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Economy Update
05 November 2020
Lead MP
Rishi Sunak
Debate Type
Ministerial Statement
Tags
EconomyEmploymentBenefits & Welfare
Other Contributors: 41
At a Glance
Rishi Sunak raised concerns about economy update in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Government Statement
The Chancellor announced significant support to protect jobs and livelihoods in response to the Prime Minister's action plan to control coronavirus spread. The package includes an extended job retention scheme until March, more generous self-employment grants, cash grants for closed businesses up to £3,000 per month, a council fund of £1.6 billion, and measures to support mortgage payments and loans. Additionally, the Chancellor promised increased funding for devolved Administrations from £14 billion to £16 billion. This response aims to complement monetary policy actions by the Bank of England and provide stability during an uncertain economic period.
Naomi Campbell
Con
Bosworth
Question
The MP asks if there are any plans to support the retail sector further and to address issues of business rates with a discount scheme as suggested by the Local Government Association. She also inquires about ensuring that businesses retain staff after furlough ends.
Minister reply
The Chancellor responds, confirming that the Government will consider further supports for retail businesses. He mentions the importance of addressing both employment and financial stability, suggesting discussions with local authorities to refine existing measures like business rate discounts.
Ian Cawsey
Con
Dartford
Question
The MP asks about the impact of the third tier restrictions on small businesses that cannot fully open due to social distancing requirements and whether there will be a compensation scheme.
Minister reply
The Chancellor confirms plans for a support grant scheme for businesses affected by restrictions, detailing grants up to £3,000 per month. He emphasises the importance of flexibility in these schemes to address varying local needs effectively.
Stalybridge and Hyde
Question
The MP questions if there will be more support for self-employed individuals who have been excluded from previous schemes, mentioning specific examples like carers and independent workers.
Minister reply
The Chancellor acknowledges the importance of addressing exclusions in social security systems affecting self-employed individuals. He commits to reviewing and possibly expanding eligibility criteria for existing grants to include those who have been overlooked.
Anneliese Dodds
Lab Co-op
Oxford East
Question
Businesses and workers have been pleading for certainty from this Government. The national lockdown was announced on Saturday, many weeks after both SAGE and Labour called for a circuit breaker. The Chancellor can change his mind at the last minute, but businesses cannot.
Minister reply
I thank the hon. Lady for her questions. The claim that our action was too late is false because there is no perfect moment at which to enact measures that have far-reaching and damaging consequences for the people and businesses of our country. We should only enact such measures when it becomes truly unavoidable.
Mel Stride
Con
Central Devon
Question
The minutes of the SAGE meeting held on 21 September stated: 'Policy makers will need to consider analysis of economic impacts and the associated harms alongside this epidemiological assessment.' Will he confirm that the Treasury has worked on this analysis under the auspices of its chief economist? If they are accurate, will he confirm that the Treasury will release this analysis without delay?
Minister reply
My right hon. Friend will know that I replied to him and his Committee with the answers to his question. There does not exist a specific prediction or forecast but what we did provide was the context for the lockdown being imposed and the impact that the initial lockdown has already had.
Alison Thewliss
SNP
Glasgow Central
Question
Asked for confirmation that the furlough scheme will not be cut back to 60% and expressed concern over businesses being excluded from support schemes. Mentioned potential permanent VAT cuts, additional funding needs for Scotland, and requested clarity on longer-term funding plans.
Minister reply
Confirmed that the furlough scheme is a UK-wide scheme treating every citizen equally regardless of location. Announced an upfront guarantee of £8 billion for Scotland, representing an increase from previously agreed figures.
Liam Fox
Con
Beaconsfield
Question
Praised the strength of the Union and asked if my right hon. Friend will use his considerable energy to bring forward proposals based on sound conservative principles.
Minister reply
Agreed with the emphasis on free enterprise and innovation as drivers for recovery, affirming that such principles will be at the heart of everything done.
Wirral West
Question
Questioned why workers in the north were previously expected to cope with lower wages than those in southern regions under tier 3 restrictions and requested a guarantee that they would never be treated as second-class citizens.
Minister reply
Stated unequivocally that wage support schemes treat everyone equally across all regions of the UK, correcting any suggestion otherwise.
Harriett Baldwin
Con
West Worcestershire
Question
Quoted an IMF statement praising the UK’s economic response to coronavirus and asked if over the medium term we need to put UK public finances on a sustainable footing.
