Covid-19: Recovery Strategies - Motion to Take Note

Part of the debate – in the House of Lords at 3:04 pm on 11th June 2020.

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Photo of Baroness Penn Baroness Penn Baroness in Waiting (HM Household) (Whip) 3:04 pm, 11th June 2020

My Lords, I thank noble Lords for their words of welcome. My first appearance at the virtual Dispatch Box was to answer a Question from the noble Baroness, Lady Bennett, on building a fair, clean and more sustainable recovery. It is therefore a particular pleasure that I am able to respond to a full debate on such an important subject. I add my words of congratulation to the noble Baroness, Lady Hayman, on securing it.

That I can respond from a physical rather than a virtual Dispatch Box, albeit one protected by a wipe-down plastic box, is a sign of the small steps that we have been able to take to ease social distancing measures and begin the process of carefully reopening our country and our economy. There is, of course, a huge distance still to travel. As we do so, I agree with the noble Lord, Lord Oates, that we cannot simply seek to go back to business as usual, but should take the opportunities from some of the very difficult and disruptive changes that this virus has brought about to do things differently —to build a recovery strategy that will contribute to a fairer, cleaner and more sustainable economy.

The first step towards doing so has been to put in place measures to protect people’s livelihoods and the economy while we have taken measures to control the virus. As the noble Baroness, Lady Hayman, has noted, it is precisely because this disease is not a great leveller, but instead affects some of the most disadvantaged in our society in the most profound ways, that the scale of government action has been so great. Under the Coronavirus Job Retention Scheme, £19.6 billion has been claimed by businesses to support 8.9 million furloughed jobs. Some 2.6 million people have made claims for a total of £7.5 billion under the self-employment scheme, and over 780,000 bounceback loans have been approved, worth over £23 billion. Nearly 2 million people have been granted mortgage holidays. The Government have increased the value of universal credit and the local housing allowance, and provided £3 million for accommodation for rough sleepers. Importantly, we are now translating that into funding for over 3,300 homes, to make that transition off the streets permanent.

As the noble Baroness, Lady Hayman, noted, it is not just the scale of the action that has been unprecedented but the speed at which these programmes have been set up and able to put money into people’s pockets. At a human level, it has provided a layer of security for people at a very difficult and uncertain time. Economically, it has been essential to efforts to reduce the long-term impact of this pandemic and minimise the chances of future economic scarring. I reassure the noble Lord, Lord Forsyth, that we are not complacent about those prospects; we will not be able to protect every job or business, but we know that the costs of inaction would be far greater.

We also know that, as we turn our thoughts from immediate protections to rebuilding our economy, we must focus our energies on ensuring that it is one in which everybody has the opportunity to thrive, while driving clean and sustainable growth across all regions of the UK. Noble Lords will know that, last year, we became the first country to legislate to end our contribution to climate change by 2050. We remain more committed than ever to that goal, and, next November, the UK will host the 26th Conference of the Parties to the UN Framework Convention on Climate Change, in Glasgow.

This year’s spring Budget reinforced the UK’s strong track record in this area. Announcements included £460 million for tree-planting and peatland restoration, over £1 billion of further support for ultra-low emission vehicles, at least doubling funding for energy innovation, and tax measures to encourage greater energy efficiency and reduce plastic waste. We have already committed £2 billion for cycling and walking over the course of this Parliament, to support our ambition to encourage more people to opt for these greener modes of transport.

This week, we held our first recovery round tables, bringing together businesses, business representative groups and leading academics to consider measures to support economic recovery and ensure that we have the right skills and opportunities in place for our workforce over the next 18 months. These round tables cover five key themes, including ensuring a green recovery, capturing economic growth opportunities from the shift to net-zero carbon emissions, increasing opportunity and levelling up economic performance across the UK through skills and apprenticeships.

