Covid-19 Economic Support Package — House of Commons, 2020-10-14
Topic: Macroeconomics
Taiwo Owatemi (Labour, Centre-left): I am pleased to be speaking in the debate today. Yesterday, my hon. Friend the Member for Oxford East (Anneliese Dodds) raised a pertinent question with the Chancellor regarding the economic support available to individuals and businesses in the areas subject to additional public health restrictions. We have repeatedly spoken in the House about the Chancellor being out of touch with the financial needs of the businesses, employees and employers in our constituencies, and he is proving us right yet again. I ask him: what good is the job support scheme to businesses in Coventry North West if it does not provide crucial support to employees in tier 1 and tier 2 lockdown areas if businesses choose to close because of coronavirus restrictions? I will tell him: it does absolutely nothing The Chancellor’s sink-or-swim approach to the job support scheme is letting down my constituents who will not be able to access it. The job support scheme provides less security to employees than the furlough scheme. My constituents will go from receiving 80% of their wages to just 66% on the job support scheme—and that is only if people can work a third of their stipulated hours. If they cannot work, they do not receive anything. What does the Chancellor think will happen to people on lower incomes and people on zero-hours contracts? I will tell him: it will push them further into poverty, and possibly into financial destitution Financial support will apply only to businesses in regions under a tier 3 lockdown that are forced to close. The Chancellor has called the scheme a safety net for businesses, but it will not be a safety net for businesses that choose to shut down; nor will it be one for businesses that are told to close by local public health authorities. I do not know what the Chancellor considers to be a safety net, but this is not it. The financial support offered by the Government will do nothing for those who have been excluded from support from the very start of this pandemic, and it will do nothing for businesses that are not forced to close but need to. This is not fair and not right Her Majesty’s Revenue and Customs estimates that there are several hundred thousand fewer people on payroll since the beginning of the pandemic, and economists expect unemployment to increase, so what is the Chancellor doing to safeguard employees? We have already established that many people will fall through the gaps in the new financial scheme on offer. The Bank of England has estimated that the unemployment rate may well be 7.5% at the end of 2020. In Coventry North West, unemployment claimant figures have risen to 4,815, and I fear that number could rise more The Chancellor needs to ensure that economic support goes hand in hand with the imposition of local restrictions. We cannot have a one-size-fits-all tier system: it is doomed to fail from the very start. Were Labour in government, we would put in place a job recovery scheme that fixes the problems with the Government’s scheme, so that employers can keep more staff on rather than having to let people go. This would ensure that no one on the scheme would fall into poverty, and it would be open to all businesses impacted by the restrictions. A tightly designed and targeted scheme would also ensure that money is spent where it is most needed.