Local Covid-19 Restrictions: Economic Support

Treasury – in the House of Commons on 20th October 2020.

Alert me about debates like this

Photo of Andrew Gwynne Andrew Gwynne Labour, Denton and Reddish

What plans he has to provide additional economic support to areas affected by local covid-19 restrictions; and if he will make a statement.

Photo of Emma Lewell-Buck Emma Lewell-Buck Labour, South Shields

What plans he has to provide additional economic support to areas affected by local covid-19 restrictions; and if he will make a statement.

Photo of Afzal Khan Afzal Khan Shadow Deputy Leader of the House of Commons

What plans he has to provide additional economic support to areas affected by local covid-19 restrictions; and if he will make a statement.

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

Earlier this month, I announced that businesses forced to close as a result of local restrictions will be eligible for a grant of up to £3,000 a month. Their employees will be protected through the expanded job support programme and councils will receive extra resources to help with local track and trace, enforcement and compliance.

Photo of Andrew Gwynne Andrew Gwynne Labour, Denton and Reddish

All that Greater Manchester is asking for is proper financial support for our businesses, our self-employed and our lowest paid after 12 weeks of failed lockdown measures and as we face many more uncertain months ahead. When the Prime Minister is reported as struggling to live on his £150,000 a year salary, how does he think the lowest paid in Greater Manchester will cope on two thirds of national minimum wage? Last night, the Secretary of State for Housing, Communities and Local Government offered just £22 million for a city region of 2.8 million people. That is less than the £25 million he granted to his own town centre. Why do this Government hate Greater Manchester?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

It is disappointing to hear the hon. Gentleman’s tone. It is obviously a very difficult time for many people in this country as we evolve our response to this virus, but what we need is people acting in a constructive spirit, and that is what my right hon. Friend the Communities Secretary is actively offering to do. I hope those conversations are happening as we speak.

Greater Manchester is being treated exactly the same as every part of our United Kingdom. These are national support schemes that have been put in place that help the most vulnerable in our society. The hon. Gentleman raised a number of questions. As he will know, there are national schemes to protect businesses, to protect employees and to provide support to his local authority.

Photo of Emma Lewell-Buck Emma Lewell-Buck Labour, South Shields

Repeated local lockdowns with no end in sight are killing our economy in South Shields. In the past lockdown, we received £26 million of support. I have been advised that the financial package offered to us this time, should we end up in tier 3, would be just over £1 million. Can the Chancellor confirm or deny that insulting amount?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

I am glad the hon. Lady recognises the economic damage that lockdowns do, which is why, when we had this debate last week, I did pose the question as to why the Opposition were suggesting a national lockdown with no end in sight without commenting on the damage that would do to people’s jobs and livelihoods. With respect to support for local authorities entering tier 3, as I have set out there is a national funding formula that provides a per capita amount to the local authority of up to £8 per head at the highest tier to provide support for local enforcement, compliance and track and trace. On top of that, there is support that the national Government provide for businesses that are closed. Their employees can be put on the job support scheme, and, in addition, my right hon. Friend the Communities Secretary can talk to local authorities about providing bespoke extra support as required.

Photo of Afzal Khan Afzal Khan Shadow Deputy Leader of the House of Commons

People and businesses in my constituency and across Greater Manchester are suffering. They are facing an uncertain winter with insufficient support. Last night, the Government offered just £22 million to the 2.8 million people in Greater Manchester. That comes to just £8 a head to support local people and businesses during the months ahead. Other areas were given double that amount, despite having just half the population. Does the Minister seriously believe this is a fair deal for Greater Manchester, and, if so, would he like to take this opportunity to apologise to those Mancunians who will lose or have already lost their livelihoods?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

With the greatest respect, the hon. Gentleman is mistaken in his characterisation of the support provided and confusing two different things. He is absolutely right: the support is £8 a head. That is the national funding formula that is provided to all local authorities entering tier 3. That is the same as is provided in Lancashire and indeed, in the Liverpool city region, and that is the amount that he refers to, which is done on an equitable basis for all local authorities. The additional amounts he talks about were reached in negotiation with my right hon. Friend the Communities Secretary and representatives of the Government. That offer remains available to Greater Manchester, and that is why I hope they engage in these negotiations constructively.

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

My right hon. Friend has done a great deal to support jobs in our country, but he will know that lockdowns destroy jobs and lead to increased mental illness and a smaller economy that for many years will be less able to look after our most vulnerable. Does he agree that the Government should come forward urgently with a comprehensive review of the impact of lockdowns, not just in terms of epidemiology and the effect on the NHS, important though that is, but in terms of the economy, businesses, jobs and the country’s social wellbeing?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

As ever, my right hon. Friend makes an excellent point. He is right about the damage to not only non-covid health outcomes but people’s jobs and livelihoods and the long-term damage that that will cause to all our health outcomes. With regard to projections, he will know that both the Office for Budget Responsibility and the International Monetary Fund project 3% scarring, which will mean our economy potentially being £70 billion to £80 billion smaller in the future than it otherwise would have been. As he rightly says, that will obviously have an impact on our ability to fund public services and protect people’s jobs and livelihoods.

Photo of Anneliese Dodds Anneliese Dodds Shadow Chancellor of the Exchequer

Last week, when the Prime Minister was asked whether a circuit breaker is likely, he said, “I rule out nothing”. Does the Chancellor rule it out—yes or no?

Photo of Anneliese Dodds Anneliese Dodds Shadow Chancellor of the Exchequer

That appears to be slightly different from the message we received from the Chancellor last week. This morning, a member of the Monetary Policy Committee stated that

“the bulk of spending reductions are due to restrictions that people voluntarily impose on themselves”,

and that

“higher virus prevalence is associated with weaker economic performance.”

Research suggests that not undertaking a circuit breaker now could cost our economy an additional £110 billion—that is based on IMF figures, by the way—due to changes in behaviour that people make to avoid contracting the virus and the knock-on impact of those on economic output. What is the Chancellor’s estimate of the cost of not undertaking a circuit breaker and continuing with this rolling programme of regional restrictions?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

The hon. Lady talks about rolling programmes. It is clear that the Labour party believes that we should have a rolling programme of national lockdowns. That would be enormously damaging for people’s jobs and livelihoods, causing unnecessary pain and suffering in parts of the country where virus prevalence is low. A localised approach is the best approach.

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

We are not in a significantly different public health position now from when the Chancellor announced furlough on 20 March. Pubs and restaurants and hospitality venues are being asked to close, but this time, he is leaving people with significantly less support. Will he take action today to extend the furlough scheme, to ensure that people are protected and that those who have lost out and been excluded from support can be included this time?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

We have announced the job support scheme, which will take effect on 1 November, following the closure of the coronavirus job retention scheme. Those who are working in closed businesses can be placed on that scheme and receive 67% of their wages—an amount comparable with all our European peers—at very little, if no, expense to the employer, helping them to protect those jobs.

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

Sixty-seven per cent. of wages for people who are on minimum wage jobs—the lowest paid in our society—is simply not good enough and gives them absolutely no incentive to self-isolate and stick to the rules. The Scottish Government have announced a grant of £500 for the lowest paid, but the UK Government may swipe that back and pick the pockets of the poorest in taxation. Will the Chancellor go further than he has so far and exempt that £500 grant to the poorest in our society from taxation?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

The hon. Lady talks about the Scottish Government introducing a £500 grant. It was the UK Government who introduced a £500 grant and provided Barnett funding for the Scottish Government to do the same. She is right that the grant payment is there to help those who are most vulnerable, so that they can isolate, and it provides an incentive for them to do so.