The speech made by Alison Thewliss, the SNP MP for Glasgow Central, in the House of Commons on 9 September 2020.
People across these islands are going through the most difficult of times. In the past six months, people have lost loved ones; they have not been able to have the human contact we all need; and they have struggled to keep themselves and their families going. Communities have pulled together admirably to help their neighbours, but businesses of all sizes have found it difficult, and an estimated 730,000 jobs have been lost so far. Ending the employment support schemes prematurely could cost 3 million jobs. The SNP fully supports the motion tabled by the Labour party today.
On 17 March, the Chancellor made a promise in this House. He said:
“I promised to do whatever it takes to support our economy through this crisis and that, if the situation changed, I would not hesitate to take further action.”—[Official Report, 17 March 2020; Vol. 673, c. 931.]
On these Benches, we welcomed the coronavirus job retention scheme and the self-employment support scheme. The economic powers to create such schemes rest in the hands of the UK Government. That has nothing to do with the strength of the Union: it is merely a reflection of where the economic powers lie.
The Scottish Government’s programme for government shows that where we do have the powers, Scotland has an ambitious and comprehensive plan for sustainable economic recovery, and 71% of Scots now think that Holyrood should have the financial powers required to protect our economy.
Douglas Ross (Moray) (Con)
The hon. Lady mentioned the SNP’s programme for government. Does she agree with the SNP Scottish Government adviser who has said that the programme for government announced by Nicola Sturgeon lacks ambition for business and economic recovery in Scotland?
The hon. Member ignores the fact that the SNP Government do not have the full range of powers that we need to protect our economy and which only independence can give us. He knows that is the case.
This is no ordinary economic downturn. The UK Government, on clear and urgent public health grounds, instructed and required many profitable, productive and sustainable firms to close. In sectors, such as hospitality, events, tourism, aviation, culture and the arts, these limitations will remain for the foreseeable future.
One thing we have not yet considered in this debate is the proposal for a four-day working week. Does the hon. Lady think a four-day working week could enable the economy to maintain its position and get beyond the dark spots of next January, February and March?
The hon. Member makes a very good and well-considered point. There are lots of opportunities the Government have not considered for how we might spread around the limited and reducing number of jobs we have in order to keep people in employment.
The Federation of Small Businesses has noted that tourism and retail account for nearly half a million jobs in Scotland, many of them seasonal and rural, and many of them now facing the furlough scheme’s winding down at the very time business is at its quietest. As we have seen from local lockdowns, such as those in Leicester, Aberdeen and Greater Manchester, there is an urgent need to put in place more flexible and enduring support—exactly the type of further action the Chancellor promised he would take. Aberdeen, for example, only managed to raise £232,000 via the “eat out to help out” scheme because of the local lockdown imposed on hospitality there. That compares with over £1 million each in Glasgow and Edinburgh. We need to look at whether the schemes in place are flexible enough when local lockdowns happen.
A further spike and further local restrictions seem inevitable, so ending support now is incredibly short-sighted. Until public health grounds for closure are removed, the SNP believes that the Government have a clear responsibility to assist and support wherever they can. The Chief Secretary to the Treasury mentioned some additional schemes at the tail end of his remarks, but I would ask him to think very carefully: could he live on the money he proposes for those asked to self-isolate? If he ran a business, could he survive and pay wages, pay for stock, the rent and all the bills on the grants he has announced? He probably could not, and many businesses cannot and will fold as a result without support.
The Chief Secretary to the Treasury talked about phases of this crisis. The coronavirus is not done with us yet. Life is not going back to normal any time soon. The British Chambers of Commerce’s quarterly recruitment outlook revealed that 29% of firms expect to axe jobs over the third quarter—a record high. At the same time, the number of new job opportunities is also depressed across almost all sectors, as is reflected in the various vacancies data. For example, the Office for National Statistics and Adzuna data show the number of online job vacancies for Scotland for the week to 21 August to be almost half the 2019 average—down 49 percentage points—and the Office for Budget Responsibility has warned that UK unemployment could surpass the peaks of the 1980s after weaker than expected economic growth. The Chancellor and his Treasury team have a duty to prevent this kind of economic scarring. The devastation of the 1980s still haunts many communities, and I urge them not to gamble with the life chances of the people we are here to represent.
I give credit where it is due to the Government: the assistance afforded to the tourism industry has saved it in my constituency, which relies hugely on tourism. God forbid that the second spike gets worse than it is, but if it does and we have to close things down again, frankly that will ruin some of those businesses permanently. I make a plea to the Scottish Government and Her Majesty’s Government in Westminster to work together as closely as possible. I hope that this eventuality does not happen, but if it does, we will all need to put our shoulder to the wheel.
