those furloughed workers back.

Lastly, the hon. Lady talked about the future jobs fund. I am guided by the evidence. Parts of that scheme did work well and I am not dogmatic—I will do what works—but there are major differences to the kick-starter scheme. The kick-starter scheme will be bigger. It will help more young people. It will be broader, involving the private sector. It will be better value for the taxpayer, ensuring less money is spent on administration fees and more money is in the pockets of young people working.

We have questions from the hon. Lady, We have opinions from the hon. Lady, and last week, we even had tests from the hon. Lady. The one thing we do not have from her is a plan. I closed my statement by saying that this Government were making an unambiguous choice to make this moment meaningful for our country. Now, Labour Members must choose. Do they believe, as we do, that Britain has the energy and power to bounce back? Do they have confidence, as we do, in our incredible public services? Do they believe, as we do, in the enterprising spirit of British business? If they do, then they should do what is right and back our plan for jobs.