Covid-19: Economy Update — House of Lords, 2020-10-27
Topic: Macroeconomics
Denis Tunnicliffe (Labour, Centre-left): My Lords, as ever, I am grateful to the Minister for presenting this Statement. When we last discussed the economic update from the Chancellor on 28 September, he was rather unhappy with my characterisation of it as "another example of Ministers reacting to events, rather than attempting to shape them—of allowing problems to grow, rather than acting quickly and decisively to prevent them in the first place."—[Official Report, 28/9/20; col. 18.] The fact that we find ourselves discussing major revisions to the package of measures outlined just a month ago suggests, sadly, a lack of strategic thought in both No. 10 and No. 11 Downing Street. While some of the changes outlined by the noble Lord are to be welcomed, there is too little detail on how others will operate in practice. We know with financial Statements that the devil is in the detail, but on too many fronts we are still waiting for that detail to be finalised I have no doubt that the noble Lord will tell us not to worry and that everything is under control. However, in an ideal world, the Treasury would not be redesigning the Job Support Scheme a matter of days before it went live. That it is having to revisit its plans will have done nothing to address the anxiety of businesses and workers, which I referred to during our previous discussion. The revisions to the JSS and the announcement of an increase to the third grant for the self-employed are small steps in the right direction. Additional support for businesses operating in tier 2 and tier 3 areas is also welcome, although the announcement of new funding for such businesses makes it puzzling that some of that support was withheld when requested by the Mayor of Greater Manchester earlier last week We hope that changes to the formula for the JSS will encourage businesses to keep on more workers. However, as a range of commentators have noted, the late arrival of the announcement means that many thousands of jobs that may otherwise have been safeguarded have already been lost. As I said last time, each job loss is a personal tragedy. More needs to be done to protect people’s jobs and that requires a concerted government effort. Despite the changes announced last week, many workers still face noticeable reductions to their pay Despite taking home less, people will still have bills to pay, including mortgages and rent. The Government previously chose not to extend the statutory protections from eviction in place during the first wave of the pandemic. For homeowners, the ban on repossessions comes to an end on Saturday. Will the Minister confirm whether either policy is being revisited in light of the second wave’s arrival and the very real likelihood of unemployment continuing to rise The noble Lord will no doubt have seen the headline in the Resolution Foundation’s latest research on the Government’s Self-employment Income Support Scheme. The organisation echoes what we have said for some time: the programme has been poorly targeted and often missed those who are most in need. Its analysis suggests that a substantial number of beneficiaries have lost either no or minimal income as a result of the pandemic, whereas half a million people have received nothing, despite being left without work. The Treasury has had time to look again at the furlough, so why has it not properly revisited the self-employment equivalent? Will the Minister commit to doing that and, if so, can he provide a timescale? Will he also outline the rationale for the third grant being equivalent to just 40% of pre-crisis profits, rather than the higher levels of previous rounds? Why is the work of the self-employed suddenly less valuable than it was previously We appreciate the unprecedented nature of this public health crisis and the scale of interventions required. However, I hope that the Minister recognises that this is an equally challenging time for businesses and working people across the UK. They need meaningful support and early sight of the details so that they can make the right decisions for the future. The Government’s habit of last-minute announcements, often without accompanying detail, is severely undermining public confidence. This has been the case for not only economic measures but public health measures. I hope that the Minister can provide assurances that future announcements will come earlier and with more clarity. People’s jobs and our wider economic recovery depend on it.