John McDonnell on Covid-19
John McDonnell’s speech in Parliament on the coronavirus crisis on March 25th. This was his last speech as Shadow Chancellor of the Exchequer. John is the President of the LRC
On Monday, the Prime Minister ordered a 21-day lockdown and asked non-essential retail and leisure facilities to close. We supported that measure, all of us. Indeed, we called for it and we welcomed it. But today we need clarity and security for all.
The spike in deaths that had been predicted hit us yesterday, with 87 of our fellow citizens killed by the coronavirus in a single day. The numbers have reached 435 who’ve lost their lives and all of us send our condolences to their family and friends. Sadly, we all know that there is every likelihood that even worse is to come.
People understand the health risks, they fear for their loved ones and their neighbours. The human response has in many ways been tremendous, and I pay tribute to the response of the British people. The community-based mutual aid groups that have sprung up. The 170,000 people who have signed up as volunteers to offer support to those who need it. The 11,000 recently retired NHS staff who, despite all the risks, have returned to the profession.
People and businesses were reassured initially by the Chancellor’s financial package but we have to be honest, in recent days, the gaps have emerged and people are worried. Alarm bells are ringing right the way across our constituencies.
We, in this House, are behaving responsibly. We are socially distancing ourselves. Some have longed to put greater distance between each other. But politically we have come together, working across party lines to try to get this right. And it is in that spirit that today, I will ask the government to act, and to act urgently, to plug the gaps that have come to light.
This is not a blame game but genuine constructive engagement on all sides. Our constituents are raising issues with all of us: the self-employed workers on insecure contracts, health and social care workers, and many others. They all have one thing in common: they are worried about their security, their income, their job, their home, the wellbeing of their families, children and elderly relative. And it is the job of government to provide that reassurance, especially at the most worrying times.
While people are, by and large, behaving responsibly, some employers are not. We’ve heard about them today. And lives are being unnecessarily put at risk. I know the whole House will condemn those employers who act with callous disregard towards their staff. Yes, there are the Tim Martins and the Mike Ashleys, but we’ve heard today there are too many employers acting in this way.
We also condemn those banks who see this crisis as an opportunity to hike interest rates on overdrafts, knowing that so many people are going to see their incomes fall. We condemn those retailers that are hiking prices as people anxiously shop less frequently, profiteering in a crisis.
The whole country needs clarity about what should be happening in this lockdown – both businesses and workers. The Prime Minister described this as a war against this virus. I agree with him. In the Second World War, there was an initial period described as the phoney war. Because of the inconsistencies of the interpretation of the lockdown, we seem to be in a phoney lockdown.
If we are to be serious in defeating this enemy, we have to go all the way. People and businesses need certainty. All businesses should close down unless they have an essential role to play in the fight against the coronavirus or unless the business can continue to operate with staff working from home.
Construction sites should be closed down unless they are building health facilities. They should close now. They are putting lives at risk by operating still. The Scottish First Minister has said they should, the Mayor of London says they should, but the government is allowing them to continue.
I have spoken to construction workers and their unions in recent days. They have told me that social distancing on a building site is just not possible. For some roles, it would not be safe to do.
Yesterday the Health Secretary tried to blame the Mayor of London for reduced services on the London Underground. Earlier in the day, the Mayor had explained that some 20% of staff are either off sick or self-isolating as a precaution and that the tube was running at the maximum capacity it could given those constraints.
The construction company Taylor Wimpey has taken the responsible decision to shut down all its sites, and I commend them. The government must back workers and their unions who refuse to work in unsafe workplaces. The government must order workplaces to close if they are not essential in the fight against coronavirus.
Businesses and workers need the clarity that they deserve. The government needs to assure those businesses that they can furlough their workers and 80% of wages will be paid, backdated and that interest-free loans are available and readily accessible now to meet any short-term shortfall.
Can I ask for a small further demand; can apprentices, many of whom are paid just £3.90 an hour, be furloughed too? And can they please get not 80%, but 100%, because they earn so little?
