[Sir Edward Leigh in the Chair]

Part of the debate – in Westminster Hall at 3:38 pm on 10th November 2020.

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Photo of Pat McFadden Pat McFadden Shadow Economic Secretary (Treasury) 3:38 pm, 10th November 2020

Thank you for your chairmanship this afternoon, Sir Edward. I congratulate Elliot Colburn on tabling this debate and thank all Members who have contributed to a thoughtful and varied debate. I will not mention everyone, but I was particularly struck by some of the points made, for example, by my hon. Friend Holly Lynch who raised the difficult issue of local markets; my hon. Friend Emma Hardy who talked about family owned coach companies; Huw Merriman who talked about local shops; and my hon. Friend Florence Eshalomi on the issue of high rateable value properties in central London. The indefatigable hon. Member for Thirsk and Malton (Kevin Hollinrake) quite rightly described this period as a great acceleration; we do not have time today to explore that idea fully, but it is a crucial feature of the experience that we are going through. My hon. Friend Rachael Maskell talked about leaseholders and self-employed people. And of course our great friend Jim Shannon talked about the crucial wedding industry. I can tell him that in my part of the country—the Black Country—we have an enormous wedding industry, including an Asian wedding industry that is a huge business, and it has suffered all the knock-on effects that he talked about.

The covid pandemic has forced Governments around the world to make major and unprecedented interventions in the economy. In this country, those interventions have included some of the measures that we have heard about this afternoon: the furlough scheme; the grants to small businesses; state-guaranteed lending schemes; tax deferrals; and a lot more. These interventions have been large-scale; indeed, they have been on a larger scale than in previous recessions, because the experience is different to that of a normal recession. They have been necessary, although some people have been missed out by them, as we have heard.

To have stood back and simply let business and workers take the full hit from this pandemic would have caused economic carnage and long-term damage on a scale unseen in living memory: it simply would not have been a feasible option for the Government to choose. In many cases, the grants and other support for small businesses that have been provided have been the difference between survival and going under—there is no doubt about that. They have provided vital revenue to businesses when there has been none from normal trading, because there has simply been no possibility of conducting business.

Of course the interventions are costly, but stepping up in a once-in-a-century situation such as this is what government is for. I am old enough to remember the last time that we had real mass unemployment in this country, when I was growing up in the 1980s, and the social and economic consequences of that were felt for many years afterwards, in terms of the impact both on individual families and on areas such as the Black Country, part of which I represent, and many other parts of the country, too.

A lot of the interventions this time have enjoyed cross-party support. We called for the furlough scheme and we supported it. That was particularly true in the early days of the pandemic. But after that period, things have become both more disjointed and more contested, and there is a reason for that.

I think that we have had four different versions of an economic plan in the last six weeks, with different levels of business support, various percentages of support for self-employed people, and at one point the withdrawal and then the reinstatement of furlough over one weekend. Trying to keep track of all those changes reminded me of what was said about the legendary Celtic winger, Jimmy Johnstone, and his effect on defenders; it was said that he gave them “twisted blood”. It would give any small business person twisted blood trying to follow all the twists and turns of what has been announced in recent weeks, only for us to end up pretty much back where we started in March.

I make that point not to engage in a bit of political knockabout or to take a partisan swing; it is to make a more serious and deeper point, because I think the story of recent weeks betrays a deeper problem within the Government. We are led to believe that there has been a debate or a disagreement in Government between those who have championed public health on the one hand and those who have championed the opening up of the economy on the other. We might say it is a debate between hawks and doves, with the Chancellor portrayed in this debate as a hawk.

Any Chancellor will rightly be concerned with the state of the economy—that is their job—but the mistake in this situation, and the real point that I want to make today, is to regard it as a choice between getting the virus under control and getting the economy moving again. We should have learned by now that any economic plan that does not have at its forefront getting the virus under control will not work, because when infections, hospitalisations and death rates are increasing, by definition the economy cannot be opened up and cannot operate properly. It cannot simply be decided that we open up the economy, because it would by definition mean—when people cannot see their relatives and weddings and all sorts of gatherings cannot take place without resulting in a new outbreak of the virus after a few weeks—going into a period of opening up and lockdown, and opening up and lockdown, particularly when the testing and tracking system is not working properly.