Anneliese Dodds responds to Chancellor's summer economic update

Shadow Chancellor Anneliese Dodds in response to the Chancellors statement said;

"Our country has been through a great deal over these past few months. 

Hundreds of thousands have wrestled with this terrible disease. For many months, people have had to go without being able to embrace their loved ones - even to say goodbye. Tens of thousands have died.  

Our NHS, social care and other workers have made extraordinary sacrifices. We owe them so much.  

The Government has had to take big decisions too. We acknowledge that. But today, Mr Speaker, should have been the day, when our Government chose to build a bridge - between what has been done so far and what needs to be done to get our economy moving again.

It should have been the day when the millions of British people worried about their jobs and their future prospects had a load taken off their shoulders. It should have been the day when we got the UK economy firing again.

Today, Britain should have had a Back to Work Budget; but instead, we got this summer statement with many of the big decisions put off until later as the benches opposite know full well.

Labour is a constructive opposition during this time of crisis. We won’t criticise for criticism’s sake. But when the Government falls short, we will speak up. And the blunt truth is we have one of the highest death rates in the world, and among the deepest economic damage in the industrialised world from coronavirus.  

So the very first thing the Chancellor must do, is prevent additional economic damage due to the slow public health response of his Government.

As we have seen throughout this crisis, the failure to match soaring rhetoric with meaningful action has consequences for people across the country. 

Despite all its talk, the Government has failed to create a fully functioning ‘test, track and isolate’ system. This has damaged public confidence and in turn harmed consumer demand.

Despite all its talk, the Government has failed to produce a clear system for local lockdowns. The lack of timely information sharing has led as we all know to the imposition of an additional, wide scale lockdown in Leicester.

The Government’s contracts with outsourcing firms amount to almost £3 billion – but we still haven’t got test, track and isolate working properly in the UK, like it is in many other countries. And Government still hasn’t got a grip on the low value and limited scope of sick pay, risking peoples’ ability to self-isolate. 

Fear is corrosive. Fear is hurting our economy. Government has got to get this right.  

Now of course we welcome the Government’s announcements, today announcing VAT cuts on hospitality and tourism and on vouchers to be used in restaurants. Local businesses desperately need that support. And so many lower and middle income people in particular really need help right now. That’s why we’ve repeatedly called for social security for better support their needs and prevent people risking losing their homes. 

If delivered properly these measures should help.

But the Chancellor himself said, when interviewed on the Andrew Marr show, that the best the Government can do to boost demand is to give consumers and workers the confidence and psychological security that they can go out to work, to shop and to socialise in safety.

So please Chancellor - work with your colleagues so our public health response catches up with that operating in other countries. 

Mr Speaker, the Prime Minister said what have I been doing about that – my Party has been repeatedly suggesting solutions to the public health problems facing our country and we need to adopt them in the UK before this crisis becomes more severe.

Now the Government must act not just to deal with unemployment as a symptom - but with its cause.

Research reported this week in the Telegraph indicates that British workers have already been the biggest casualty in the global jobs cut. It showed that while jobs markets in many other countries have already fully recovered, in Britain it could take comparatively much, much longer for vacancy levels to return to normal. 

The levels of unemployment this country has seen in the past were not just an economic waste, they ruined lives. We’re seeing the same impacts again- the same devastated High Streets and communities robbed of their pride and purpose.

Now when it comes to the reemployment bonus announced by the Chancellor. Of course this is necessary not least because his Government refused to put conditions on the use of those funds related to employment. But I would ask him, first of all, how can he ensure that the money will not just go to employers who were already planning to bring people back to work. And secondly, what will he do for those firms that lack the cash flow to operate even with that bonus. 

And related to this, the Chancellor still needs to abandon his one-size-fits-all approach to withdrawing the Job Retention and self-employed schemes.  No one is saying these schemes should stay indefinitely. No one is saying that on this side of the house. But we have said that the money spent on the  Job Retention Scheme must not serve merely to postpone unemployment.

The scheme must now live up to its name - supporting employment in industries which are viable in the long term. And we need a strategy for the scheme to become more flexible, so it can support those businesses forced to close again because of additional localised lockdowns. There is still time to avoid additional floods of redundancy notices. It’s the Government’s duty to help Britain through this and stop unemployment at mass levels again.

We need action to ensure the support needed for key sectors of our economy, for our SMEs and our manufacturers. While we of course welcome the long-overdue arts and culture package, we still have not heard the Government’s plans for other sectors. Many of us expected us to hear them today but we haven’t.

The Operation Birch process has been slow, tortuous and opaque.  Large parts of industrial Britain need help to get through this - to keep their employees in jobs and keep their suppliers in jobs.  

Meanwhile, it appears there will be no solutions for SMEs who cannot take on additional debt, until the autumn. This risks many SMEs going to the wall. 

Until now, the Chancellor has described a targeted, sectoral approach as the Treasury ‘picking winners’. But the necessary public health measures have created losers. As the Chancellor just said right now, the Government required many businesses to shut down, to prevent the spread of this disease.

