The Economy

– in the House of Commons at 11:56 am on 24th September 2020.

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Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer 11:56 am, 24th September 2020

Thank you for granting me permission to make this statement to the House, Mr Speaker. Earlier this week, the Prime Minister set out the next stage of the Government’s health response to coronavirus. Today, I want to explain the next phase of our planned economic response. The House will be reassured to know that I have been developing plans to protect jobs and the economy over the winter period—plans that seek to strike a finely judged balance between managing the virus and protecting the jobs and livelihoods of millions.

I know that people are anxious, afraid and exhausted at the prospect of further restrictions on our economic and social freedoms. I share those feelings, but there are reasons to be cautiously optimistic. We are in a fundamentally different position than we were in March, and we now know much more about this virus. Public awareness of the risks and how to mitigate them is far greater, and we have met our promise to give the NHS whatever it needs, with significant new funding for NHS capacity and for personal protective equipment. I can inform the House that we have now provided over £12 billion for test and trace.

In economic terms, while our output remains well below what it was in February, we have seen three consecutive months of growth, and millions of people have moved off the furlough and back to work. But the resurgence of the virus and the measures we need to take in response pose a threat to this fragile economic recovery, so our task now is to move to the next stage of our economic plan, nurturing the recovery by protecting jobs through the difficult winter months.

The underlying rationale for the next phase of economic support must be different from what came before. The primary goal of our economic policy remains unchanged—to support people’s jobs—but the way we achieve that must evolve. Back in March, we hoped we were facing a temporary period of disruption. In response, we provided one of the most generous and comprehensive economic plans anywhere in the world, with £190 billion of support for people, businesses and public services as we have protected our economic capacity. It is now clear, as the Prime Minister and our scientific advisers have said, that for at least the next six months the virus and restrictions are going to be a fact of our lives. Our economy is now likely to undergo a more permanent adjustment. The sources of our economic growth and the kinds of jobs we create will adapt and evolve to the new normal, and our plan needs to adapt and evolve in response.

Above all, we need to face up to the trade-offs and hard choices that coronavirus presents, and there has been no harder choice than the decision to end the furlough scheme. The furlough was the right policy at the time we introduced it. It provided immediate short-term protection for millions of jobs through a period of acute crisis, but as the economy reopens, it is fundamentally wrong to hold people in jobs that only exist inside the furlough. We need to create new opportunities and allow the economy to move forward, and that means supporting people to be in viable jobs that provide genuine security.

As I have said throughout this crisis, I cannot save every business. I cannot save every job. No Chancellor could. But what we can and must do is deal with the real problems businesses and employees are facing now. In March, the problem was that we ordered businesses to close. In response, we paid people to stay at home and not work. Today, the problem is different. Many businesses are operating safely and viably, but they now face uncertainty and reduced demand over the winter months. What those businesses need is support to bring people back to work and protect as many viable jobs as we can.

To do that, I am announcing today the new jobs support scheme. The Government will directly support the wages of people in work, giving businesses that face depressed demand the option of keeping employees in a job on shorter hours, rather than making them redundant.

The job support scheme is built on three principles. First, it will support viable jobs. To make sure of that, employees must work at least a third of their normal hours and be paid for that work as normal by their employer. The Government, together with employers, will then increase those people’s wages, covering two thirds of the pay they have lost by reducing their working hours. The employee will keep their job.

Secondly, we will target support at firms that need it most. All small and medium-sized businesses are eligible, but larger businesses only when their turnover has fallen through the crisis.

Thirdly, it will be open to employers across the United Kingdom, even if they have not previously used the furlough scheme.

The scheme will run for six months, starting in November. Employers retaining furloughed staff on shorter hours can claim both the job support scheme and the jobs retention bonus.

Throughout this crisis, we have sought parity between employees and the self-employed, providing more than £13 billion of support to over 2.6 million self-employed small businesses, so I am extending the existing self-employed grant on similar terms and conditions as the new jobs support scheme.

These are radical interventions in the UK labour market—policies we have never tried in this country before. Together with their jobs retention bonus, the kickstart scheme for young people, tens of billions of pounds of job creation schemes and new investment in training and apprenticeships, we are protecting millions of jobs and businesses.

If we want to protect jobs this winter, the second major challenge is helping businesses with cash flow. Over the past six months, we have supported business with tens of billions of pounds of tax deferrals and generous Government-backed loans. Those policies have been a lifeline, but right now businesses need every extra pound to protect jobs, rather than repaying loans and tax deferrals, so I am taking four further steps today to make that happen.

First, bounce back loans have given over a million small businesses a £38 billion boost to survive this pandemic. To give those businesses more time and greater flexibility to repay their loans, we are introducing pay as you grow. This means loans can now be extended from six to 10 years, nearly halving the average monthly repayment. Businesses that are struggling can now choose to make interest-only payments, and anyone in real trouble can apply to suspend repayments altogether for up to six months. No business taking up pay as you grow will see its credit rating affected as a result.

Secondly, I am also changing the terms of our other loan schemes. More than 60,000 small and medium-sized businesses have taken out coronavirus business interruption loans. To help them, I plan to extend the Government guarantee on those loans for up to 10 years, making it easier for lenders to give more people more time to repay. I am also extending the deadline for all our loan schemes to the end of this year, and we are starting work on a new successor loan guarantee programme that is set to begin in January.