The hon. Member is absolutely correct. A second spike does not seem to be on the Government’s agenda, and it should be. The measures put in place were put in place at speed, at haste, and the Government should be learning from this and preparing for that second spike now. I would be incredibly grateful if at some point a Minister confirmed that they are doing that, because it is absolutely necessary. We cannot ignore the risk of a second spike, given how the figures have been creeping up in recent days.
The IPPR has said that ending the furlough scheme will lead to unemployment
“not seen since the Great Depression of the 1930s”,
with the loss of 3 million jobs, 2 million of which would be viable in the longer term if it were continued. The furlough scheme should be continued for at least two years, or for as long as we need it—perhaps we will not need it for two years, which would be a good eventuality—as is being done in Germany and France. Independent Ireland is keeping its scheme going for a year. No employee or employer should be forced to decide between their health and their income.
The self-employment support scheme should also have been continued. In addition, a basic temporary income scheme should have been introduced to protect anyone falling through the gaps in support. There is still time for the Treasury to step in and make that commitment, because the lack of parity between those in the different schemes is completely unjustifiable. I remain deeply disappointed that the recommendations of the Treasury Committee to address the gaps in support have not been taken up by the Treasury. The ExcludedUK group, representing at the least 3 million people who have been denied any UK Government support—these include the newly self-employed, freelancers, limited company directors, those on short-term PAYE contracts and many others—is still being ignored by the Chancellor, despite having presented the Treasury with viable solutions.
The situation facing women requiring maternity leave has also been incredibly stressful and unfair, with many finding themselves ineligible and some who were forced to take maternity leave early now struggling to get the childcare they need to even attempt to go back to work. It is hugely disappointing to hear that the UK Government have rejected the very reasonable request by the 226,000 maternity petitioners to extend maternity leave for three months. I hope the Government will reconsider that. I am led to wonder whether different decisions might be made if there were more women on the UK Government Benches.
When we see Jim Harra, head of HMRC, admit this week that £3.5 billion of furlough cash has been lost in fraudulent claims or error, it is even more galling to those who have no support whatsoever. There have also been errors in my constituency on HMRC’s part. Its inflexibility and inability to deal with MP requests on this issue has also been hugely frustrating for those whose businesses are on the brink.
The take-up of the coronavirus job retention scheme has been significant, as has been said, with 9.6 million workers furloughed by 1.2 million employers since March. Those employers had made £34.7 billion of furlough claims by 9 August. The scheme will cost the UK Government an estimated £80 billion in total, but we should not forget that this cost is an investment in people and in public health. The cost of not acting would be far greater.
The figures published by the Treasury demonstrating the sectoral impact of the furlough scheme are interesting. They show only 2% of employees in public administration and defence and 7% of those in finance and insurance being placed on furlough, compared with 77% of those in accommodation and food services—some 1,693,600 employees—and 70% of those working in the arts, entertainment, recreation and other services, amounting to 474,300 employees across the UK. This of course reflects the different nature of the jobs in those sectors and whether it has been possible for people to work.
The sectors in which furlough take-up has been high are not suddenly going to be able to return to pre-covid business, and there is a real argument for sectoral extensions if the Government will not consider a wholesale extension. The ability of these businesses and organisations to generate income will continue to be hampered by the need to impose public health restrictions. For example, how would a national arts company or a full-scale production be able to get a theatre performance up and running? How would that theatre be able to turn a profit at 40% capacity? What about the restaurant next door, which theatre goers might usually have gone to for a pre-theatre meal, or the pub they might have gone to afterwards, where nobody will be allowed to stand at the bar and that will not have outdoor seating in the depths of a Scottish winter, or even a Scottish autumn?
How does the Chancellor expect such firms to bear the cost of staffing, rent and other outgoings when they will not see a corresponding increase in income? The short answer is that those costs cannot be borne. The CBI’s head, Carolyn Fairbairn, has warned that
“it’s too soon to pull business support away at the end of October”.
The Fraser of Allander Scottish business monitor for quarter 2 this year reported that 55% of businesses that have made use of the job retention scheme expect to decrease their staffing numbers when the scheme is phased out.
My hon. Friend will have heard me raise with the Chief Secretary those companies that have abused the furlough by using it to pay for mass redundancies—British Airways is not alone; Centrica and others have followed suit. However, he failed to answer the question about the firing and rehiring of staff at massively reduced wages. Does she think that is fair?
