Protection of Jobs and Businesses

I beg to move,

That this House calls for the Government to abandon its one-size-fits-all withdrawal of the Coronavirus Job Retention and Self-Employment Income Support Schemes, and instead offer targeted income support to businesses and self-employed people in those sectors of the economy that have been hardest hit by the virus and are most in need of continuing assistance, and in those areas of the country which have been placed under local restrictions due to rising rates of infection.

Our country is in the grip of a jobs crisis—a crisis that will intensify if the Conservative Government do not change course. Between April and June this year, the number of people in work fell by the largest amount in over a decade. By July, there were nearly three quarters of a million fewer employees on the payroll than there were just four months earlier. We know that these are extraordinary times. That is why Labour has acted as a constructive Opposition, working with the Government, businesses and trade unions to do all we can to save lives and livelihoods. But it is not enough for the Government now to say simply that this is an unprecedented crisis and that only so much can be done to mitigate the damage. In their amendment to this Opposition day motion, the Conservatives maintain that

“any deviation”—

I repeat, any—

“from this Government’s proposed plan will cause damage to the United Kingdom economy.”

Some humility, willingness to listen and flexibility is desperately required here.

Under this Government, the UK has suffered the highest number of excess deaths in Europe. It has experienced both the worst quarterly fall in GDP in Europe and the worst quarterly fall among all G7 nations. The evidence suggests that the number of job vacancies in the UK has fallen further than in any comparable economy and that it will take us many months to get back to pre-crisis levels.

Our people have suffered a double whammy: a health crisis coupled with a jobs crisis, both made worse, I regret to say, by the Government’s unwillingness to listen, learn and accept that they do not always know best. But there is still time to change course. Around 4 million people are still furloughed under the Government’s coronavirus job retention scheme. Another 2.7 million people have so far made claims under the self-employment income support scheme, the second and final phase of which has just opened. Many more people have not yet had any support from this Government at all and have fallen through the gaps between the various schemes.

The hon. Member is making a really powerful point. Does she agree that a huge injustice is being done to the self-employed, many of whom have gone for six months without any support whatsoever? These are our small business owners who take some of their salary in dividends for perfectly good reasons. Does she agree that the Government should take their fingers out of their ears and start listening to the self-employed?

I am grateful to the hon. Member for that intervention. I agree with her. We have repeatedly raised that issue with the Government. Repeatedly we have been told that the computer says no—that no response is possible. That does not appear to be the case given the evidence. There would be means to assess people’s previous income. If there is a concern around fraud, ultimately additional deterrents can be added to the system to prevent any such fraud.

Will my hon. Friend give way on that point?

I will give way, but I am aware that there are many, many speakers for this debate, so I wish not to do that too frequently.

I thank my hon. Friend for giving way. Given the importance of the aviation sector, which has been particularly hard hit, the likes of myself have been calling for an extension of the furlough scheme and a sector-specific deal. However, due to Government inaction and procrastination, thousands of individuals within my Slough constituency are now being made redundant, or are on the verge of being made redundant. Does my hon. Friend agree that it is now time for the Government to act before we lose those jobs for good?

I am very grateful to my hon. Friend for raising that point. The jobs crisis that we are talking about is particularly intense in many of those communities impacted by the withdrawal of support from industries critical for the future of our country. Of course, as he mentioned, we were promised a sector-specific deal for aviation. We have not received it. We have not had the Government sitting down with the sector to work through the different scenarios and how we can plan for the future in that case. And we are not seeing the targeted wage support in aviation or, indeed, in other industries critical for the economic future that we desperately need.

I will take one final intervention, given that it is from the Government Benches, but then I will make some progress.

I am grateful. On a sector-based approach, I think that, in an interview with The Guardian, the hon. Member said that such an approach would pose challenges. Has she yet published the solution to those challenges?

I fear that the hon. Member may have missed off the end of the sentence, which is that, while it poses challenges, ultimately that does not mean that those challenges should not be stepped up to—they should be faced up to by the Government. His Government have accepted the need for some targeted support for hospitality and retail with the grants. There is also the eat out to help out scheme. Yes, there will be boundary issues. We fully accept that, but, ultimately, to govern is to lead. It is to take difficult decisions. The Government trumpet the fact that they worked with industry, with trade unions and with other stakeholders in creating the furlough scheme. They need to do that again to work through these challenges and to create the targeted system of support that is needed.

Will the hon. Member give way?

I will make some progress, if the hon. Member will permit me. He may find the answers to his questions—any further ones—in what I am going on to say.

In addition to those groups of people who I have just mentioned, we know that there are many others who are concerned about their futures working in parts of the UK that are still subject to local restrictions, or that may be subject to additional restrictions in the future. We also have huge numbers of people, as we have just been discussing, who work in sectors that are still not back to business as usual, despite their critical importance for our economic future—whether we are talking about highly skilled manufacturing or the creative industries—yet the Chancellor is ploughing ahead with this one-size-fits-all withdrawal of the income support schemes, pulling the rug from under thousands of businesses and millions of workers all at the same time, irrespective of their situation. He is doing so without any analysis, it appears, of the impact of this withdrawal on unemployment levels and the enormous long-term costs of so many people being driven out of work.

One of the categories that comes under severe pressures, as the shadow Minister and others in this House will know, is local councils. Their staff have been furloughed and they are having to take them back but their budgets are squeezed. Does she support my plea that additional help must be given to those councils to protect and retain jobs, because people are operating as a skeleton staff for almost a standard level of service provision, and it is just not possible to deliver that?

I am grateful to the hon. Member for raising that point. The Government promised local authorities that they would meet their calls to back-fill not just the spending that they have incurred during this period but the income that was lost. What do we have instead? We have a resiling from that promise. That is problematic because of the huge impact it will have on employment in different areas—local authority employment can be a critical part of many economies—but it is also an enormous issue for the economic development in those areas, where ultimately the lack of local leadership will be a huge problem. The Government need to hold to their promise in that regard.

The shadow Chancellor says that she wants to extend the furlough scheme, but the key question is: how long for? The Chancellor said when he announced it that it would end in October. If it is October, the shadow Chancellor says it should be November; if it is November, then she says December. If she wants a sector-specific scheme, when does it end—at the end of the crisis, as some of her colleagues have said? Is that when the virus is eradicated? What is the solution?

With all due respect to the hon. Member, he may have missed what I said. We believe that the Government need to sit down and talk to exactly the stakeholders they trumpeted so much about working with when they created the furlough scheme, so that it can provide the system of support that is necessary to protect jobs and protect our economic capacity. As I have said time and again, we do not believe that a continuation of the furlough scheme precisely as it stands now is what is required. We need a targeted wage support scheme, which is exactly the approach being taken by huge numbers of other countries but which this Government are turning their face against.