Thirdly, I want to give businesses more time and flexibility over their deferred tax bills. Nearly half a million businesses deferred more than £30 billion of VAT this year. Under current plans, those payments fall due in March. Instead, I will allow businesses to spread that VAT bill over 11 smaller repayments, with no interest to pay. Any of the millions of self-assessed income tax payers who need extra help can also now extend their outstanding tax bill over 12 months from next January.

The final step I am taking today will support two of the most affected sectors: hospitality and tourism. Under current plans, their VAT rates will increase from 5% to the standard rate of 20% on 13 January. To support more than 150,000 businesses and help to protect 2.4 million jobs through the winter, today I announce that we are cancelling the planned increase, and will keep the lower 5% VAT rate until 31 March next year.

Today’s measures mark an important evolution in our approach. Our lives can no longer be put on hold. Since May we have taken steps to liberate our economy and society. We did those things because life means more than simply existing. We find meaning and hope through our friends and family, and through our work and community. People were not wrong for wanting that meaning, and for striving towards normality, and neither were the Government wrong to want that for them. I said in the summer that we must endure, and live with the uncertainty of the moment, and that means learning our new limits as we go. The truth is that responsibility for defeating coronavirus cannot be held by the Government alone. It is a collective responsibility, shared by all, because the cost is paid by all.

We have so often spoken about the virus in terms of lives lost, but the price our country is paying is wider than that. The Government have done much to mitigate the effects of those awful trade-offs between health, education, and employment, and as we think about the next few weeks and months, we must bear all those costs in mind. As such, it would be dishonest to say that there is now a risk-free solution, or that we can mandate behaviour to such an extent that we lose any sense of personal responsibility. What was true at the beginning of this crisis remains true now: it is on all of us, and we must learn to live with it, and live without fear. I commend this statement to the House.

Photo of Anneliese Dodds Anneliese Dodds Shadow Chancellor of the Exchequer 12:09 pm, 24th September 2020

I thank the Chancellor for his statement and for advance sight of this announcement. I have called for the introduction of a system of targeted wage support 40 times. That call has been rebuffed by the Government 20 times. It is a relief that the Government have U-turned now, but we must be open and honest: that delay in introducing this new scheme will have impacted on businesses’ confidence. I know that from talking to them, and I am sure that Government Members know that from talking to businesses in their constituencies.

The deadline for redundancy consultations by large firms before the end of the furlough scheme came and went last week without a word from the Government. If the package of measures announced today can help people keep their jobs and help businesses through hard times, Labour will of course support it. There is much in the statement that we do support—as I just said, we have repeatedly called for a system of targeted wage support, and we have called for help for indebted, cash-strapped businesses over and over again—but we must ensure that these measures are as effective as possible at keeping workers in employment, getting unemployed people back into work and keeping viable businesses in operation.

As with many previous announcements by the Government, we must wait for the detail to be revealed—presumably following the press conference scheduled for later on today. Workers and businesses are hanging on the Chancellor’s every word right now, and they need to know what is promised here. So can the Chancellor be clear: will the wage support scheme actually keep more people in work? For that to happen, the scheme must make it more attractive for employers to retain more staff on reduced hours than to retain some full time and make others redundant. Does his scheme actually incentivise short-hours working?

What conditions, if any, will be applied to ensure value for public money? Will the scheme require commitments to continuing employment, unlike the existing furlough scheme, where there have been abuses? Will it require those participating to provide decent, sustainable work?

Will the scheme incentivise training and retraining? The German scheme does, and Labour has called for a UK version to include incentives for training, but that is missing here. Indeed, while, as I said, we welcome many of the elements that the Chancellor has announced, the lack of action on training and skills is worrying. I was waiting and waiting for the Chancellor to talk about training. He mentioned the word once, in passing. That is not enough. His Government have already allocated funding for a national skills strategy, but it is not being delivered on the ground. When will the Chancellor get serious about training so that people can be ready for the jobs of the future? He mentioned the fact that our economy is changing. Let us make sure that our population is ready for that change.

Labour has called repeatedly for continued, targeted support for the self-employed, so I am pleased that that is referred to here, but will these measures avoid the gaps in coverage that have bedevilled existing schemes? Why is there no forward plan for the needs of those who are extremely clinically vulnerable to the disease? Belatedly, will the Chancellor do more to demand that his colleagues get a grip on the UK’s public health crisis? Our country is suffering from a double tragedy: the highest excess death rate in Europe and the deepest recession in the G7.

Labour supports the Government in their announcement of additional restrictions this week. The Government’s messaging has been confused enough already, so the last thing we want to do is add to that confusion, but we are concerned that these restrictions are necessary only because of continuing problems with test, trace and isolate. The Chancellor referred to the money put into test, trace and isolate. As I said earlier this week, enormous sums have been devoted to that task, but those sums are not delivering the system that we need. We are still not at the stage of many other countries. The Chancellor must work on that, as well as his other colleagues in Government.