I should now like to turn to some of the specific points made by noble Lords. As the noble Baroness, Lady Hayman, set out very well, the challenge before us is to restart the economy but without returning to the previous levels of carbon emissions. We must put a green recovery at the heart of government and I reassure noble Lords that climate change plays a central role in government decision-making. We have already legislated to end our contribution to global warming by 2050 and a number of government measures embed that approach. Under the Climate Change Act, the UK is the first country to set legally binding carbon budgets that limit the total amount of greenhouse gases emitted over a five-year period. We have the Green Book guidance for evaluating and appraising the policies of the Budget and the spending review. They account for the cost of extra carbon emissions as well as the wider social costs and benefits of a project. We are reviewing that Green Book and the process for allocating spending to ensure that all the regions and nations of the UK have the opportunity to spread and drive growth.

We will seek to take action across all sectors of our economy, and a number of noble Lords raised the energy sector. Renewable electricity generation has more than quadrupled since 2010. It now gives us 38.9% of our total electricity and for the first time exceeds the share of generation from gas. Using research and innovation to reduce the costs of meeting net zero will be essential and will put the UK at the forefront of the new technologies needed to decarbonise the economy. The Spring Budget therefore committed to at least doubling the size of the Energy Innovation Programme. We will also create a carbon capture and storage infrastructure fund to establish this technology in at least two sites by 2030.

The noble Lord, Lord Risby, and the noble Baroness, Lady Walmsley, talked about heating, which accounts for 18% of our emissions. We will need to get that to virtually zero if we are to meet our climate change targets. To support this transition and future-proof our infrastructure, the Government committed in the Spring Budget to over £400 million of new funding for low-carbon heat pumps and heat networks and are consulting on improving standards in new homes.

A number of noble Lords raised transport. As I said, to encourage greener modes of transport, we have introduced a £250 million emergency active travel fund so that people can use cycle and walking routes while public transport is more difficult for them to use during this pandemic. This will encourage them not to return immediately to their cars. The Government have also committed to ambitious targets to increase zero-emission vehicles on the roads and are consulting on bringing forward the phasing out of the sale of new petrol and diesel cars from 2035 to 2040. On air quality, the Spring Budget allocated an additional £304 million to enable local authorities to take immediate steps to reduce nitrogen dioxide emissions, bringing the total funding to £880 million.

The noble Baroness, Lady Hayman, and the right reverend Prelate were right to say that we must embrace not only new technologies in transport but new ways of working, to reduce the demand for transport. To do that, we must recognise that the digital infrastructure is just as important as our physical infrastructure. The Government’s existing superfast broadband programme has shifted its focus to delivering gigabit-capable broadband and has already delivered full fibre to more than 370,000 premises.

On biodiversity, as promised in our manifesto, the Government will invest £640 million in England to plant more than 40 million trees and restore 35,000 hectares of peatland. The 2019 spending round included an extra £30 million for biodiversity measures, and the Government are providing up to £25 million of match funding to help communities to create and enhance wildlife-rich habitats through the Nature Recovery Network.

On climate finance, last year we launched the Government’s Green Finance Strategy, with an ambition to align private sector financial flows with clean, environmentally sustainable and resilient growth and to strengthen the competitiveness of the UK financial sector. We have also worked with the City of London to launch the Green Finance Institute to cement the UK’s position as a global hub for green finance.

As noble Lords have noted, we cannot meet this challenge on our own and, as I said, the UK is hosting COP 26 next year. In the run-up to November 2021, the UK as host will continue to work with all involved to increase our climate action, build resilience and lower emissions. The new date will also allow the UK and our Italian partners to harness our upcoming G7 and G20 presidencies to drive our climate ambitions. Last year, the Prime Minister committed to doubling the UK’s international climate finance to developing countries to turn the tide against climate change and species loss. The UK spend on climate finance over the past eight years has already helped 57 million people to cope with the effects of climate change. This ranges from support for poor farmers to grow climate-resilient crops to preserving water in areas facing an increased risk of drought, while investing in systems to help communities affected by extreme flooding and other effects of climate change.

