To ask Her Majesty’s Government what plans they have to protect the prosperity and wellbeing of British citizens from the effects of the COVID-19 pandemic on (1) the United Kingdom’s gross domestic product, and (2) the global economy.
The Question was considered in a Virtual Proceeding via video call.
My Lords, the Covid-19 pandemic is the biggest threat this country has faced in decades and we know that people are worrying about their livelihoods, as well as their health. That is why the Government have announced unprecedented support for public services, workers and businesses. These measures include, but are not limited to, £14 billion for public services, the Coronavirus Job Retention Scheme and guaranteed loans for businesses that will help protect them against the emergency and ensure that our economy recovers quickly.
I thank the noble Baroness for her Answer. I quote from a Conservative Party press release of 16 September 2019:
“Strong … economic growth means more money for our public services.”
Our economic management has relied on growth for employment, pensions and health. We have an expectation of a very large fall in GDP as a result of coronavirus, and years of recovery. Will the Government be making plans along the lines of the German Government’s 2018 report on the precautionary post-growth approach?
The Government are putting in place measures to respond to this crisis to protect against the economic harm that is being done now so that we can bounce back quickly. That is exactly why we have put in place schemes such as the job retention scheme, so that we can protect people while we have to have social distancing measures in place and ensure that the economy bounces back afterwards.
In Eastbourne, where I live, we are looking at a very substantial level of unemployment due to the restrictions on the hospitality industry perhaps lasting for really quite a long time. Will the Government encourage communities such as ours around the country to come forward with their own plans for their renaissance and support them, rather than trying to create plans in the centre, or even at LEP level?
One thing that is unchanged in this crisis is the Government’s commitment to levelling up across the country. The Government fully acknowledge the importance of local plans in building our economic recovery once we are through this pandemic.
My Lords, after the 2008 global financial crisis, UK productivity fell from an annual average rate of 2% to just 0.3%, with full recovery happening only after 30 quarters. Can the Minister assure the House that the lessons of 2008 are being taken into account in dealing with today’s crisis? In particular, what assessment has been made of the longer-term impact on productivity, and therefore on essential funds for public services, of failing to protect the goods and services sector alongside the understandable employment subsidies to protect jobs?
I assure the noble Baroness that we will reflect on all lessons from the past in dealing with the current crisis, although we have never seen anything quite of its nature before. One of our focuses, through the job retention scheme and the loans available to businesses, is to protect and maintain our productive capacity so that we can bridge this crisis, come out the other end, and protect our nation’s productivity and growth.
My Lords, 60% of private sector workers in the UK were employed by SMEs, with more than half—some 9 million—in microbusinesses. Many SMEs are struggling to keep their businesses alive and workers on their books. We know that, if too many fall, this will scar the economy and slow recovery. The Chancellor’s announcement of the bounce-back loan scheme is welcome, but at what rate do the Government now expect loan finance to flow to SMEs, what is the expected impact on the number of businesses that will stop trading, and what further refinements to the current schemes targeted on SMEs are the Government reviewing?
As the noble Baroness said, we introduced bounce-back loans just this week. We are moving at pace to make sure that all the measures that we have announced are implemented. Because of that pace, we will of course always keep those measures under review to see how well they are working and that the support is getting where we want it to be. If further measures are needed, we will keep that under review as well.
My Lords, what is essential? Does the Minister agree that mental stability is vital for prosperity and well-being? If so, does she agree that gardening and the arts are essential for the mind, just as food is for the body, to keep this nation prosperous and sane and to save lives?
The Government are very conscious of the impact that this pandemic may be having on people’s mental health and well-being. That is something that we will take into account as we look at the social distancing measures that we have in place. I know that many arts organisations are undertaking a lot of innovative work to bring arts into people’s homes. With regard to garden centres, we are working closely with the Horticultural Trades Association to see what can be done as we look at the easing of these measures.
Black and minority ethnic youths are twice as likely to be unemployed as their white counterparts and 48% more likely to be on zero-hours contracts. What plans do the Government have to mitigate this already shocking data, which could get very much worse?