Finally, before the summer recess, Labour called for a back to work Budget focused on jobs, jobs, jobs. We did not get one. We expected a Budget this autumn. It appears, again, that we are not getting one. That is despite the challenges it poses for devolved Governments, and despite the fact that the Government have actually referred to provisions in a future Finance Bill as necessary for their approach to Brexit. The Chancellor announced that he would make a statement to Parliament today only after I had called for him to come here to answer an urgent question; I am very grateful to you, Mr Speaker, for granting that.

This Government have lagged behind on test, trace and isolate. They have lagged behind on wage support. They have lagged behind on support for those having to self-isolate. They are lagging behind on green investment. For these and for other reasons, it looks like our recovery will be lagging behind that of many other countries. So, finally, when will the Chancellor provide the back to work Budget that this country needs?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

I thank the hon. Lady for her comments. On the question of continued support for jobs, however, I had hoped that she would have welcomed strongly today’s measures, if for no other reason than that she has previously asked for something similar. However, her position on this matter has been somewhat changeable. At different points in the last few weeks and months, she has said that furlough should not go on for ever, and then changed her mind and said that we should extend it. Then she changed her mind and said it should be replaced, and then only yesterday the Leader of the Opposition said it should be extended again. That is not the kind of certainty that British businesses or British workers need.

To address the specific questions, this scheme absolutely does incentivise shorter time working. The company will pay its workers for the time that they are in work, and the Government and the employer jointly will subsidise the time the worker is not working. The conditions will be set out in guidance, which will be published shortly, and then over the next few weeks the further details will be worked through with businesses and unions, as we did with the furlough scheme.

I can reassure the hon. Lady that the new scheme does indeed have the conditionality that is appropriate for this stage of our response. Notably, this scheme will be available only for larger companies that are seeing a decline in their revenues as a result of coronavirus, ensuring that our support is targeted where it is most needed. Similarly, there will be restrictions on larger companies in capital distributions to shareholders while they are in receipt of money for their workers under this scheme. Indeed, they will not be able to give redundancy notices to those workers who are on this scheme throughout its duration.

We have increased training both for post-16 at the Budget and, indeed, in the recent plan for jobs, providing increased access for school leavers to level 2 qualifications across the board. Notably, one of the hallmarks of our skills system is our successful apprenticeship programme. What we announced in July was a significant increase in the incentive payment to businesses for taking on a new apprentice: a £2,000 cash incentive to businesses to take on an apprentice and provide that valuable in-work training that we know makes such a difference to young people’s futures. So we are committed to providing especially our young people with the opportunities that they need to succeed in the future.

The hon. Lady talked about jobs. In July, we outlined a £30 billion plan for jobs—to support, create and protect jobs across every part of our United Kingdom. Chief among the initiatives was the kickstart scheme, where right now employers—small, medium-sized and large—are rushing to put in applications to take on a young kickstarter later this autumn, to provide them with the opportunities that they need at an incredibly difficult time. I can assure this House and the country that my No. 1 economic priority is to protect people’s jobs, and that is what this Government will continue to do.

In conclusion, the Opposition wanted the furlough extended, but they never said for how long. Then they wanted the furlough replaced, but they would not say what with. Then they wanted the furlough targeted, but they would not say on whom. I do stand ready to work with the hon. Lady, if she knew exactly what she wanted. Today, the Government stand with the British people and British business, with the CBI, the British Chambers of Commerce and the Trades Union Congress, in bringing much-needed support to the economy. Yesterday, the Leader of the Opposition called for a plan B for the economy. The Labour party does not even have a plan A.

Photo of Mel Stride Mel Stride Chair, Treasury Committee, Chair, Treasury Committee

The devil, of course, will be in the detail, but from what I have heard, I broadly and warmly welcome this statement. I am encouraged by the job support scheme and the fact that it is targeted, for which I and my Committee have been calling for some time. I am encouraged by the announcements on loans and the pay-as-you-grow scheme, particularly to help small and medium-sized enterprises, and I am encouraged that the self-employed will have their scheme extended.

However, my right hon. Friend will know that there was considerable concern that many self-employed people fell through the gaps of the support provided. Will he say something about whether some of those gaps will be ameliorated or ironed out as a consequence of the new measures, and will he meet me in fairly short order to discuss the options that might be available?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

I thank my right hon. Friend for his comments; I am sure he will see in much of what we have announced today some of the thinking in his latest report. I thank him and his Committee members for all the input they have provided in helping us to think about the next phase of our economic response. He is right that this package focuses on employment and, indeed, on supporting businesses with their cash flow.

With regard to the self-employed, I am glad my right hon. Friend welcomes the extension of the existing support grant. Virtually no other country in the world has done that, and it comes on top of the most generous support for our self-employed of almost any country throughout the response to this crisis. Of course, I will be happy to meet him, but I know he will also be pleased to learn that the measures today to defer income tax self-assessment will be of particular importance to our self-employed small businesses.

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Treasury)

Scottish National party Members are glad that the Chancellor has accepted the need to extend support, but it comes very late in the day and is little comfort to those who have already lost their jobs due to the impending end of the furlough scheme. Industry, trade unions, the Treasury Committee, people across the country and hon. Members across parties in this House have been pleading with him for months now, and it feels as if it is only the latest spike that has prompted his action.

