‘Vital government acts to prevent a repeat of the 80s’
Stephen Kinnock, MP for Aberavon, explains why the Chancellor’s summer budget doesn’t measure up to the scale of the challenges we face
WHEN Rishi Sunak stood at the despatch box to deliver his summer statement, what my constituents needed to hear was a back-to-work budget, focused on the retention and creation of jobs.
Instead we got a grabbag of gimmicks.
Less than 24 hours after his statement, the Chancellor’s plans to pay firms a £1,000 bonus to keep staff on the furlough scheme, and his discount scheme offering 50% off restaurant meals were being questioned over their effectiveness and value for money by the head of HM Revenue and Customs.
Wales has relied heavily on the Coronavirus Job Retention Scheme (CJRS), with more than 316,000 people being supported by it, and more than 6,000 of them in my Aberavon constituency.
A further 1,440 people have been supported by the Self-employed Income Support Scheme in Aberavon.
But the abrupt withdrawal of these programmes in October risks pushing people into unemployment.
Already we have seen those claiming Universal Credit in Aberavon jump from 1,515 in February to 2,660 in May.
Although this is an imperfect measure of unemployment, it hints at the scale of the looming jobs crisis in Aberavon, and our Welsh Government
Minister for the Economy has warned we could see “unemployment on a scale not seen in Wales or across the UK for decades”.
Experience tells us that unemployment does lasting damage to individuals, their families and the whole community.
You only have to look at our former mining communities to see the damage that is caused when industries and jobs are lost. It’s vital that the government acts to prevent a repeat of the 1980s. What we need is an urgent package of economic measures with one clear focus: jobs, jobs, jobs.
For some, the Chancellor’s job retention bonus scheme will help, but it’s a broadbrush approach that even the Chancellor admits involves “dead weight”.
When people are facing the worrying prospect of unemployment, we simply cannot afford dead weight and the Chancellor should have instead taken a more targeted approach, focusing on the sectors – such as such as aviation, hospitality, tourism and the creative industries – that have been most impacted by the lockdown restrictions, and focusing support on them. It simply doesn’t make sense to withdraw support for sectors that may only just be reopening or operating at reduced capacity, at the same time as sectors that are operating as normal and that need less support.
One-size-fits-all is simply not the common sense approach, and the Chancellor needs to think again.
There’s also the pressing issue of the estimated three million excluded people in the UK, those who are newly selfemployed, PAYE freelancers, new starters, directors, sole traders or those who simply don’t meet the criteria, who have not received any government support. There was nothing in the announcement to help them.
Those living in my constituency are at their wit’s end with worry about how they are going to keep a roof over their head or pay their bills.
Retaining jobs is one thing, but to sustain jobs the Chancellor needs to support the sectors themselves so they can recover.
We’ve seen governments in other countries back their industries, like the Spanish Government’s package to help the tourism industry recover from the fallout of the coronavirus crisis or the many European countries that have helped their own aviation sector.
The cut in VAT is welcome and will help the hospitality and tourism sectors, but these and other sectors need more. It’s only right that we see support to help them cope with the impact of the pandemic.
We also need to see government support for key manufacturing industries like steel, which has been hit by a huge drop in demand. Steel is a vital foundation industry, and the Port Talbot steelworks makes the best steel that money can buy. The French and German governments provided their steel industries with government-backed emergency loans within weeks of lockdown, but here in the UK we’re still waiting.
Our economy and our communities are built on the steel industry.
Steel is in the cars we drive, the homes we live in, the offices we work in and the everyday items we use like pots, pans and cutlery. There can be no post-pandemic recovery without a strong and healthy steel industry, so the UK Government needs to act with far greater urgency.
Job creation will also be crucial to the recovery, especially for young people. We know that when unemployment goes up, it is the young that suffer the most. Younger workers find it harder to take their first steps on the career ladder when unemployment is high. It also lowers long-term employment prospects and earning potential.
The Chancellor’s Kickstart Scheme, which is very similar to the successful Welsh Government scheme, is welcome, but it doesn’t go far enough and fails to meet the size and shape of the challenge we face on unemployment.
The scheme needs to create genuinely new jobs and not just support recruitment that would happen anyway. It also should support people into finding their next job, particularly older workers.
With the prospect of rising unemployment, it is essential the benefits system provides a suitable level of support to those who, through no fault of their own, lose their jobs because of the pandemic.
What we’ve seen from the UK Government is a decade of welfare cuts and problems with the system, like the in-built five weeks wait for the first payment, which pushes people into poverty.
The £1 billion extra for the welfare system is welcome but doesn’t come near replacing what has been taken out of the system since 2010, let alone tackle a jump in unemployment. We must support the most vulnerable and poorest groups in our community who will suffer most, and the safety net that is our welfare system needs to be fit-forpurpose to support those people.
What Rishi Sunak announced created some eye-catching headlines and some of the measures will produce short-term benefits, but my Aberavon constituents need more than just headline and gimmicks. They need an economic package that gets to the root of the longterm foundational problems that we face, and one that has a single-minded focus on jobs, jobs, jobs.
Less than 24 hours after his statement, the Chancellor’s plans to pay firms a £1,000 bonus to keep staff on the furlough scheme, and his discount scheme offering 50% off restaurant meals were being questioned over their effectiveness and value for money by the head of HM Revenue and Customs
Those living in my constituency are at their wit’s end with worry about how they are going to keep a roof over their head or pay their bills - Stephen Kinnock MP for Aberavon