Minister reply
Agreed that sustaining public finances is crucial, emphasising the importance of fiscal support during weak periods while building resilience for future crises.
Pontypridd
Question
Expressed disappointment over insufficient funding and reiterated concerns about Welsh constituents impacted by flooding, calling for fair funding and a meeting to discuss these matters.
Minister reply
Acknowledged support provided through the furlough scheme and announced an additional £600 million in upfront funding guarantees for Barnett, encouraging discussion on its use with the Welsh Government.
Greg Smith
Con
Mid Buckinghamshire
Question
Welcomed measures to protect jobs and livelihoods and asked if my right hon. Friend agrees that the extended coronavirus job retention scheme will mitigate weaker economic activity.
Minister reply
Agreed on coordinated monetary and fiscal policy, citing support from the Bank of England for suppressing unemployment through interventions.
Christine Jardine
Lib Dem
Edinburgh West
Question
The Chancellor told us in his statement that people and businesses want to know what comes next and how long we plan to keep the scheme open and on what terms. He said that they want certainty. They certainly do, and that is why businesses and individuals in my constituency and across this country are so tired of this constant chop and change. Will the Chancellor admit that he has to extend the furlough scheme through to the summer, to June 2021, to give those businesses the certainty they need to plan?
Minister reply
We have provided that certainty through to the end of the spring, at the same time as saying that we will review the scheme in January to ensure that it is operating well and at that point review the employer contribution. Combined with all the other interventions we have made, I think that that provides the medium-term certainty that businesses need to plan through the winter and beyond.
Question
I am pretty awed, to be honest, by the incredible scale of the support that this Government are putting in place for the people of South Ribble and beyond. We have a massive recovery to undertake in jobs and employment, and this is absolutely vital. There is 2 billion quid being invested in kickstart to create opportunities for people leaving education. Does my right hon. Friend agree that prioritising help for those young workers, such as those leaving Runshaw College in Leyland, is the right thing to do and a key part of how we are going to recover?
Minister reply
My hon. Friend is absolutely right. It is young people who are most impacted economically by the crisis we are experiencing, and she is absolutely right that they should be at the heart of our thinking about the recovery. The kickstart scheme is at the centre of that, providing fully funded job placements for at-risk young people. Tens of thousands are starting their jobs in the coming days and weeks, and we look forward to those young people having a new springboard into a bright career in her constituency and elsewhere.
Jim Shannon
DUP
Strangford
Question
I thank the Chancellor for what he has said today. The equality for all the United Kingdom of Great Britain and Northern Ireland is good news. Whether we are in Edinburgh, Cardiff, London or Belfast, we are treated equally. In relation to the Northern Ireland Assembly, which has been in a circuit breaker for the past two weeks, the Chancellor has said that the help will go right through until March, but should it be needed beyond that, it will be important to have that in place. Can the Chancellor specifically tell me what support will be given to businesses that have recently been set up but are excluded from the financial support schemes and are under extreme pressure for their very survival? It is good to hear that the United Kingdom of Great Britain and Northern Ireland is being treated equally, but it is also good to have something for those small companies that have just been set up.
Minister reply
I can confirm that all our job schemes work on a UK-wide basis, treating everyone equally wherever they live, and that will continue always to be the case. I am also pleased to confirm today a £400 million increase in the up-front funding guarantee for Barnett consequentials for Northern Ireland, bringing the total to £2.8 billion, and I am sure that the Northern Ireland Executive can use that funding to support businesses in the way that the hon. Member describes.
Question
I thank my right hon. Friend for the support that we have received. In Aberconwy, 8,800 jobs have been protected through the job retention scheme. Across Wales, 82,000 self-employed people have also been supported. Indeed, across Scotland, Northern Ireland and the whole of Wales, there have been unprecedented levels of support through schemes, through Barnett consequentials and more throughout this pandemic. Will he confirm again that this House stands for the whole United Kingdom, that it is our shared markets and strong economy that make this level of support possible and that all parts of our Union will continue to receive the attention and support of our Government?
Minister reply
My hon. Friend puts it incredibly well. This is a crisis that has engulfed our entire United Kingdom, and we will get through it together as one United Kingdom. This Government will continue to support businesses and people, wherever they live.