Coronavirus is not done with us yet. The furlough scheme has saved jobs and kept people paying their bills and mortgages. It has been incredibly important and it is a shame that the Chancellor is ending it at the end of next month. Hospitality, travel and tourism, aviation exhibitions, culture and performing arts, even travelling showpeople, and a host of others cannot go back to normal work because the Government have placed restrictions on their businesses.

Those jobs and those businesses are viable—it is not for the Chancellor to decide the viability of businesses. Ending the scheme put 61,000 Scottish jobs at risk. His measures on the pay-as-you-grow scheme recognise that many businesses have deferred payments and have mounting debt. However, the problem for many businesses is not income deferred, but income lost completely, so will he go further and convert those loans to grants and equity, to give companies a bit more certainty about their future? We welcome the hospitality and tourism VAT cut, but will he reassess that in March and perhaps consider keeping it in place permanently to help those businesses pick up, hopefully, through an improved situation next summer?

There is nothing here, nothing whatsoever, for those who have been excluded from existing support schemes—for freelancers, the Forgotten Ltd, the pay-as-you-earn employees, the new starters, the women on maternity and all those who have had not one penny piece from this Government for six months. The Chancellor cannot say he does not know that that is a problem, although he still refuses to meet them. How dare he say that these 3 million people should be left high and dry with nothing?

Will the Chancellor introduce further conditions to prevent unscrupulous employers from exploiting the new schemes as BAE and others have done? Will he support the fire and rehire Bill from my hon. Friend and colleague Gavin Newlands, which would prevent that exploitation in future?

The Chancellor did not have the courtesy to lift the phone to the Cabinet Secretary for Finance in the Scottish Government, Kate Forbes, or her counterparts in Wales and Northern Ireland, to let her know that he plans to scrap the autumn Budget. They found out on Twitter. It is not the first time this Government have had a lack of respect for the devolved institutions, because that happened last year, too. Does he appreciate the very difficult situation he has created? With no access to the fiscal levers and no clarity on the funding settlement, he has tied both of Kate Forbes’s hands behind her back. What does he intend to do about that?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

I think the hon. Lady is continuing to ask for an extension of the furlough scheme, but fundamentally I do not believe that that would be the right thing to do. At this stage of the economic recovery it is better that our support is targeted and focused on supporting viable jobs in our economy, and that means a new approach. Extending the furlough and allowing people to be at home full time is not the right approach in this phase of the economic crisis. Our new scheme will ensure that we provide support to those who need it most and protect as many viable jobs as possible in many of the industries she mentioned.

The hon. Lady asked about conditions. I agree with her that there should be conditions on larger companies accessing support from the Government for wage protection. There will be conditions on capital redistributions and on the ability to provide redundancy notices to employees while they are on the scheme, and, in the first place, limiting the eligibility for large companies to those that are most in need.

On dialogue with the Scottish Government, I am pleased to say that the Chief Secretary to the Treasury speaks regularly with his counterparts, as I believe he will be doing very shortly. There is a well worked process for how devolved nations’ budgets are set. There is absolutely no requirement for a UK Budget to be done beforehand. Indeed, that was not the case earlier this spring. We will have Office for Budget Responsibility forecasts later this autumn. On the basis of those forecasts, the normal work will be done with our counterparts in the devolved authorities to ensure that they can set the budgets they need.

Photo of Douglas Ross Douglas Ross Conservative, Moray

Over 900,000 Scottish jobs have been protected as a result of the UK Government’s furlough scheme during the worst of this crisis, ensuring that over the past six months hundreds of thousands of Scottish families have continued to maintain a regular income. I welcome the further support announced by the UK Government today. Will the Chancellor of the Exchequer outline how the UK Government measures will benefit communities, businesses, individuals and families across Scotland as we enter this next difficult phase in our fight against coronavirus?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

I am grateful to my hon. Friend for his question and for the conversations he has had with both me and the Prime Minister on the importance of supporting every part of our United Kingdom as we go through this economic crisis and drive our recovery forward. That is something this Government will always take very seriously. He has been very helpful and played a valuable role in ensuring that the measures we have put in place today will benefit companies and workers in every single part of our United Kingdom.

Photo of Charlotte Nichols Charlotte Nichols Labour, Warrington North

Large parts of the north, including my constituency, are under extra restrictions but are not being given additional support from the Treasury, whether it is our local authorities or our businesses. If the Government’s levelling up agenda is to mean anything, that must be urgently addressed. Today’s statement is a significant change of direction from “whatever it takes”, so what extra measures will the Chancellor provide to constituencies such as mine to ensure we are not levelled down as a result of the pandemic?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

There is support in place for local authorities, through the NHS, for any response in areas of tightened restrictions, whether for community information or enhanced testing. Recently, we outlined a self-isolation incentive payment of up to £500 and a business grant support scheme for businesses that have been ordered to close. The Government remain committed to levelling up in every part of our country, as outlined in our ambitious plans to invest in infrastructure in every part of our country.

