Covid-19 Economic Support Package — House of Commons, 2020-10-14
Topic: Macroeconomics
John Philip Glen (Conservative, Centre-right): It is a privilege to close this debate on behalf of the Government. First, I thank hon. and right hon. Members across the House for their insightful and considered contributions. From listening to those contributions, it seems to me that we can agree about the nature of the challenge, which is to find a flexible and sustainable response to the twin health and economic emergencies caused by the virus. This Government have designed and implemented such a response. The Chancellor called for a toolkit to protect jobs and businesses over the difficult weeks and months to come, and in closing today’s debate, I will outline its newest elements and respond to some of the points made by Members across the House On Monday, the chief medical officer, Professor Chris Whitty, observed that we face two potential harms: "a harm for society and the economy on the one hand and a harm for health on the other hand." In other words, the decisions we take are about finding that right balance. The need for balance as we evolve our economic response was expressed eloquently by my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), who has provided wise counsel over recent months and set out very clearly how the Government’s intentions are to keep as much open as possible for as long as possible. In formulating the Government’s economic response to the pandemic—the subject of today’s debate—my right hon. Friend the Chancellor has sought that balance. He said earlier that we must not shy away from the burden of responsibility to take decisions and lead. We have not, and we will not The primary goal of our economic policy remains unchanged: it is to support people’s jobs. That is why we have progressed the next phase of our winter economy plan with the express intention of laying the track for economic recovery by protecting jobs through the coming months. As the Chancellor said, the new phase of that plan has three key elements: the job support scheme; cash grants for businesses that are forced to close; and additional funding for local authorities. These more targeted measures will come into force as the furlough scheme winds down at the end of the month. That scheme has supported more than 9 million jobs, but the House will understand that it cannot continue indefinitely, as the Chancellor made clear from the outset First, we will expand the job support scheme. This will help to protect jobs in businesses that can continue to operate as well as in those that cannot. For those businesses that can open safely but where there is reduced or uncertain demand, the Government will directly subsidise employees’ wages, meaning that those employees can work shorter hours rather than being made redundant. Businesses that are forced to close will also be aided by the scheme. In circumstances where staff are unable to work for a week or more, they will still be paid two thirds of their normal wage up to £2,100 a month. This will be covered by the Government and will apply right across the whole of the United Kingdom. Crucially, because the scheme will run for six months, it will give people and businesses the certainty they need. We have intentionally designed the scheme so that there is no gap in support for employees. Staff can remain on the furlough scheme until 31 October and will benefit from the new job support scheme from the following day Throughout this crisis, we have not forgotten about the self-employed, which is why we are extending the existing self-employed income support scheme for a further six months. This is in addition to the support through initiatives such as business rates relief, bounce back loans and the local restrictions support grant. For those who question the generosity of the job support scheme, we have looked closely at schemes implemented by our friends in countries such as Germany and Italy, and they are very closely in line Importantly, businesses can also access a wide spectrum of other help that we have made available in recent months. As the City Minister, I have been most closely involved in the temporary loan schemes that have been rolled out at pace to meet the needs of businesses large and small and recently extended to ensure that businesses that still want to access them can do so. As of 20 September, more than £57 billion has been provided to businesses of all sizes through Government guaranteed loan schemes At the same time, the welfare safety net available to those most in need has become more generous and responsive. Treasury analysis shows that covid-19 welfare changes, together with Government interventions since March, have supported the poorest working households most of all, reducing the scale of losses for working households by up to two thirds. I note the comments made by the hon. Member for Glasgow South West (Chris Stephens), who is no longer in his place, about the continuing need to address carefully the needs of the most vulnerable. The universal credit standard allowance and working tax credit basic element have both been increased by £20 per week for 2020-21, and given the way in which universal credit replaces 63% of lost income for the lowest earners, this means that someone on the job support scheme at 67% of their original earnings will see universal credit make up at least 63% of the 33% they have lost. This will mean that they will end up, in many cases, with nearly 90% of their original income.