Supporting businesses which are viable in the long-run, but which are currently starved of cashflow, is not a matter of ‘picking winners’. It is about protecting our country’s economic capacity for the future. 

Failure to do so - to make the Job Retention and self-employed schemes more targeted and focused, and to support viable businesses - is driving up unemployment in this country.

The claimant count is on course to top 3 million in June - the highest number since the previous record in 1986. This is the Chancellor’s record, and one which cannot, and must not, be worsened. 

Where unemployment arises as a symptom of economic damage – more must be done to help.  

Now Labour repeatedly called for Government to match the ambitions of Labour’s Future Jobs Fund and Welsh Labour’s ‘Jobs Growth Wales’ programme - and finally, government has come forward with a scheme apparently modelled on them - the Kickstart scheme. 

The Conservatives cancelled the Future Jobs Fund. It’s taken almost ten years for them to catch up. And as with their belated adoption for our approach of ‘jobs, jobs, jobs’, this gives a new meaning to the phrase ‘Project Speed’. But at least we now finally have a recognition of the need for support for young unemployed people. 

And Government must also recognise the specific challenges faced by older jobseekers - many of whom are becoming unemployed for the first time - and those based in especially hard-hit places. Reimposing sanctions now is punitive and counterproductive when jobseekers need support. 

Now we must be ambitious for the future of our country’s economy. Our ambition should not just be to build our way out of this but to do so in a greener and cleaner way. 

For this we need more than the reheated announcements by the Prime Minister last week. Of course the investment announced was welcome - not least because much of it was already committed to by the Government.

But core elements are missing. £50 million to support retrofitting in social homes, for example, is just a seventh of what the Conservatives intimated they would be spending every year. 

Despite repeated trails, there is still no indication of whether a Northern Growth Board will be created and no indication of what funds it would have available to it.

And the muddled confusions over stamp duty over the last 24 hours reflect a broader lack of strategy when it comes to housebuilding. 

We’ve heard grand promises before which came to little - or nothing, in the case of the much-vaunted Starter Homes initiative. We really need, now, to see delivery. 

Overall, the UK’s investment package barely touches the sides of other countries’ commitments – even with what was announced today, it only equates to the value of Germany’s investment in hydrogen, alone.

The Committee on Climate Change indicated how far behind the UK is in the race to decarbonise. Failure to heed its recommendations is not only damaging to our planet. It also cuts us out of leading the development of the key technologies of the future. 

And the Conservatives are still refusing to impose conditions on investment- to ensure that it contributes to the goal of net zero, that it supports local jobs, uses local firms, leads to sustainable skilled employment in local areas and prevents the use of tax havens and other asset-stripping. 

Finally, if the Chancellor really wants to ‘build back better’, he must prevent a rerun of the past. From 2010 onwards we have seen how families’ resilience has been eroded. We entered this crisis with a quarter of families lacking even £100 in savings. In a typical classroom of 30, nine children are growing up in poverty; and our economy is the most regionally unequal in Europe.

Our local authorities continue to be cut to the bone, with many standing on the brink of bankruptcy. And rather than the promise that our NHS and social care services would get whatever they needed this winter, to weather a potential second wave- those words were conspicuously absent from the Chancellor’s speech. 

Politicians in this House have gone out on our doorsteps to clap key workers, while the lowest paid have struggled to keep a roof over their heads. We must have a new settlement for the future - an end to poverty pay for our social care workers and those who clean our hospitals and deliver our groceries. A recognition of the value of the work, of those who have been taken for granted for far too long. 

Now there were some initial press reports that the Government was due to announce generalised tax increases or cuts to services, this Autumn – contradicted by the Prime Minister, who rejected whatever had apparently been briefed out by the Treasury! It’s happened quite a few times.

Well I say to the Government, if it does increase taxes during the recovery, and cuts back on the public services we all rely on, this will damage demand and inhibit our recovery. Labour is not calling for tax rises - we are calling for growth. 

Now the Tory manifesto committed to no rises in income tax, National Insurance or VAT and therefore it is for them to set out how any additional spending will be paid for.

It’s the Chancellor’s job to make sure the economy bounces back from this crisis so there’s money in the coffers to protect the public finances.

Now, last week the Chancellor’s colleague, the Prime Minister, tried to claim the mantle of FDR. Maybe now we know why he went for Roosevelt. Because this week, the Prime Minister blamed carers for the failings in the system that his government has underfunded for the past decade.

The last thing his Government would want would be the sign on Harry Truman’s desk, the successor to Roosevelt, that said “the buck stops here.” If this Government had a sign it would probably say, “the buck stops anywhere but here.” 

But it can’t escape its responsibilities. To govern is to choose. To choose, to finally sort out test, track and isolate; to prevent unnecessary additional unemployment; and to build the green jobs of the future. This is the moment when our country needs its Government to help Britain through."