Protection of Jobs and Businesses

Part of the debate – in the House of Commons at 1:11 pm on 9th September 2020.

Alert me about debates like this

Photo of Steve Barclay Steve Barclay The Chief Secretary to the Treasury 1:11 pm, 9th September 2020

Having been Brexit Secretary over the previous year and Chief Secretary during this economic challenge, I can say that we will come through this, as the Chancellor has set out, and we will come to a time when we can look at the scheme in the way that the hon. Gentleman refers to.

The scheme has protected up to 10 million jobs. The shadow Chancellor raised the duration of the scheme, and I understand those concerns. It has been one of the most difficult decisions that the Government have taken, but it is the right one. I remind the House of the extent of the support that we have offered. First, the furlough is already over eight months. It is one of the most generous schemes in the world, and we have been contributing at a higher rate of people’s wages than in Spain. We are supporting a wider range of businesses than in New Zealand, and our scheme will run for twice as long as in Denmark.

I remind the House that our support for furloughed employees does not end in October, as has been suggested in some interventions. In the Chancellor’s summer statement, he announced the new job retention bonus, which will pay employers £1,000 for every employee still in post by the end of January. For an average employee, that is a subsidy worth 20% of their salary—nearly double the amount of subsidy that a cut in employer’s national insurance would have provided, which I know some people were calling for prior to the Chancellor’s announcement of the bonus. I further remind the House that most people on furlough are employed by very small businesses where £1,000 is a significant and welcome boost.

While we will continue to support furloughed employees through the job retention bonus, it is right that the main scheme comes to an end. We need to focus now on providing people with new opportunities, rather than offering false hope that they will always be able to return to the same job they had before. It is in no one’s long-term interests for the scheme to continue, least of all those trapped in a job that only exists because of the furlough scheme.

To those calling for a new targeted or sector-based furlough, I simply pose three questions that I have still not heard answered satisfactorily today. First, which sectors would we not provide support for? Secondly, what would we do about the supply chains of those sectors on furlough, which can reach across the whole economy? Thirdly, most observers have accepted that the furlough cannot last forever, so how long would we extend it for? Without being able to answer those questions, any proposal for a sector-specific furlough cannot be seen as a serious one—