As I asked the Chancellor yesterday, can the scheme be flexible? Workers put on reduced hours must be eligible so that the shortfall in wages can be made up. Some businesses will lose part of their operation and will need to carry on in reduced form. That would be the right solution for them. It cannot be beyond the wit of the great minds in the Treasury – the civil servants – to find a way. This is a call that was reiterated by the Resolution Foundation this morning.
Another YouGov poll found that one in 10 people surveyed are in still work with reduced pay or hours. Those people are not currently protected by the government’s scheme. For businesses to stay afloat, they need part-time workers, and these part-time workers need support.
I give an example to the minister – a real world example – forwarded to me by an Hon member from a worker, where 17 out of 160 staff are being kept on 40% pay while the rest are getting no pay or a redundancy payment of around £500.
Zero-hours contract workers and agency workers not on PAYE must be made eligible for the Job Retention Scheme. These are some of the workers most at risk of losing work and being unable to put food on the table during this downturn.
Can I ask for an assurance that non-UK nationals are eligible for the scheme? And can I appeal to the government to ensure support is provided for non-UK nationals in the coming weeks, when travel is so restricted, including through the suspension of ‘no recourse to public funds’?
Staff who can no longer work because of childcare responsibilities must be protected – why on earth would they not be eligible under this scheme? Think of the single parent who cannot work because they need to stay at home with their child. Surely they should be covered?
Briefly on the subject of childcare, can the minister be clear that childcare providers should not be charging parents for services that are no longer being delivered or can’t now be delivered? The concern I have is, because of the gaps in the Scheme, and because it will not be operational until April, it will not be taken up at the rate that we would hope for.
Lay-offs are happening now at scale. The DWP Secretary has said that 477,000 people have applied for Universal Credit in the last nine days, a sign of job losses at scale. So there is a real need to close the gaps and bring forward the scheme with some urgency.
The five million self-employed workers pay the same rates of tax they deserve the same protections. They are losing out. Let them claim 80% of their income lost – self-declared – and if necessary it can be clawed back on their 2019/20 tax return in January 2021.
If people claim fraudulently while still working, they will rightly be prosecuted. But right now millions of cabbies, childminders, plumbers, electricians, painters and decorators and actors have all lost work or closed down their businesses. As have builders, designated as the self-employed under the Construction Industry Scheme and they have no income. They need a solution, now.
Can I just point out that for all those saying it’s complicated, I know that. But other countries are managing it. I give just one example: Ireland, their national Covid-19 support scheme will be up and running on Friday. It covers both PAYE and self-employed at 70% of their net wage. Many other countries have comprehensive schemes and some more generous schemes.
On Statutory Sick Pay – both the Health Secretary and his predecessor have said honestly and candidly they cannot survive on £94 per week. So will the minister increase this rate?
A rate that is less than half the level of many other European countries’ sick pay schemes. Again, I give the House another real world example sent to me by an Hon member whose constituent has been told their terms and conditions are being changed; so instead of sick pay of three weeks on full pay, they will merely get SSP.
And while he is at it, let’s stop insulting unemployed and disabled people with £73 per week, £57 if they’re under 25.
Thousands of workers have been laid off in recent weeks through no fault of their own. Many are struggling online to make a claim for Universal Credit. We need to know urgently what the government is doing to expand capacity.
I urge the government to heed the call of the Resolution Foundation today to raise Jobseeker’s Allowance and Employment and Support Allowance. We have suggested the urgent need to increase Carer’s Allowance as well. And the government has to get to grips with reducing the five-week wait for Universal Credit and to follow the calls of groups like CPAG to turn the advance loan into a grant.
I spoke to the PCS union which represents staff in the DWP. As a point of fact during the last spike in demand after the global financial crash it had around 130,000 staff. Today, it has just 78,000 staff.