Photo of Lee Anderson Lee Anderson Conservative, Ashfield

The eat out to help out scheme was a massive success in Ashfield, with 53,000 meals served. The scheme saved thousands of jobs and kept hundreds of businesses open. However, my wife is not happy with the Chancellor, because I put a stone on in weight in August, which meant I needed bigger clothes. Jono Edwards, who owns the world-famous Junction Bar & Restaurant, is very happy with the Chancellor. Jono tells me that without the Chancellor’s support his bar would have closed and his staff, who are like a family to him, would have lost their jobs. May I pass on my thanks to the Chancellor from every single pub and hospitality business in Ashfield for extending the 5% VAT cut until next March? Jono Edwards, Dame Margo and Donna at the Junction pub will be very happy with this great news.

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

I thank my hon. Friend, and I am glad that our initiatives have made such a difference on the ground to people in his constituency in protecting jobs, as I am sure they have elsewhere. I very much hope that I can come to visit him and Jono and his team at the Junction pub in the near future, and I wish them every support through the next few months. I hope that the measures we have put in place today will ensure that they continue to thrive in the future.

Photo of Rachel Hopkins Rachel Hopkins Labour, Luton South

I have called for targeted support for jobs in the aviation sector a number of times. The sector would be viable if not for the impact of coronavirus, but in my constituency easyJet, Tui and Luton Airport have already been forced into making redundancies due to the lack of Government support. Can the Chancellor explain why the Government waited until a week after the deadline passed for consultation on large redundancies caused by the end of the coronavirus job retention scheme to announce its replacement?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

Our response will continue to evolve as the circumstances demand. With respect to aviation, I have every sympathy for companies and employees in that sector; obviously, they have been very hard hit. The measures that we have put in place have made a significant difference to businesses in that sector. Indeed, I think that one of the ones the hon. Lady mentioned is among the many that have accessed some of our much larger loan schemes to provide vital liquidity at a very difficult time, and I know that many businesses in the aerospace supply chain will particularly welcome the part-time working job support scheme we have announced today, as it will be particularly well suited to their manufacturing businesses.

Photo of Peter Aldous Peter Aldous Conservative, Waveney

I welcome the Chancellor’s statement. His stamp duty holiday, which is due to expire on 31 March, has been extremely successful in stimulating an important part of the UK economy. What plans does he have for further housing initiatives, which will not only generate business activity but, if properly focused, also alleviate poverty and promote social mobility?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

My hon. Friend is absolutely right to say that the stamp duty cut is driving activity in the housing market, which is helping to protect jobs in that sector. I would point him to our green homes grant, which the Department for Business, Energy and Industrial Strategy is going to roll out shortly and which will provide households with a grant of up to £5,000 to subsidise initiatives to improve the insulation and energy efficiency of their homes. There will be larger grants available for those households most in need, as determined by their local authorities, helping them not only to save on carbon emissions but to save up to £300 a year on their energy bills.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Energy and Climate Change)

We talk about a green industrial revolution and the Chancellor talks about job protection, yet just last week, Scottish yards missed out on the procurement contracts for the Seagreen offshore wind project. In terms of real job creation, will he consider the Scottish Government’s plea for an £80 billion UK stimulus? Will he also confirm when the national infrastructure strategy and the energy White Paper will be published and, crucially, will he instruct officials to look at how the contracts for difference process works and change it so that it incentivises the use of UK supply chains?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

The hon. Gentleman is absolutely right about the importance of offshore wind to our economy. It is something that we have a global strategic competitive advantage in, and this Government will continue to support the sector in the way that we have. I am always open to new ideas about how to do that, but we must ensure that we double down on our advantage and drive jobs in every part of our country, not just in Scotland but in the north-east, where we have considerable advantages over other countries, not just in providing energy but now in manufacturing more of the content that goes into our turbines.

Photo of Jacob Young Jacob Young Conservative, Redcar

I thank my right hon. Friend for his statement. Does he agree that, as the coronavirus is now threatening our recovery, it is right that we focus our support on the problems that businesses in Redcar and Cleveland and elsewhere are facing right now? Support for viable businesses and viable jobs through a time of depressed demand due to the restrictions that virus threatens is exactly what the new job support scheme delivers.

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

My hon. Friend is absolutely right. He knows all too well what the businesses in his constituency need, which is support to get through this period of depressed demand. They need our support to protect those viable jobs and to help them get through to the other side, and that is exactly what the job support scheme will deliver.

Photo of Stephen Farry Stephen Farry Alliance, North Down

It is right that the economic support schemes evolve, and this will be a lifeline for many people in Northern Ireland. The Prime Minister has talked about embracing everyone and the need for creativity and innovation, but surely there are two gaps in today’s announcements: first, the excluded; and secondly, the companies where even paying a third of the wages is not a viable option at this time even though they do have sustainable futures, such as in the arts and creative industries and aerospace.

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

In terms of the arts and creative industries, we have provided over £1.5 billion of funding to support vital institutions in every part of the United Kingdom through that scheme, but it is important now that support is focused on companies that can provide viable jobs, with a genuinely secure future for their employees. As we have set the scheme, it is very similar to those around the world and gets that balance right, being generous with our support but also making sure that support is targeted where it can do the most good.