Gerald Jones
Lab
Merthyr Tydfil and Aberdare
Question
Although I am disappointed that there was no mention of those who have been excluded so far, I welcome much of what the Chancellor has said, particularly in relation to the devolved nations. However, when I asked just two weeks ago for greater flexibility for the Welsh Government to support jobs during their fire break, that support was not forthcoming. Greater Manchester and other parts of the north of England received a similar response. I ask the Chancellor whether he and the Government realise that pitting areas of the UK against each other serves only to damage the integrity of the United Kingdom, and I urge him to recognise the need for equity across the Union.
Minister reply
There is equity across the Union. I thank the hon. Gentleman for welcoming the measures, but there is equity because everyone is treated exactly the same under these nationwide schemes. With regard to support in Wales, as I have said, £600 million more was announced today for the Welsh Government, bringing the total up to £5 billion of funding. Again, I am sure that the Welsh Government can use that money in the way that he suggests, which is to support businesses, if that is indeed what they want to do.
Question
May I add my name to the long list of people who, once again, are thanking my right hon. Friend for his unprecedented support, which will be a great source of comfort to the residents of Stoke-on-Trent North, Kidsgrove and Talke? May I raise the fact that there is not just a financial incentive through the kickstart scheme for the under-25s, but a financial incentive now for the over-25s in the form of apprenticeships, which will be a huge boost to the jobs and economic recovery of Stoke-on-Trent and Staffordshire. Does he agree that this type of scheme is exactly the way forward and that employers should be taking it up to ensure that we can reskill and retrain a workforce, who, in Stoke-on-Trent, are sadly largely low-skilled and therefore stuck, in some cases, in low-wage jobs?
Minister reply
My hon. Friend is absolutely right. For almost the first time, there is now a cash incentive for businesses to take on older apprentices, given the particular nature of the crisis that we face. I am glad that that will help to train and reskill people in his constituency. I hope that many of them will find their way to the world-beating ceramics industry that he champions so well, which I know will also be heartened by the extension of the furlough scheme today.
Stephen Doughty
Lab Co-op
Cardiff South and Penarth
Question
The Chancellor is right that the strength of our Union comes when we are working together, yet the reality of the delay in announcing the extended support for Wales meant that jobs were lost when all the Welsh Government were doing was following the evidence. The Chancellor had said that it was a strength to act in an agile and fast-moving way, and that is exactly what they were doing. He also described the extended restrictions as “the only viable option”. Will he now do the right thing, in the interests of the Union, in the interests of fairness and in the interests of equity, and backdate the extended support to 23 October and allow those who lost their jobs potentially to be rehired and then furloughed?
Minister reply
I thank the hon. Gentleman for his comments. What I can tell him is that the new CJRS date for eligibility will be 30 October, which means that those who were notified to HMRC at any point up to that time will be eligible to be furloughed under the new scheme and, indeed, those who were let go before the announcement of the plans in September can also be rehired and put back on the scheme. The details of that are in the guidance, which will be published imminently.
Question
I thank my right hon. Friend on behalf of the 1,900 self-employed people of Darlington who have benefited from the self-employed income scheme and who will welcome his announcement today, but may I urge him to ensure that this money gets out of the door as quickly as possible, particularly with Christmas just around the corner?
Minister reply
I can give my hon. Friend that assurance. Those are three-month grants for the self-employed. The system will open in November so that grants can be paid in December, in time for Christmas, as he says. As he knows, that builds on our significant support for the self-employed. More than 3 million people are eligible for that support, which is now worth more than £14 billion. Today’s announcement will mean an additional £7 billion of support to those people over the Christmas period.
Question
My constituent Douglas McCarthy has been running the bespoke travel business Travelyard for many years and has seen his livelihood completely evaporate. Despite the fact that he has been bringing folk home and providing a vital service in the community, he feels that his industry has been virtually ignored by the UK Government and the insurance sector, which is failing to pay out on his business interruption insurance. In addition to the uncertainty over UK Government support, my constituent has had to fulfil full refunds out of his own pocket with very little support. Will the Chancellor, or someone from his team, meet my constituent and me to hear the specific concerns on what can be done to support him and travel agents like him?
Minister reply
Travel agents’ businesses, coming under the retail category, will benefit from business grants in England, and that money has been Barnetted to Scotland, so the Scottish Government can choose to do something similar to support their travel agents. My hon. Friend the Economic Secretary has previously worked with the insurance industry and the Financial Conduct Authority to provide clarified and updated guidance on business interruption insurance.