Many of the government’s own workers have not received personal protective equipment and clothing, with nurses and doctors relying on makeshift masks and plastic bags. I pay tribute to the bravery and dedication of NHS and social care workers who have ploughed on regardless, but they deserve better too.
On medical advice can the minister be clear; should pregnant workers be self-isolating if they can’t work from home? Because the advice has appeared contradictory to many workers and employers. Again I have been forwarded a case where a pregnant worker was told to take three months unpaid leave if she will not continue to do face to face working.
We welcomed the moves to protect mortgage holders and to ensure that payment holidays are in place. We need the same security for renters. And to understand the differences.
A rent holiday is not the same as a mortgage holiday. Rent is paid continuously while in tenancy, while mortgages are fixed term meaning that repayment terms can simply be extended. It is therefore important that Government acts to ensure that people’s rents are covered, not merely payments suspended for this period.
We were extremely disappointed by the legislation published yesterday. Frankly, the Prime Minister has broken his promise to the country’s 20 million renters … in 8.5 million households.
It was not an evictions ban as promised. This legislation would not stop people losing their homes as a result of coronavirus – it just gives them some extra time to pack their bags.
This morning, the Housing Secretary said the Government could extend the three-month delay on evictions. He has said it is “extremely unlikely” that any possession proceedings will continue. That’s not clear enough or strong enough and the Government must look again.
But there are wider problems. Over recent years, austerity cuts have lessened the value of support available via housing benefit. The government must immediately suspend the benefit cap and the bedroom tax.
We welcome the moves announced last week on Local Housing Allowance but the Government must go further and restore the Local Housing Allowance from the 30th percentile back to the 50th percentile of market rates, as it was before 2010.
People will have made rental decisions based on their incomes, and they should not be penalised by the unforeseeable impact of the coronavirus. Now is not a time for families to be downsizing or sofa-surfing with parents, grandparents or friends in cramped conditions.
We cannot have a situation in which – at the end of this – tenants have either depleted all their savings or, worse, have amassed large and unpayable debts.
The suspension of evictions for private and social tenants should be extended from three months to six months. Shelter estimates that as many as 20,000 eviction proceedings are already in progress and will go ahead over the next three months unless the government takes action to stop them. They must be stopped. And when the Minister rises to his feet, he must be clear: no evictions. Of any kind.
Also we need to ensure that undergraduates are not charged rent for student accommodation they are no longer using as their institutions closed. What scheme is in place for them to claw back rent or escape tenancy agreements rendered defunct by this crisis. Likewise, will their student debt interest be suspended at the very least?
So what measures is the Chancellor proposing for suspending payments of household utility bills? We cannot have bailiffs and we cannot have disconnections of water, energy or internet at this time.
And what is the Government doing about those without internet access? Many people in our community rely on libraries to access the internet. Now that these are closing, what measures will the government bring in to ensure people can get online, whether for benefit services or to maintain some form of social contact?
At this time many people are falling back on charities. But we have been told that charities, voluntary organisations, and social enterprises are running out of money. With predicted losses of over £4bn in the next 12 weeks, what is being done to provide support to these groups, and can the Government clarify whether they will be eligible for the Job Retention Scheme?
Lessons must be learnt from this crisis. The first is that we must ensure in future that we build in all our public services the resilience they need to deal with future crises. That in our economy we eradicate the low pay and insecure work that prevents people having the personal economic resilience to cope when hardship threatens.
So let’s start planning now for the economy and society we want to shape after we have won the war against this virus.
This is my last speech in this Chamber as Shadow Chancellor. You may recall that when I address party meetings, I usually end with a single word. It’s a word upon which the Labour and trade union movement was founded.
It’s based upon a secret that we learnt in the fields and workshops of the early industrial revolution. It taught us that unity is strength and an injury to one is an injury to all.
That word is solidarity. It will be solidarity that will see us through this crisis to protect our community. And upon which we should build our society in the future. So, Madam Deputy Speaker, I end with: solidarity.