Photo of Joy Morrissey Joy Morrissey Conservative, Beaconsfield

I thank my right hon. Friend for listening to Members’ concerns about small businesses and the self-employed and for taking the time to engage with us and hear our concerns. In Beaconsfield, we have 4,000 people who have already benefited from the Government’s self-employed income support scheme, protecting their livelihoods. I therefore welcome today’s announcement that we will continue the support for the self-employed, through a further extension in the grant, and continue our unprecedented support for both the employed and self-employed. May I invite him to Marlow to see all the good work that he has done through his schemes?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

I am very happy to take up my hon. Friend’s invitation. She is right to highlight the very comprehensive support that we have put in place for the self-employed. Compared with almost any other country anywhere in the world, it is more comprehensive, generous and has lasted for far longer than one can find elsewhere.

Photo of Rosie Winterton Rosie Winterton Deputy Speaker (First Deputy Chairman of Ways and Means)

We seem to be having some trouble hearing Christine Jardine. I will move on and try to come back to her if we can sort out what is wrong with the sound.

Photo of Stephen Crabb Stephen Crabb Chair, Welsh Affairs Committee, Chair, Welsh Affairs Committee

Throughout this crisis, the Chancellor has moved with speed and determination to protect jobs and family incomes. I welcome his comments today about targeting job support on viable companies with viable jobs. Implicit in that, though, is a recognition that, sadly, unemployment will continue to increase, so will he say a bit more about the importance of the social security safety net at this time and reaffirm the importance of the increase that we made right at the start of this crisis to universal credit and perhaps tell us that there is no intention on the part of the Government to withdraw it?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

I welcome my right hon. Friend’s comments. He knows better than most what a difference our welfare system and, indeed, the Department for Work and Pensions and its phenomenal staff can make on the ground. I know that he will join me in welcoming not only the increase, temporarily, that we have put on universal credit for this year, providing almost £1,000 extra to those who are in receipt of it, but our further increases in and generosity with the local housing allowance and the provision of hardship funds to those struggling to pay their council tax bills, distributed through local authorities. In some areas, that represents a significant amount of support for the most vulnerable in our society—a point that was borne out in the distribution analysis that we published this summer, which showed that the most vulnerable in our society had benefited the most from our support.

Photo of Stephen Timms Stephen Timms Chair, Work and Pensions Committee, Chair, Work and Pensions Committee

On universal credit, the Chancellor rightly, at the start of the pandemic, suspended the minimum income floor in universal credit to avoid an unnecessary barrier to new self-employment. Given his welcome announcements today, will he extend the duration of that suspension beyond the middle of November, when it is currently due to end?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

Decisions on the exact operation of our welfare system are for the Secretary of State for Work and Pensions, but I will happily reflect on the point that the right hon. Gentleman makes. He is right that that has made a significant difference in the early stage of this crisis, but as we go through it, we will make sure that we adjust and tailor our support to match the needs of the moment.

Photo of Christine Jardine Christine Jardine Liberal Democrat Spokesperson (International Trade), Liberal Democrat Spokesperson (Exiting the European Union), Liberal Democrat Spokesperson (Treasury)

I hope that you can hear me this time, Madam Deputy Speaker.

I thank the Chancellor for early sight of his statement, which I cautiously welcome, to the extent that he has listened to calls from Liberal Democrats to extend furlough and create some flexibility based on the German Kurzarbeit model, but what about the 3 million people who have had no support for six months and will still be excluded from financial help? Where are the job creation plans to tackle unemployment and for those who cannot work for a third of the time? Where are the incentives for manufacturing and industry to invest in this country and create new jobs—the green revolution—allowing us to compete with our European neighbours, who are already moving ahead of us?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

In terms of ensuring that we are winners in the green industrial revolution, I point the hon. Lady to measures that we already announced in the Budget to provide significant support for initiatives such as carbon capture and storage and the construction of a charging infrastructure fund, to build more charging points across the United Kingdom. Such measures will make an enormous difference, on top of our commitment to double our research and development spending over the next few years, ensuring that businesses across the UK can play a leading role in driving our progress towards meeting our climate targets and creating new jobs in the process.

Photo of Nickie Aiken Nickie Aiken Conservative, Cities of London and Westminster

I warmly welcome the Chancellor’s statement, particularly the extension of the 5% VAT rate to next March. I know that many of the hospitality businesses in my constituency will welcome that as they grapple with the loss of tourists and office workers. Many are reporting that trading is at 20% of normal levels. Will he agree to meet me and representatives of theatres and the hospitality and retail sectors to discuss what further measures we can take to support the west end’s recovery?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

My hon. Friend is right. I know that she has spent a lot of time focused on this issue, and businesses in her constituency are facing an especially hard time. I would be delighted to meet her and them to see what more we can do to support them.

Photo of Chris Bryant Chris Bryant Chair, Committee on Standards, Chair, Committee on Standards, Chair, Committee of Privileges, Chair, Committee of Privileges

I used to be a curate, so I recognise a curate’s egg when I see one. This is good, but only in parts. The truth is that lots of people’s jobs are only unviable because of the virus and Government restrictions—I am not attacking the Government for that, but that is the simple truth. We therefore have a moral duty to try to help those people to survive, with proper livelihoods into the future. That especially applies to the aviation industry and the hospitality industry in my patch. I hope that the Chancellor will be able to say something more about specific grants, not just loans, for businesses that are sorely affected.

