Asked by
To ask Her Majesty’s Government what plans they have to protect
the prosperity and wellbeing of British citizens from the effects
of the COVID-19 pandemic on (1) the United Kingdom’s gross
domestic product, and (2) the global economy.
The Question was considered in a Virtual Proceeding via video
call.
(Con)
My Lords, the Covid-19 pandemic is the biggest threat this
country has faced in decades and we know that people are worrying
about their livelihoods, as well as their health. That is why the
Government have announced unprecedented support for public
services, workers and businesses. These measures include, but are
not limited to, £14 billion for public services, the Coronavirus
Job Retention Scheme and guaranteed loans for businesses that
will help protect them against the emergency and ensure that our
economy recovers quickly.
(GP)
I thank the noble Baroness for her Answer. I quote from a
Conservative Party press release of 16 September 2019:
“Strong … economic growth means more money for our public
services.”
Our economic management has relied on growth for employment,
pensions and health. We have an expectation of a very large fall
in GDP as a result of coronavirus, and years of recovery. Will
the Government be making plans along the lines of the German
Government’s 2018 report on the precautionary post-growth
approach?
The Government are putting in place measures to respond to this
crisis to protect against the economic harm that is being done
now so that we can bounce back quickly. That is exactly why we
have put in place schemes such as the job retention scheme, so
that we can protect people while we have to have social
distancing measures in place and ensure that the economy bounces
back afterwards.
(Con)
In Eastbourne, where I live, we are looking at a very substantial
level of unemployment due to the restrictions on the hospitality
industry perhaps lasting for really quite a long time. Will the
Government encourage communities such as ours around the country
to come forward with their own plans for their renaissance and
support them, rather than trying to create plans in the centre,
or even at LEP level?
One thing that is unchanged in this crisis is the Government’s
commitment to levelling up across the country. The Government
fully acknowledge the importance of local plans in building our
economic recovery once we are through this pandemic.
(CB)
My Lords, after the 2008 global financial crisis, UK productivity
fell from an annual average rate of 2% to just 0.3%, with full
recovery happening only after 30 quarters. Can the Minister
assure the House that the lessons of 2008 are being taken into
account in dealing with today’s crisis? In particular, what
assessment has been made of the longer-term impact on
productivity, and therefore on essential funds for public
services, of failing to protect the goods and services sector
alongside the understandable employment subsidies to protect
jobs?
I assure the noble Baroness that we will reflect on all lessons
from the past in dealing with the current crisis, although we
have never seen anything quite of its nature before. One of our
focuses, through the job retention scheme and the loans available
to businesses, is to protect and maintain our productive capacity
so that we can bridge this crisis, come out the other end, and
protect our nation’s productivity and growth.
(Lab)
My Lords, 60% of private sector workers in the UK were employed
by SMEs, with more than half—some 9 million—in microbusinesses.
Many SMEs are struggling to keep their businesses alive and
workers on their books. We know that, if too many fall, this will
scar the economy and slow recovery. The Chancellor’s announcement
of the bounce-back loan scheme is welcome, but at what rate do
the Government now expect loan finance to flow to SMEs, what is
the expected impact on the number of businesses that will stop
trading, and what further refinements to the current schemes
targeted on SMEs are the Government reviewing?
As the noble Baroness said, we introduced bounce-back loans just
this week. We are moving at pace to make sure that all the
measures that we have announced are implemented. Because of that
pace, we will of course always keep those measures under review
to see how well they are working and that the support is getting
where we want it to be. If further measures are needed, we will
keep that under review as well.
The Lord Speaker ()
. No? I call the noble
Baroness, Lady Rawlings.
(Con)
My Lords, what is essential? Does the Minister agree that mental
stability is vital for prosperity and well-being? If so, does she
agree that gardening and the arts are essential for the mind,
just as food is for the body, to keep this nation prosperous and
sane and to save lives?
The Government are very conscious of the impact that this
pandemic may be having on people’s mental health and well-being.
That is something that we will take into account as we look at
the social distancing measures that we have in place. I know that
many arts organisations are undertaking a lot of innovative work
to bring arts into people’s homes. With regard to garden centres,
we are working closely with the Horticultural Trades Association
to see what can be done as we look at the easing of these
measures.
The Lord Speaker
. No? I call the noble
Lord, .
(CB)
Black and minority ethnic youths are twice as likely to be
unemployed as their white counterparts and 48% more likely to be
on zero-hours contracts. What plans do the Government have to
mitigate this already shocking data, which could get very much
worse?
I thank the noble Lord for his question. We are, of course,
extremely concerned about the impact of Covid on employment. That
is why the job retention scheme applies to all people on the PAYE
system, including those on zero-hours contracts. We have also
made the welfare system more generous during this period,
including adding to the standard allowance on universal credit.
(LD)
My Lords, farmers are vital to our food industry but, to make
ends meet, many have diversified. This makes access to government
support complex and difficult. Many are finding that the money is
not reaching them, and they certainly cannot contemplate taking
on more debt. This is causing hardship and they risk losing their
farms. What can the Government do about this?
I thank the noble Baroness for her question. The Government
continue to engage with farmers and the NFU to see what support
we can put in place for the sector. Of course, all existing
business support is available to farmers and we will look at any
particular problems that they may have in accessing that support.
(Lab)
The noble Baroness’s Answer is typical of the Government’s
response, which tends to be relatively short-term, looking just
one or two months ahead. What work are the Government doing to
develop longer-term scenarios, with proposals that look further
ahead and are more holistic, fitting all sectors of the economy
together in the overall consideration?
I agree with the noble Lord about the importance of a longer-term
view. He is right that in the last five weeks we have focused on
getting immediate support up and running for individuals and
businesses, setting out those policies and making them
operational, but that does not mean that there is not further
work to be done to take into account the longer-term view of this
crisis. It is true that facts are changing as we go along—the
disease and our knowledge of it are changing—so we will want to
take that into account as we develop our long-term plan.
(Non-Afl)
QE was used very successfully by the Bank of England in the
banking crisis. Are discussions under way for some form of
people’s quantitative easing to deal with the ensuing economic
crisis?
Of course, decisions around monetary policy are for the
independent Bank of England. It has already taken action in this
crisis, including cutting the bank rate from 0.25% to 0.1% and
introducing the Term Funding Scheme with additional incentives to
support small and medium-sized enterprises during this time.
