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My Lords, we must accept that the coronavirus will have a very significant adverse impact on our economy. The Office for Budget Responsibility reference scenario assumes that the unemployment rate will rise to 10% in the second quarter of 2020. However, the Government have announced unprecedented support for public services, workers and business to help mitigate the impact of the current economic emergency. As the OBR said,
“the cost of inaction would ultimately have been … higher.”
I thank my noble friend for his Answer. Sadly, we will hear of many redundancies in the coming weeks and months. Can I ask Her Majesty’s Government to be bold in initiating a range of green infrastructure projects that will provide much-needed jobs as well as improving the nation’s quality of life?
My noble friend raises an important point. Certainly, a great deal of thinking is going on at the moment about how we can turbocharge investment in green energy. Indeed, our Budget for virus lockdown provided a plank for a lot of these initiatives.
My Lords, yesterday, the OECD said that the UK had experienced the worst economic impact in the G7 from the Covid-19 pandemic, which is on top of the fact that we are already seeing a surge in job losses. What targeted help can the Minister offer the hardest-hit sectors of the economy, such as hospitality and tourism which, when the furlough scheme comes to an end, will take longer to reopen and recover?
As the noble Lord will know, we have announced an unprecedented level of support across the economy which includes these particularly hard-hit areas. As he will also know, we announced yesterday that shops will be able to reopen next week as part of our gradual and phased reopening of the economy. The Government are meeting regularly with members of the entertainment and leisure sectors to look at all possible solutions to help them get back into business as quickly as possible.
My Lords, during this period of great instability for businesses, many self-employed people have received no help at all. Freelance musicians, cleaners, taxi drivers, hairdressers and millions more have seen their incomes evaporate. As we move forward to a staggered start to normality, will the Government put in place a bespoke system of support for the self-employed so that their businesses and jobs do not disappear as well?
The Government’s overarching priority is to reopen the economy as quickly as is safely possible. That is how the groups the noble Lord has referred to will be able to start earning their incomes again as quickly as they can. We have in place a suite of support mechanisms for all those who have been the hardest hit, including the groups listed by the noble Lord.
My Lords, some of the latest forecasts about the economy are extremely worrying, especially for younger people. Is it not the case that the best way to avoid levels of mass unemployment as we exit lockdown is through policies designed to promote enterprise and growth and to set businesses free? Does my noble friend agree that, in this respect, tax rises on business, tempting as that might be for some, would be absolutely fatal to recovery and employment right across the United Kingdom?
Of course we want to see businesses feeling confident in their approach to coming out of this crisis. However, I cannot give a commitment on behalf of the Chancellor on what the future tax structure will look like. These matters will have to be looked at in the light of how the economy responds over the next few months.
My Lords, the OECD has predicted that the level of unemployment in this country will reach 11.7% in the third quarter. Will the Minister and his colleagues work with the DWP to adjust the universal credit system and introduce active labour market policies that support unemployed people back into work effectively, as Sweden has shown most particularly? Many of those jobs could be green jobs; such policies could take the place of the sanctions regime in the universal credit system, which does little else other than punish people who are unable to find work.
As the noble Baroness will know, our furlough scheme has been one of the most generous in Europe, and the whole point of it is to protect productive capacity. We certainly hope that, over the next few months, its gradual withdrawal will give businesses time to adjust and come to terms with what the opportunities are for them to get back into business. We will certainly keep the mechanisms of universal credit under review. However, it is a far more flexible system than existed in the past.
My Lords, as my noble friend Lord Reid pointed out, the OECD said yesterday that Britain’s economy would suffer the worst damage from the Covid-19 pandemic of any G7 country. I do not think that the Minister gave my noble friend a specific answer to his question, so perhaps I may ask again what specifically targeted help he will be able to offer those in the hardest-hit sectors of the economy, which will take longer to reopen and recover.
As the noble Lord probably is aware, we have given significant support to areas such as entertainment in the form of grants and business rates relief. For those that missed out on rates relief, we brought in the additional £600 million facility for local authorities to support those businesses that were not in the business rates relief regime. We will continue to assess the situation and we have ensured that several of these types of businesses, such as garden centres, have reopened recently. Yesterday, we announced that zoos can reopen. As we come up with a formula for businesses to reopen safely, we will continue to do that.
My Lords, millions of people depend on work in businesses that could function well if we had the one-metre rule recommended by the World Health Organization and adopted by countries such as China, which have successfully repressed the coronavirus. We still have a two-metre rule, which makes many of those jobs impossible to do. How quickly will the Government come to a conclusion to change the distance to one metre, which medical advisers have made clear is a decision for Ministers, not simply a medical one?
The noble Lord makes a good point and I certainly expect the debate about the distance to carry on. I share his concern about seeing the distance reduced, because it would enable a lot more businesses to open. We will see what the outcome of that debate is over the next few days and weeks.
My Lords, on
The advice will be taken in the context of our overall economic recovery. Our first priorities have to be keeping this country safe and getting our businesses reopened, and it is only by having a healthy economy that we will be able to become heavily involved in the sustainable issues referred to by the noble Lord.
My Lords, can the Minister indicate what assessment the Government have made of the number of people who will lose their jobs as a direct result of the two-metre rule? If no such assessment has been made, how is it possible for the Government to credibly continue with this policy in the light of the World Health Organization’s advice that one metre is adequate?
My Lords, I think that the scientific evidence is relatively clear that the risk of transmission of the disease declines exponentially with the distance between people who are interacting with one another. The argument, of course, is about the level of risk that we are prepared to take—the shorter the distance, the greater the risk; it is relatively simple. However, I support my noble friend’s concerns and I hope that the debate will continue.