This Government’s comprehensive and generous package of support in response to the coronavirus has protected millions of livelihoods and supported hundreds of thousands of businesses up and down the country. Our plan for jobs announced in July will protect, create and support jobs, notably through our recently launched kickstart scheme, as we look to get the UK economy back on its feet.
Scottish Government analysis has revealed that ending the transition period in 2020 could cut £3 billion from the Scottish economy over the next two years—on top of the impact of coronavirus. With the UK Internal Market Bill making the risk of a no-deal Brexit even greater, what reassurances can the Chancellor give my constituents and the people of Scotland that there will be no real-terms spending cuts that would inflict even greater damage on our economy?
The Government and I remain committed to getting a deal, and will continue to engage constructively with our European partners in pursuit of that aim. With regard to funding for Scotland, I can tell the hon. Lady that the Scottish Government have received £6.5 billion in advance of its being called for, so that they can provide the support required by their residents.
Innovation has been at the heart of the story of the Black Country for over 150 years, and nowhere is that more true than in companies such as Thomas Dudley in Tipton in my constituency and Stephens Plastic Mouldings in Oldbury. Given that these are the types of businesses that will help us as we come out of the pandemic, what work is my right hon. Friend doing with manufacturers and exporters in the Black Country, and with local stakeholders such as the West Midlands Combined Authority and West Midlands Mayor Andy Street, to ensure that they have the support they need to thrive and survive post pandemic?
My hon. Friend is absolutely right. Manufacturing and exports, especially from the west midlands and the Black Country, will play a key part in driving our recovery. I am pleased to tell him that the Exchequer Secretary will shortly be meeting the Mayor, Andy Street. That comes on top of our plans to provide £1 billion to develop the UK supply chain for electric automotive vehicles over the next five years, and £850 million of allocations from the local growth fund for his region.
The Chancellor will be aware of concerns that the UK risks a slower recovery than comparable economies for self-inflicted reasons. Despite the devastating impact on jobs, the Treasury Front Benchers have yet again today—six times—rejected targeted wage support. Economists are concerned about the Government’s inability to get a grip on the public health crisis, which evidence from the Scientific Advisory Group for Emergencies suggests stems in part from a failure to adequately support people who have to self-isolate. Rumour has it that the Chancellor is blocking attempts to improve sick pay, so I put it to him: can he put himself in the shoes of those low-paid workers who often have to choose between paying their rent and bills, and putting food on the table for their kids? If those workers are advised to self-isolate, they get £95.85 a week—and that is if they are even eligible for statutory sick pay. Surely the Chancellor must agree with the Secretary of State for Health and Social Care that statutory sick pay is not enough to live on.
From the beginning of this pandemic, we have made changes to the operation of statutory sick pay and our welfare system to ensure that those who are isolating in any circumstance receive support from day one, and that we improve flexibility, particularly for the self-employed, through the removal of the minimum income floor. As the hon. Lady knows, we are also trialling incentive payments in local lockdown areas.
I did not ask the Chancellor about the precise details of delivery and I did not ask about the scope; I asked him about the value of statutory sick pay. He needs to get a grip on this issue. If he fails to do so—and the blockage appears to be his responsibility—then we will see additional localised reimpositions of lockdown, with all the implications that that has for jobs and businesses. Please, Chancellor, get a grip on this issue.
There are two other reasons why economists are worried about the UK’s recovery. First, of course, there is concern about our future as a trading nation. Both the Chancellor’s predecessors have warned that the threat to override the withdrawal agreement could damage our country’s reputation and prosperity. Why do those former Chancellors appear to be more concerned about our country’s economic prospects than the current one? The second reason for concern stems from the prospect of premature spending cuts or tax rises. According to the Financial Times, it is politics that could drive the Chancellor towards early tax rises, so will he rule them out for the rest of this year?
The hon. Lady talks about our place as a trading nation. She may have missed the news last week that this country has concluded an enhanced free trade agreement with Japan. I pay enormous tribute to my right hon. Friend the Secretary of State for International Trade for concluding a deal that will be better for British businesses, particularly in the areas of the economy in which we do so well, such as digital and services. It will protect more of our great agricultural produce, open up more markets for our businesses to sell to, and reduce prices for British shoppers. That is what the future of global Britain looks like.
I thank my right hon. Friend for his support for local businesses in Beaconsfield and across the UK. What provision or safety net is he creating for local businesses that may be affected by lockdowns across the country?
My hon. Friend makes an excellent point, and I thank her for it. She will know that some of the interventions we have already put in place will last through into next year, for example the removal of business rates for businesses in hospitality, which has been particularly affected. She may be reassured to know that we recently introduced the new business support grant for businesses forced to close as a result of local lockdown, when the Joint Biosecurity Centre gold command has instituted that measure, and grant payments will be up to £1,500 per three-week cycle.
The aviation industry is on its knees: airports are deserted, planes are grounded and travellers are frustrated. In large part, the plight of the industry is due to the inconsistent, illogical and contradictory policies being followed by the Government to attack coronavirus. Will the Chancellor consider what actions he can take to support this vital industry, on which we depend for our connectivity, by either reducing or suspending air passenger duty, or through targeted job support?
The right hon. Gentleman is absolutely right to highlight the importance of the aerospace industry to our economy. It is, in common with aerospace industries across the globe, suffering a deep depression in demand for all the obvious reasons. He can rest assured that we engage regularly with the companies in that sector. In particular, to support their future success, we are investing heavily in R&D alongside those companies to make sure we remain on the cutting edge of advanced manufacturing capability.
Does my right hon. Friend agree that the benefits of the Government’s tax-free childcare scheme, which gives eligible families a 20% contribution to the cost of childcare and works alongside the 30 hours of funded childcare available to working families, cannot be overstated as the economy reopens to my constituents and across the UK?
My hon. Friend is absolutely right to highlight the importance of good childcare, and the fact that the Government support people with 20% of their childcare costs up to a cap of £2,000 through tax-free childcare. I can also tell him that, in recognition of the importance of this issue, we made some adjustments to the way in which tax-free childcare operated during the pandemic, so that if someone’s income fell below the minimum income requirement as a result of what was happening, they would continue to receive financial support up until the end of October.
At the end of August in my constituency, there were 2,000 more people unemployed than there were in March. The number of 18 to 24-year-old claimants has almost doubled. If history teaches us anything, it is that young people and those living in deprived areas will be more adversely affected by any downturn in the economy. What special measures is the Chancellor considering for young people in areas like mine, which are the most deprived?