Angela Eagle
Lab
Wallasey
Question
Will the Chancellor now admit that his premature wind-down of furlough, which he had scheduled to finish last weekend, in the middle of what many people expected to be a second wave, was actually a mistake? Will he admit that the virus does not conform to Treasury models or his own timetable for it to disappear? Will he continue to show flexibility? Will he confirm, for the avoidance of doubt, that if the current lockdown ends on 2 December, the furlough scheme will still be available to all those across the country, whatever tier of restrictions they are put back into?
Minister reply
I can give the hon. Lady that assurance. The CJRS has been extended to the end of March for all people in the United Kingdom, not dependent on the tiers. We will review in January whether it is appropriate at that point to ask employers to start making a contribution as the economy recovers. We will make that decision in January.
Peter Bone
Con
Wellingborough
Question
I thank the Chancellor for coming to the House again to update us on the current situation, and congratulate him on the enormous amount of help that has been given to the British people throughout this pandemic, but could he tell us how the country is going to pay for that support?
Minister reply
My hon. Friend asks an excellent question. In the short term, we are paying for this through extensive borrowing. This year our debt-to-GDP will rise to roughly 100%. We are also carrying a significant ongoing borrowing requirement as evident in the forecasts. That is not sustainable so we need to reduce structural deficit over time, in line with IMF recommendations, to stabilise public finances.
Caroline Lucas
Green
Brighton, Pavilion
Question
In reply to a question I asked the Chancellor back in September, he said that those excluded from the self-employed scheme earned more than £50,000 and were in the top 5% of all earners. Will he explain why he has deliberately left out so many people again when announcing this latest version of the self-employed scheme?
Minister reply
The hon. Lady talks about justice. We have spent over £14 billion to protect and support the self-employed, with over 3 million eligible for support. That is more substantial than anywhere else in the world. Today we announced an additional £7 billion potentially being paid out in December. One criterion for qualifying was earnings less than £50,000 because of less information about self-employed people.
Scott Benton
Con
Blackpool South
Question
I commend the Chancellor on his statement. The incredible £200 billion-worth of support this Government have already provided has protected thousands of jobs in Blackpool South, and I know that those businesses will warmly welcome the extension of the furlough scheme through to March. However, coastal communities such as my own face particular challenges in reliance on tourism in years ahead.
Minister reply
My hon. Friend is a fantastic champion for his local area and small businesses. Tourism and hospitality are important for his economy. I am also a champion of that industry, and I would be delighted to meet him and other colleagues.
Yvette Cooper
Lab
Pontefract, Castleford and Knottingley
Question
Only a week ago, the Government told West Yorkshire to go into tier 3. When we asked for full furlough scheme support because jobs were being stopped due to restrictions, the Chancellor said no. Why was it treated as second class?
Minister reply
I say to the right hon. Lady that all interventions apply on a UK-wide basis and treat people equally wherever they live. That is the case now and always will be.
Theresa Villiers
Con
South West Hampshire
Question
Like others, I am hugely grateful for this massive programme of support for jobs and livelihoods but it will all have to be paid for in the end. Will the Chancellor set out a plan to deal with the deficit?
Minister reply
My right hon. Friend is right. Given the uncertainty at the moment, particularly with economic forecasts, it is difficult to do that with precision. In a few weeks’ time we will have an updated set of forecasts from the OBR which will illustrate the future direction of the deficit and public finances.
Kate Hollern
Lab
Blackburn
Question
Businesses in Blackburn have been under additional restrictions since July. Despite agreeing to give Lancashire local authorities £30 million in business support, which is equivalent to about £20 per head, the Government are yet to provide a penny.
Minister reply
I am pleased to tell the hon. Lady that funding will be backdated for those areas experiencing heightened restrictions before the tiering system was introduced. Funding will be paid in cash to local authorities next week.
Steve Double
Con
St Austell and Newquay
Question
May I thank the Chancellor for his willingness to be flexible to respond to changing needs of our economy during this crisis, and for the grants that will be made available to businesses that are forced to close?
Minister reply
My hon. Friend is right that funding can be used at discretion of local authorities to support their local businesses and local economy over the winter period in a way that they see meets their exact circumstances.