A fair recovery will also require international efforts to tackle Covid. The IMF predicts that global GDP will fall by 3% in 2020, while GDP in emerging markets and developing economies will fall by 1%. This would be the worst recession since the great depression and much worse than the 2008 financial crisis. It is also predicted that sub-Saharan Africa will experience its first recession in 25 years, and DfID modelling suggests that an additional 70 million people could end up living in extreme poverty. That is why the UK has redoubled its efforts on the international response to Covid. We have committed over £700 million in ODA-eligible spending to the Covid response as well as reprogramming existing country spending to this effort. We are the leading contributor in the G20 towards global efforts to produce a vaccine. Perhaps I may also reassure noble Lords that the sustainable development goals remain at the heart of our approach.

Moving on to the economy, we must also ensure that we build a fairer recovery at home. Noble Lords have raised the prospect of looming unemployment as the furlough scheme comes to an end. As my noble friend Lady Eaton said, green jobs will be essential to provide new opportunities for those affected and the Government are committed to working with local government on this. We also remain committed to bringing forward a devolution White Paper.

The noble Baroness, Lady Kramer, referred to the Taylor review and the forthcoming employment Bill. We are committed to bringing forward the reforms contained in that review. The noble and right reverend Lord, Lord Eames, spoke movingly about a new cadre of unpaid carers brought into being by Covid, while the noble Baronesses, Lady Crawley and Lady Burt, talked about the impact of the pandemic and the lockdown on mothers. I would like to reassure all noble Lords that the Government will keep the human face of recovery in the forefront of our minds, although I will have to disappoint the noble Baroness, Lady Bennett, and the noble Lord, Lord Razzall, on a universal basic income. I am just not able to make the promises that the noble Baroness asked for.

A number of noble Lords raised the tragic death of George Floyd in America and the protests that it has sparked here in the UK. They are not just about events abroad, but the racism and inequalities faced by black people here in this country. To build a fairer country, we must recognise that black lives matter. We must listen, engage, converse, reflect and, importantly, act. One of the tools that will help us to do so in government is the Race Disparity Audit. It shines a light on outcomes for different ethnicities. It is guided by the principle of “explain or change” and has already led to a programme of work by the DWP to tackle high unemployment rates in 20 hotspots; to taking forward the recommendations in the Timpson review of school exclusions; and to taking forward the recommendations in the Lammy review of the disproportionate treatment of and outcomes for black, Asian and minority ethnic individuals in the criminal justice system. However, I know that there is more to be done.

As the noble Baroness, Lady Sheehan, and others have pointed out, the Public Health England review into Covid has shown the disparity of its impact on different ethnicities and communities and, as a number of other noble Lords noted, the disparities in its economic impact too. The Public Health England review is an important piece of work, which sets out firm conclusions. We are taking its initial findings very seriously. As the review makes clear, there is more to do to understand these disparities and what we can do to close the gap. We are determined to address them, and that is why the Equalities Minister will be taking forward important work to build on this review, including considering what changes might be required to future policy and existing guidance, as well as how data collection and quality can be improved.

A number of noble Lords raised how the current social distancing measures have impacted on our economy and on particular sectors as we move out of the lockdown. Perhaps I may reassure noble Lords that the two-metre rule is kept under constant review, including by looking at evidence from other countries. At the same time, noble Lords have talked about the careful balance between protecting our economy and protecting our health. These two are not mutually exclusive. The lockdown has had a significant impact on the country’s health, and the recovery will be held back if we face a second peak in infections, so this is a careful balance and we will continue to be guided by the science.

The contributions to the debate have highlighted the link between the impact of the Covid pandemic and the climate crisis on young people and our next generation; if we are not able to address both of these, we will have failed in the question of intergenerational fairness. Those contributions have provided rich food for thought as the Government develop our recovery plan and ensure that we do not fail that test. I once again thank the noble Baroness, Lady Hayman, for securing this valuable debate.