It absolutely is not fair. The scheme is being abused by businesses, and that should not be allowed to happen. I commend to the Government my hon. Friend’s Bill on fire and rehire. If they wanted to do anything at all to help, they would take on the recommendations in his Bill, because they would make a huge difference to people. People should not be expected to do the same job on vastly reduced terms and conditions, under pain of losing their job altogether. It is exploitation pure and simple, and the Government should not accept it.
The Chief Secretary talked about new opportunities for those in industries that could not continue, but that fails to recognise the reality that there might not be enough jobs for those who are laid off to go into, and that what jobs there are might not be at the same wage level as the jobs they are in now. The cost will be met by the UK Government in one way or another—in employment benefits if not in extending furlough.
The end of furlough coincides with the end of the period for which people have been granted bill payment holidays. The Standard Life Foundation report, “Emerging from lockdown”, highlights that
“of the 3.7 million households across the UK granted a bill ‘payment holiday’, over 6 in 10 are already facing financial difficulties and will struggle to repay their debts when these arrangements end. For many, these payment holidays will cease on 31 October 2020—the same date the government’s job retention schemes end, leaving many facing job losses and crippling financial strain.”
The effect could be devastating: people laid off because their employers cannot afford to keep them on, with debt mounting, and all this among people who are already finding life difficult. The drop in income if people move on to universal credit—if, indeed, they are eligible, which many people are not—will push many families over the brink. I fear that the UK Government are not looking at the bigger picture in the choices they are making.
The kickstart scheme is not available easily to small employers, which could have a disproportionate impact on the rural economy in places where there are not enough employers to club together to make up the minimum 30 employees. To return to a theme I have spoken about before, there is a risk of young workers being exploited and not being paid a living wage. Nobody in this House would want to live on the wages that young people are expected to work for in this country. I ask the Chief Secretary to reconsider and to pay a real living wage to the young people on the scheme. They deserve nothing less.
I also raise caution about relating the scheme to universal credit, because many people are not able to access universal credit, as I have said. If the scheme runs only through universal credit, many young people who might otherwise have benefited from the scheme, such as it is, will not be eligible.
Where the Scottish Government have the power, they have acted. The Scottish Government have spent £4 billion on covid, with over £2.3 billion for businesses. That is above the Barnett consequentials allocated to us. The Scottish Government published their response to the recommendations of the Advisory Group on Economic Recovery on 5 August. They are acting to protect jobs by developing and delivering sector-led recovery plans, working with industry leadership groups, trade unions and others, starting with the construction sector, which is coming back from its furlough period. They are supporting jobs through the covid-19 transition training fund. Through the programme for government, they are supporting a national mission to create new jobs, good jobs and green jobs, which includes investing £60 million to support up to 20,000 young people into jobs. There is the £100-million green jobs fund, investment in decarbonisation and the Unlocking Ambition programme. They are also using the national performance framework to promote equality and to respect, protect and fulfil human rights.
The Scottish Government have made an extra £330 million of funding available this financial year specifically to support Scotland’s economic recovery. That includes £230 million of economic recovery stimulus to invest in capital projects and a £100 million package of funding focused on protecting jobs and supporting those who have been made redundant or whose jobs are at risk.
I would dearly love the Scottish Government to do more, given the scale of the crisis, but their hands are tied. The Fraser of Allander Institute is clear that
“the Scottish Government can borrow up to £450m per annum for capital investment (a cap of £3bn). On resource spending, they can borrow up to £600m per annum (a cap of £1.75bn), but only for ‘forecast error’ and ‘cash management’. They cannot borrow to fund discretionary resource spending.”
That is the crucial point. We urgently need more financial powers in Scotland. If the UK Government will not act on the things we have asked them to act on, they should not stand in Scotland’s way when we have a desire to support our people and businesses. Powers must be devolved to let the Scottish Government get on with the job.
All of this stands in the context of the looming threat of a no-deal, chaotic and damaging Brexit, with the UK Government gleefully breaking international agreements they themselves signed up to and the outrageous proposals today in clause 46 of the Tories’ United Kingdom Internal Market Bill. The UK Government’s power grab over economic development and infrastructure plans cannot be allowed to stand. The Tories speak of a power surge, but the last time I checked, a power surge was a dangerous thing that usually lasts only a few seconds, but that results in serious damage to valuable appliances. For once, the Tories might be telling the truth when they say that that is what is coming to Scotland under their plans.
Westminster and the Tories cannot be trusted with our economy. What we see today is not “whatever it takes”. Winding up the furlough scheme and allowing so many people to fall through the support net will cause lasting harm to so many people with businesses and to the wider economy. We must have the full powers of a normal independent country to meet the needs of our economy and, most importantly, of the people of Scotland.