John Nicolson
SNP
Paisley and Renfrewshire North
Question
We welcome the news that the Chancellor will keep the £20 universal credit uplift beyond next April, but is he aware that that will still leave people seeking work £1,000 per year worse off than they were 10 years ago?
Minister reply
I am not sure I entirely understood the question. The uplift in universal credit is temporary and will be in place until spring. More generally, to protect most vulnerable in our society, I point hon. Gentleman to data released over summer that shows suite of Government interventions means incomes of lowest income households have been protected the most.
Jason McCartney
Con
Colne Valley
Question
May I thank Chancellor for extending furlough scheme to March and for cash grants for hospitality and other businesses that have had to close across my constituency? Will he continue to look at what support he can give to freelancers, including musicians, and company directors?
Minister reply
My hon. Friend is a champion for his local brewing industry. Future of tax policy will be for Budgets. Self-employed people mentioned will benefit from increased generosity and timeliness of self-employment support grants we announced today.
David Linden
SNP
Glasgow East
Question
The livelihoods of many self-employed Glasgow taxi drivers have been devastated in recent months. Why will income support grant for self-employed people go through until January, not March like the furlough scheme?
Minister reply
Grant will be there for a second one. Fourth grant payable in spring has already been announced. Exact value of that will be determined in January at same time as we decide on future furlough employer contribution.
Ellie Reeves
Lab
Lewisham West and East Dulwich
Question
I welcome the extension of the furlough scheme, but the Government have had since March to fix gaps in the CJRS and self-employment income support scheme that have excluded over 3 million individuals. Will the Chancellor commit to fixing these gaps?
Minister reply
The hon. Lady refers to gaps, but some are deliberate policy decisions targeting those who need it most. The Government has provided business rates holidays, tax deferrals, bounce back loans, welfare system improvements, and housing allowance.
Question
Does the Chancellor agree that the increase of the third self-employed grant from 55% to 80%, on top of £13.7 billion support already provided, makes the package one of the most comprehensive in the world?
Minister reply
The right hon. Friend is correct; we have been able to step in and support over 3 million self-employed individuals comprehensively throughout this crisis.
Cat Smith
Lab
Lancaster and Wyre
Question
My constituent, Hannah, trades on the Lancaster charter market. Will outdoor market traders be considered differently for further assistance?
Minister reply
If Hannah is registered for business rates, she will be eligible for a business grant of up to £3,000 per month closed. Unregistered traders should receive support through local council discretionary funding.
Question
Will the Chancellor look at exclusions and definitions in the self-employed scheme and consider specific help for the private and corporate events sector?
Minister reply
I am happy to hear suggestions from my hon. Friend on improvements to technical language or drafting guidance.
Stephen Flynn
SNP
Aberdeen South
Question
Will the Chancellor confirm funding necessary to maintain the £20-per-week universal credit uplift beyond spring?
Minister reply
The Scottish Government have tools and levers at their disposal for such decisions.
Question
What steps are being taken to ensure that the engineering sector participates in the kickstart scheme?
Minister reply
I am happy to talk with my hon. Friend and any organisations he wants me to connect with to make sure the sector benefits from opportunities provided for companies.
Tonia Antoniazzi
Lab
Gower
Question
Why does the Chancellor suggest Welsh people should be grateful for equally distributed financial support?
Minister reply
This is a UK approach with universal schemes benefiting everyone equally, plus £5 billion in total for the Welsh Government to use as they wish.
Kieran Mullan
Con
Bexhill and Battle
Question
Does my right hon. Friend share pride that the IMF praised our response for holding down unemployment?
Minister reply
My hon. Friend is correct; protecting livelihoods has been at the heart of our approach, and we will continue to do so.
Andrew Bowie
Con
West Aberdeenshire and Kincardine
Question
Does my right hon. Friend agree that this demonstrates the strength of the Union in providing support around the country?
Minister reply
My hon. Friend is absolutely right; it is a demonstration of the strength of the Union.
Shadow Comment
Anneliese Dodds
Shadow Comment
The Shadow Chancellor criticised the delay in implementing measures, arguing that businesses and workers need certainty. She pointed out that Labour had earlier called for circuit breakers and better support schemes which were ignored until last-minute changes were made. Dodds questioned the lack of a comprehensive plan and highlighted issues with social security flaws affecting self-employed individuals. She also criticised delays in recognising needs across different regions, urging for quicker responses to prevent job losses.
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