Covid-19 Economic Support Package — House of Commons, 2020-10-14
Topic: Macroeconomics
Neil John O'Brien (Conservative, Centre-right): It is a pleasure to follow such a good and impassioned speech Let me start with two important bits of context. The first is that this country and this Government are providing much more support to the economy and to preserve jobs and livelihoods than comparable countries. According to a report by the Institute for Fiscal Studies earlier this week, while France, Germany and the US are spending about 7% of GDP to support jobs, the UK is spending about 12% of GDP, so it is a much more powerful intervention to help people and preserve livelihoods. That is quite right, because, of course, we want to avoid the scarring effects of unemployment and to keep businesses that are viable together The second bit of context leads on from that, which is that, according to the IFS, we will borrow £350 billion this year, or 17% of GDP. It is the case not only that we have never borrowed so much before in our entire peacetime history, but that it is more than we have often borrowed in wartime—more than we borrowed in the first year of the second world war. Although the vigorous action that the Chancellor and his Ministers are taking is quite right, we would be wrong to think that this is consequence free. We must spend on a grand scale and we must spend quickly, but we must also spend wisely. Although many Members may suggest different things we could do additionally, it is important to take stock of what we have done so far. We have had the furlough scheme and its equivalent for the self-employed, which have helped 18,300 people keep their jobs in my constituency alone. That is an amazing achievement: a huge public sector IT project delivered by civil servants without any problems. We should be thankful to them for that fantastic achievement. We now have the job support scheme, which is more generous than the equivalents in France and Germany. Unlike in the US, where no such scheme exists and people are just on their own, we are going to help people to keep their jobs. In addition, there are all the other things we are doing to keep jobs: the £57 billion-worth of loans across the different schemes, with £51 million handed out in my constituency alone; the VAT cut for hospitality and the deferment of VAT across the board, which has put £30 billion into businesses’ cash flow; the grants of up to £25,000 for businesses, and £20 million going to businesses in my constituency in hospitality alone; the business rates holiday; and the eat out to help out scheme, which has pumped half a million pounds into cafés in my constituency alone As well as protecting jobs, we have also protected incomes. We have boosted universal credit by £1,000 a year; we have spent £8 billion in total on extra welfare and a hardship fund; we have introduced a mortgage holiday that has helped one in six people with a mortgage in this country; and, most importantly of all, we are taking steps to create new jobs, with £2 billion for the kickstart scheme and a £1,000 bonus to take on new trainees. We are also abolishing stamp duty to get the housing market moving and creating new green jobs with home insulation schemes. We have the brilliant, visionary policy of giving every adult over the age of 23 the opportunity to get an A-level qualification wherever they are in their life course and not writing anybody off any more. That is a huge levelling up policy that we can be proud of A recent report for the think tank Onward pointed out that schemes such as the coronavirus business interruption loan scheme and the job retention scheme had helped to keep one in eight businesses in this country going and avoided a rise in unemployment of 5 million people. The Treasury can be rightly proud of averting that disaster, and I encourage the Chancellor, who has been so unorthodox in response to this unorthodox situation, to keep being unorthodox and keep thinking about ways in which we can create jobs. A lot of young people have lost out on their education and a lot of young people are looking for jobs, and perhaps we could bring the two of those things together. There is still more we can do to create employment and new opportunities The last thing I wish to say is about the big picture. Local lockdowns do work. Leicester’s did work, as we brought the cases down from 160 per 100,000 to 25 per 100,000. If we can make that work, it is much the best way for this country to go in order to avoid real hardship. There have to be real lockdowns. We have to crack on with it and act quickly, and I am frustrated that some leaders in the north are not doing that. If we can make a targeted approach work, that is must the best way to go and that is the best future for this country.