Covid-19: Recovery Strategies - Motion to Take Note

Part of the debate – in the House of Lords at 2:55 pm on 11th June 2020.

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Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Digital, Culture, Media and Sport) 2:55 pm, 11th June 2020

My Lords, I join other noble Lords in congratulating the noble Baroness, Lady Hayman, on securing this debate, and thank her for her excellent speech, which put forward real policies backed by evidence that not only is it possible to achieve a fairer, cleaner and more sustainable economy but that it is the right thing to do.

This is the third debate on the economic recovery post-Covid-19 in the last three weeks, and I thank all concerned for their contributions. This third debate takes us into the strategies that could contribute to a fairer, cleaner, and more sustainable economy here and, as the noble Lords, Lord Duncan and Lord Hannay, reminded us, through our international co-operation to greater effect.

It has been an excellent and wide-ranging debate, even although individual contributions have been severely curtailed. As the noble Lord, Lord Forsyth, said, even taken together, we miss out when individual contributions to debates are so limited in time, and speaker numbers are so restricted. Your Lordships’ House has a lot to offer, and we should be heard.

On a fairer economy, my noble friend Lord Tunnicliffe suggested that we had to think about the economy in wider terms than just GDP, and I agree. The noble Baroness, Lady Hayman, mentioned the recent IFS review of inequalities, which argues persuasively that the Covid-19 pandemic has brought existing inequalities in our society to the fore. As the noble Lord, Lord Birt, and other noble Lords reminded us, it says that it also risks exacerbating them.

Among the risks the report identifies are, as the noble Lord, Lord Robathan, pointed out, a widening in wage and employment inequalities. In the short run, it is overwhelmingly the low earners who are in shut-down sectors, being furloughed and at risk of unemployment. In the longer run, as the right reverend Prelate the Bishop of Oxford said, more reliance on technology and working from home could favour the more highly educated at the expense of others.

There has been a widening in health inequalities. In the short run, the crisis appears to have widened even further the gap in death rates between better-off and less-affluent neighbourhoods.

There has been a widening in ethnic inequalities. Some minority ethnic groups, especially those of Pakistani or Bangladeshi origin, are much more likely than others to work in shut-down sectors. Black groups are disproportionately represented in key worker occupations and, sadly, have been contracting Covid-19 at far higher rates than the white majority.

There has been a widening in generational inequalities. As my noble friend Lord Blunkett said, those leaving school or university this year will enter the toughest labour market in more than a generation, and workers under 25 are twice as likely as those over 25 to work in locked-down sectors.

The noble Baroness, Lady Burt, mentioned a widening in gender inequalities. The additional childcare and housework, as people stay at home and schools and nurseries are closed, has inevitably fallen far more on mothers than on fathers. There must be a risk that this disproportionately inhibits work and career progression for mothers, when progress in closing the gender wage gap had already stalled.

There has also been a widening in educational inequalities. The report points out that private schools are almost twice as likely to be providing online teaching as the state schools attended by children from the fifth most deprived families. So there is a long way to go for a fairer economy.

A cleaner, more sustainable economy is also a challenge that we can no longer afford to ignore. Last week, almost 200 chief executives, from companies including HSBC, National Grid and BP, signed a letter to the Prime Minister, which said:

“Efforts to rescue and repair the economy in response to the current crisis can and should be aligned with the UK’s … target of net zero emissions by 2050 at the latest.”

As the CCC chairman, the noble Lord, Lord Deben, said in a recent letter to the Prime Minister, recovery from the Covid-19 pandemic means investing in new jobs, cleaner air and improved health. The actions needed to tackle climate change are central to rebuilding our economy. The Government must prioritise actions that reduce climate risks and avoid measures that lock in higher emissions. The Committee on Climate Change’s advice to the Government is that actions to recover from the pandemic, in all UK nations, should be based on six resilience principles, which are worth looking back at.

We should use climate investors to support recovery and jobs; these should be labour-intensive, spread across the UK and ready to roll out as part of a targeted and timely stimulus package. We should lead a shift towards positive long-term behaviours. The Government can lead the way by introducing new social norms that benefit well-being, improve productivity and reduce emissions—this goes back to the point about not relying so much on GDP. There should be strong policies to reduce the UK’s vulnerability to the destructive risks of climate change, and to avoid a disorderly transition to net-zero carbon. There will be more worldwide floods and other climate change difficulties, and we must prepare for them.

We should embed fairness as a core principle—this goes back to the earlier point about the fair economy. The benefits of acting on climate change must be shared widely, but the costs must not burden those who are least able to pay, or whose livelihoods are more at risk as the economy changes. As they kick-start the economy, the Government should avoid locking in higher emissions or increased vulnerability to climate change in the longer term. Support for carbon-intensive sectors should be contingent on their taking real and lasting action on climate change, and all new investments, whether supported by the Government or not, should be resilient to future climate risks. As the CCC chairman, the noble Lord, Lord Deben, said in a recent letter to the Prime Minister, the Government should use the funding that they are currently giving to companies to force behaviour changes in support of a greener economy.

Finally on this list, we should strengthen incentives to reduce emissions when looking at tax changes. This is a matter for the Government, and they must take it seriously. Revenue could be raised by setting or raising carbon prices for sectors of the economy which do not bear the full costs of emitting greenhouse gases. Global oil prices provide an opportunity to increase carbon taxes without hurting consumers at the present time.

If we want to build a fairer economy, we need to recognise that people are not affected equally by the Covid-19 pandemic, either in the immediate risk to health or in the negative social and economic consequences. In particular, some minority-ethnic groups, people in certain key worker occupations, and those in low-income jobs, are often at much greater risk, and of course these groups often overlap. Does the Minister agree that the immediate policy response should take steps to address these inequalities, and that we need to understand and mitigate the underlying systemic and institutional factors that can underpin them?

Today’s debate has come up with a huge range of ideas about what a green new deal would look like in practice. We should expect to see an army of workers planting trees, building wetlands around our countryside, retrofitting insulation of our existing housing stock and office buildings, working on new green technologies, and expanding the digital capacity of the country. This is all good stuff, but what about a scrappage scheme focused on switching private and public transport to electric vehicles, and, as others have suggested, local heating schemes and more, and more systemic, recycling approaches? Taken together, such a package could provide people—particularly those entering the labour force this year—with much-needed job security after a period of turmoil, and benefit everyone’s financial security through lower energy bills.

As the noble Baroness, Lady Hayman, said, possibly the most important task must be for the Government to stop the piecemeal, incoherent approach that we have seen in policy-making in this area so far. Can the Minister confirm that this is on her agenda? At heart, this boils down to the Government coming up with a fair green rescue plan to drive up demand and reduce business uncertainty in the long term—a strategy which focuses on creating a fair society with good employment derived from sustainable investment and cleaner growth.