The Chancellor still has not answered the question about the 3 million people who got nothing earlier this year. Perhaps there was something hidden in what he said about the self-employed that means more people will get support this time, but he must have had constituents contact him, as I have. Finally, I wrote to him on 23 February—214 days ago—about the massive flooding in south Wales. He has not yet replied. A tip has fallen into the river. Can he visit the Rhondda and see the problems that we have? We really need financial support. The Prime Minister has promised that an answer is coming quickly, but we have still not had it—or the Chancellor could just send a cheque.

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

I apologise to the hon. Gentleman; I will find his correspondence as soon as I can and get him the reply that he deserves. I do not think I disagree with him. It is right that we focus our support on viable jobs. Those jobs are, in part, not viable because of the restrictions. The balance that we have to get right is in understanding that we will be dealing with this virus for a while to come—it is not here and then gone. That changes what our support should do. We have to focus it on those with a genuine prospect of employment, and I think the job support scheme gets that balance right. It is generous and flexible. With regard to hospitality, which is important to his constituency, I know that the industry will warmly welcome the extension of the VAT cut into the spring.

Photo of Lucy Allan Lucy Allan Conservative, Telford

The Chancellor has shown himself to be nimble and agile throughout this crisis. I congratulate him on his statement and his recognition that we must adapt and evolve and can no longer put our lives on hold. I particularly welcome the measures to support hospitality and the 5% VAT rate extension. The fantastic Telford International Centre for businesses and conferences brings in 300,000 people every year, but its turnover is now zero. Will he continue to do all he can to support the events industry, which is so important to my town?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

I thank my hon. Friend for her comments, and she is right: the Government must respond with agility as the virus and our economy evolve over the coming weeks and months, and we will continue to do that. I very much sympathise with her and those in the events industry, given the difficulties they are experiencing. I know that conversations are ongoing with the Business Secretary about what can be done to best ensure that, at some point in the future, we can return to what we all want, which is the thriving industry her constituency wants to see.

Photo of Ben Lake Ben Lake Shadow PC Spokesperson (Treasury), Shadow PC Spokesperson (Environment, Food and Rural Affairs), Shadow PC Spokesperson (Education), Shadow PC Spokesperson (Digital, Culture, Media & Sport), Shadow PC Spokesperson (Health and Social Care), Shadow PC Spokesperson (Housing, Communities & Local Government), Shadow PC Spokesperson (The Constitution and Welsh Affairs)

The Chancellor mentioned that the existing self-employed support grant will be extended on similar terms and conditions to the new jobs support scheme, but can he tell the self-employed in rural areas such as Ceredigion, who represent almost 30% of the workforce, whether he has changed the terms and conditions in such a way as to ensure that those who have been excluded from support so far will now get the help they deserve?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

The eligibility conditions will remain as they are, with refinements to make sure that businesses are still trading over the winter and to recognise that they have suffered and are suffering an impact on revenues through coronavirus. The reasons for those eligibility criteria are well documented and have been discussed in this House many times, so I will not recap exactly why they are there, but it is worth bearing in mind that the extension of this support means that we have provided more support to 2.5 million self-employed people, which is considerably more than any other country has and for a longer duration.

Photo of Andrew Jones Andrew Jones Chair, European Statutory Instruments Committee, Chair, European Statutory Instruments Committee

I welcome the significant and wide-ranging package that my right hon. Friend has introduced, and I want to focus on one element of it, cash flow, which is always a critical issue for businesses. Bounce back loans have been used by over 1 million companies across the UK, including 1,794 in Harrogate and Knaresborough, which have taken out loans worth more than £51 million. I therefore welcome the new pay as you grow scheme, which means that businesses will now enjoy greater flexibility to repay their loans over a longer period. Does my right hon. Friend agree that that will be of great value to businesses and that extending the terms to 10 years will halve the average monthly repayments?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

My hon. Friend knows from his own business career the importance of cash flow, and he is absolutely right. He mentioned the almost 2,000 businesses in his constituency; on average, they probably took a bounce back loan of about £30,000. This extension to 10 years will reduce the average monthly repayment from something over £500 to just around £300, which will provide thousands of pounds of cash-flow relief to his 1,800 businesses, but also to 1 million others around the United Kingdom.

Photo of Gerald Jones Gerald Jones Shadow Minister (Wales)

As we have heard, around 3 million people across the country were excluded from support during the first stage of the pandemic. Yesterday I was contacted by a wedding photographer in my constituency who is struggling to pay his mortgage and feed his family, and the prospect of many more months of uncertainty is terrifying for him and many others in similar industries and sectors, such as event planning, that are unable to operate in anything like normality at the moment. What assurances can the Chancellor offer that the measures he has announced today will not continue to exclude people such as my constituent and many more across the country?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

The hon. Gentleman mentioned mortgages, and I am sure his constituent, like many others, will have benefited from the mortgage holidays that we put in place, which my hon. Friend the Economic Secretary helped to organise with the banking system. Those provided six months of mortgage holidays for people, and, indeed, one in six mortgages across the UK was able to benefit from that generous scheme.

