The Economy

I beg to move,

That this House has considered the economy.

It is a privilege to open this economic debate, and to do so hot on the heels of a statement from the Chancellor that places the Government’s plan for jobs at the heart of our recovery. The past few months have tested our economy in a way that few of us, if any, have experienced before. Never in our history have a Government ordered businesses across the country to close for an extended period, and never have a Government asked so many people to halt normal activity so completely. Shops closed, offices emptied and production lines juddered to a halt as millions worked from home.

From the onset of this pandemic, the Government worked to ensure that our frontline public services would get whatever funds they needed. To date, £49 billion has gone towards the NHS, local authorities and others working to protect us from the virus, but our public servants were not alone in that endeavour. The very fact that so many of working age were willing to stay at home, protect the NHS and save lives is a sign of the cohesion and compassion that still exists within our society.

If the Minister does not mind me being a bit cheeky, I want to ask about the money that we need in the Rhondda to deal with the floods earlier this year. Some £67 million is needed by my local authority. Half of a tip fell into the river, and £2.5 million is needed to take away the 60,000 tonnes and to make the tip safe for the future. It is vital that the Government recognise that the Coal Authority is a Westminster responsibility, and the money must be found so that we can make people’s homes safe.

When it comes to speaking up for his constituents, I do not think the hon. Gentleman has ever held back, whether or not he is being cheeky in doing so. He raises a very important point about the investment in flood prevention. That is why the Chancellor set out a number of measures as part of the infrastructure package, and I will come on to say more—[Interruption]—if he allows me to get into my speech, about how we are accelerating a number of projects with that in mind. Given the history of coal and some of the tragedies that have happened in the past in Wales, we are very cognisant of the need to take action on such schemes. Again, that is being looked at by the Secretary of State for Wales, and I have been in discussions with him about it.

Let me now make some early progress. The Government were clear that we would stand by those whose livelihoods were in jeopardy through no fault of their own. We said we would do whatever it takes to protect and preserve the businesses and jobs on which our national prosperity and resilience ultimately depend, and we meant it. The House will be familiar with the scale and scope of our economic response, which has included business rates reliefs and grants for the worst-hit sectors, uplifts in welfare support for families struggling to make ends meet, and more than £70 billion of business loans and guarantees approved to date. Meanwhile, the coronavirus job retention scheme and the self-employment income support scheme have preserved many millions of jobs and livelihoods across England, Scotland, Wales and Northern Ireland, demonstrating once again the shared strength and resilience we derive from our Union.

Will the Minister give way?

I know the hon. Gentleman is a passionate defender of the Union, and I give way on that point.

We are very much better together. The Minister and I know that, and everyone else in the House knows that as well, even my friends to my left.

One of the things that concern me is the aerospace sector, and the manufacturing base in particular. We have the possibility of losing 600 jobs at Bombardier in Northern Ireland and some 45 jobs at Magellan, which is a smaller contractor in my constituency. Within this process—and I thank the Government for all the moneys they have made available—will there be extra help for the aerospace sector, particularly for small firms and for the apprentices in those small firms?

As the hon. Gentleman knows, the Chancellor addressed that issue in his statement earlier. Indeed, he wrote to the industry in March setting out the terms on which Government support would be offered, including the requirement for firms first to look at what support they could receive from their own commercial backers and shareholders. On individual firms, what discussions take place is a matter of commercial confidentiality, but the Chancellor indicated both his engagement in that issue and that of the Secretary of State for Transport.

All in all, the United Kingdom’s economic response to covid is one of the most comprehensive and generous from any Government in the world. The past few months have been hard for everyone, particularly the many families whose loved ones have lost their lives. But thanks to our collective grit and determination, the tide was turned and the infection rates fell, and we are now in a position to reopen our economy in a way that is safe to do.

As one who thinks it is exactly right, as a one-off cost, to spend and cut taxes at the moment to promote economic recovery, I accept that we have to borrow to do that. When will we be getting some revised numbers on what the borrowing might amount to?

There are two issues within that. First, there are the revised numbers from the Office for Budget Responsibility, which has set a timescale for when it will produce them. Then there is the more substantive issue, which the Chancellor set out in his statement, of seeing the plan for jobs in the context of three phases. The medium-term recovery that we need will be set out in the autumn with the Budget and the comprehensive spending review. Again, that will be an important milestone in this three-phase approach.

Will the Minister give way?

I will make a little progress, and then I will happily give way to the hon. Lady.

These interventions have come at a considerable cost to the public finances, but I have no doubt that they were the right thing to do. The Bank of England, the OBR and other external forecasters have all emphasised that the cost to the economy would have been significantly higher had it not been for the swift and decisive action that the Government have taken. Nevertheless, the pandemic has caused a profound shock to both the national and the global economy, the consequences of which will be felt by businesses and individuals for some time to come. Even as we step out of lockdown, a great deal of disruption and uncertainty remains. Many businesses have yet to reopen their doors. Up and down the country, people are worried about whether their jobs will be secure when they return to work.

Bath is an international spa city, and the wellbeing and beauty industry is very much part of our local economy. Some industries have been worse hit than others and unfairly treated, particularly the beauty industry. When will there be an announcement that the beauty and wellbeing industry is open for business again?

The hon. Lady highlights an extremely important sector, not least in terms of its profile. Many women work in that sector, and often those incomes are extremely important to their households as well. At Treasury oral questions yesterday the Chancellor expressed our desire to get those sectors up and running as quickly as possible. The hon. Lady will know that we have already taken significant steps to support them, not least through the £10,000 and £25,000 grants that were offered, which included many within the sectors that she highlights.

Today the Government made it clear that we are ready to take further action as necessary, just as we have done throughout this crisis. That is why the self-employed income support scheme will open for a second and final round of grants between 17 August and 19 October. Likewise, the job-retention scheme has been extended until the end of October, with new, more flexible terms to support people back to work. But with the best will in the world, no Government can reasonably save every single job in these circumstances; nor can the furlough scheme, successful as it has been, last indefinitely.

Of course the Minister is right that the furlough scheme cannot continue forever. However—I listened to his response to the hon. Member for Bath (Wera Hobhouse) about the beauty sector—surely we need different approaches to the sectors that have been able to reopen and those that are currently still closed. Surely the sectors that are still unable to open, and potentially may not be able to open for quite some time, such as theatres, music venues and beauty therapists—a range of sectors—need something more flexible. Why has he not considered something more flexible with regard to the job retention scheme?

We have been flexible. The hon. Lady mentioned theatres: we announced a package of £1.57 billion-worth of support as part of the flexibility of which she speaks. People also seem to ignore the fact that we are only halfway through the furlough scheme. It runs until October—we are four months in. The intention, as part of this second phase, is to reopen the economy, including these businesses. As the Chancellor said, we do not think it is good for people to be away from the labour market for an extended period because skills atrophy, and that is not in their interests.

I will make a little progress and then of course come back to the hon. Lady.

Now is the time to move to the next step in our economic response. Later this autumn, the Government will deliver a Budget and spending review, but today we set out our plan for jobs. As the Chancellor said, this is not a time for ideology. We are driven by a belief in the nobility of work and the power of opportunity. Most of all, we are motivated by the desire to do what is right for the British people. Where jobs are at risk, we will work to protect them, and where jobs are needed, we will help to create them.

Will the Minister give way?