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Conservative, Chesham and Amersham

May I also congratulate the Chancellor on today’s groundbreaking announcements and particularly on focusing support on viable jobs and ensuring that support goes where it is most needed? The extended guarantee on CBILS, as well as pay as you grow and the measures on VAT, will be warmly welcomed by individuals and businesses in Chesham and Amersham. However, does my right hon. Friend remember the Micawber principle:

“Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

What can he say to my constituents who ask how we are going to pay this enormous bill, and how can he ensure that we provide value for money for the taxpayer?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

My right hon. Friend is absolutely right and I am grateful to her for her instruction on the fiscal maths that we are grappling with! As we move our way through this crisis, the nature of our response has to change. It is simply not sustainable or affordable to continue to provide the level of support that we gave at the beginning of this crisis. That is why our support is now targeted and focused on where it can make the most difference. That will mean that we cannot do absolutely everything that everybody needs at once, but we will be able to focus it on where it can make the most difference, so that, as quickly as possible, we can get our economy growing again and ensure that the maths my right hon. Friend outlined starts to work in our favour. We cannot borrow at this level forever. We must get our borrowing back under control and eventually get our debt falling again.

Photo of Janet Daby Janet Daby Shadow Minister (Equalities Office) (Faiths, Women and Equalities)

I welcome the Chancellor’s statement. Almost 700,000 people lost their jobs between March and July. What is the Government doing to support these people, because the use of food banks has in some cases tripled? What will the Government do to support those who will lose their jobs in the months to come, to help them during any period of unemployment, and to get them back into work as quickly as possible?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

The hon. Lady is absolutely right: it is a tragedy that 700,000 people have already lost their jobs and many more will. Our focus should be, and is, on finding fresh, new opportunities to provide them with the security that they and their families so desperately need. That is why we have provided incentives for companies to take on new staff through our apprenticeship scheme. We have also provided incredibly intensive support through the Department for Work and Pensions, through a doubling of the number of work coaches and greater wraparound support to help all of those people mentioned to plot their course and chart a better future for themselves.

Photo of Nicola Richards Nicola Richards Conservative, West Bromwich East

The new jobs support scheme rightly focuses on protecting employment and preserving viable jobs during a period of depressed demand. Businesses and workers in West Bromwich East will be extremely grateful for that. Does the Chancellor agree that it is also fair that the scheme targets those businesses that need it most, and will he set out how the scheme is deliberately targeted in that way? Will he also join me in visiting the incredible Red Lion Desi pub, to hear how it has benefited from the eat out to help out scheme?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

My hon. Friend is absolutely right about the nature of our support at this phase in our recovery. In a couple of different ways, this support has evolved in the way she said. It is targeted at those larger businesses that really need it, whose revenue has declined, and it is targeted specifically at protecting and supporting viable jobs—those jobs where there is work to do but the company is facing a period of repressed demand. This is a scheme that will make an enormous difference to those people, but in a targeted and effective way.

Photo of Neil Gray Neil Gray Shadow SNP Spokesperson (Work and Pensions)

From talking in July about “nobody left behind”, to accepting today that so-called “unviable jobs” will be lost, the Chancellor has failed to live up to his own rhetoric. The viability of these jobs is in large part dependent on entirely necessary Government restrictions, and it is disappointing that he continues to abandon the 3 million excluded from support. Given that he now accepts further widespread job losses, why has he not made permanent the temporary £20 per week universal credit uplift and expanded it to legacy benefits?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

The temporary increase in universal credit already lasts all the way through to the end of March next year. For those who are most vulnerable, as I have said previously, we have provided significant enhanced support through the welfare system, including almost £1 billion of extra investment in local housing allowance, to help with private rent payments, and a hardship fund, to help people who are struggling to pay their council tax bills. As our analysis showed in the summer, the interventions that this Conservative Government have made over the past several months have made the most difference to those on the lowest incomes.

Photo of Sajid Javid Sajid Javid Conservative, Bromsgrove

I know what it is like to have to postpone a much anticipated Budget, but I am pleased to see that it has not prevented my right hon. Friend from doing whatever it takes to protect the economy. Since the onset of this crisis, he has shown the decisiveness, resilience and creativity that the country needs right now, and I commend him for it. I know that he values infrastructure investment and knows that it is going to form an important part of our recovery, so may I urge him to publish the national infrastructure strategy, which has been delayed time and again, as soon as he possibly can, so that we can get on with levelling up across our great country?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

I thank my right hon. Friend, who is a very good friend of mine, for his warm comments. Whatever I have been able to do over the past several months is in no small part thanks to the instruction that he has given me when he was my boss in not one, but two different Department jobs. He is absolutely right about the importance of infrastructure investment, and he was one of the first people to talk passionately about the need to increase significantly the amount of money that the Government invest in the UK’s infrastructure. It was he, as Chancellor, who put in place the infrastructure revolution, and I can commit to him that I will absolutely deliver on that. He is right that we must publish the national infrastructure strategy; we will do so this autumn.

Photo of Rosie Winterton Rosie Winterton Deputy Speaker (First Deputy Chairman of Ways and Means)

In order to allow the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I am suspending the House for three minutes.

Sitting suspended.