Wednesday 16 June 2021 / 2:55 PM Coronavirus / Economy / Rachel Reeves

Government’s border failure to cost UK economy more than £4 billion

Labour today reveal how the UK government’s border failures against the Delta variant– resulting in a delay of the roadmap to lift restrictions – will cost the UK economy £4.7 billion, according to ONS data.

Responding to the Treasury Economy Statement in the House of Commons, Labour’s Shadow Chancellor, Rachel Reeves, said that the Government had not only left too many businesses in the dark with new delays, but also failed to take responsibility for their lack of communication and own incompetence in stopping a new variant spreading in the UK.

Labour also pointed towards calculations which showed how, in the third quarter of 2021 Britain’s economy is forecast to bring in £16 billion less than the country’s pre-Covid peak, and they called on the Government to:

  • Present plans on self-isolation to strengthen levels of financial support for people needing to self-isolate if unable to work from home.
  • Present a flexible plan to help businesses pay back their loans in a sensible way when they are generating profit and back on their feet.
  • Delay the increased employer contribution to furlough, given that most of the 1.8 million people remaining on furlough are employed in the sectors affected by the ongoing restrictions – hospitality, live events, accommodation and travel.
  • On business rates relief, learn lessons from the Labour-led Welsh government, who has given the vast majority of businesses 100% business rate relief for the course of this financial year. In contrast, the Conservative government is sending out bills to businesses it has said cannot fully open.
  • Answer questions on where the support for greater ventilation in workplaces and in our public buildings is.

Shadow Chancellor of the Exchequer, Rachel Reeves MP, said:

“The Government’s reckless and negligent approach to border controls is being paid for by British businesses now.

“The £4.7 billion the delay to the roadmap has caused would have been used by businesses to pay commercial rent, pay people’s wages and recruit more staff.

“Now, despite the Chancellor once promising he would do “whatever it takes” to support businesses, he is making life harder for them at this crucial time.

“We want to see businesses make it through and thrive because they are an important part of what makes our country great, and essential for driving our recovery.”


Full text of Rachel Reeves response to Treasury Statement 16th June 2021


Five years ago today, my friend Jo Cox was murdered.

There’s not a day that goes by where I don’t think of her.

And I know she is missed on all sides of this house.

All the way through this pandemic, we have said the economic and health response must go together.

That means keeping support in place for as long as the public health measures demand it.

When the public health restrictions are extended – as they were by Prime Minister on Monday –  then the economic support should be extended too.

Otherwise – we risk falling at the final hurdle.

Having spent billions of pounds supporting the economy, it would be tragic to see thousands of businesses go to the wall, just because the Government withdrew support a few weeks too soon.

We are not calling for forever support.

We are calling for economic support that matches the timetable for opening up that the Government itself has set.

That’s the right thing for business, it’s the right thing for workers, and it’s the right thing for our economy too.

Let’s be clear about why we’re here.

The government’s delay in putting India on the red list has allowed a dangerous new variant to enter our country.

This is why we have the highest Covid infection rate per person across Europe – all because the Prime Minister wanted his VIP trip to India.

It was vain, it was short-sighted, and it was devastating.

As well as the health impact, our assessment using ONS data, tells us that that delay will cost the UK economy £4.7 billion.

That is money not spent in British businesses at a crucial time of the recovery.

That £4.7 billion would have been used by businesses to pay commercial rent, to pay people’s wages, to invest, to recruit more staff and to pay taxes into the treasury too.

Of course I welcome what the Chief Secretary has announced today on commercial evictions but the truth is if the Chancellor believed this level of economic support was enough he would be here announcing it himself.

Whatever this is – it isn’t doing “whatever it takes” to help British businesses and our economy.

So let me ask the Chief Secretary, given that the government has moved the goalposts, why haven’t ministers delayed the increased employer contribution to furlough?

Employers are being asked to pay more when they can’t properly open for business.

The vast majority of those remaining on furlough are employed in the very sectors affected by the ongoing restrictions – hospitality, live events and travel.

On 1st July

  • Loans to these businesses are having to be repaid
  • Self employed and those excluded from financial support worried about their futures
  • Grants ending
  • Business rate bills arriving
  • Furlough tapering off

All immediately after the Government has announced an extension of restrictions.

How on earth can the Treasury justify turning off support and sending businesses new tax bills when the Government is saying that the businesses cannot open?

On Monday the Prime Minister told the country that we need to learn to live with the virus.

So where is the much-needed plan that would enable us to do that?

  • Where is the plan for greater ventilation in workplaces and in our public buildings, including schools?
  • Where is the plan to shift contact tracing to a local level, when we know it works better in our communities than in a centralised Serco-led call centre?
  • Where is the proper financial support for people needing to self-isolate?

These are all essential measures to saving lives and livelihoods and avoiding the stop-start that has characterised this government’s response to the pandemic.

And given the WhatsApp messages revealed today from the Prime Minister about his own Health Secretary.

And Mr Speaker, I’ll use more diplomatic language than the Prime Minister managed, how can we have confidence in government Ministers, when they clearly don’t have any confidence in each other.

People have given up so much over this last year.

We have pulled together and shown the best of our country.

People have done everything asked of them, and much more.

We should not be in this position today.

Businesses and workers don’t deserve to have the rug pulled from under their feet at the 11th hour.

We want to see businesses make it through and to thrive again

because they are an important part of what makes our country great,

and they are essential for driving our recovery.

We need them, and they need us.

That’s why the economic support we have should match the health restrictions that are still in place.

And that’s what the government has failed to do today.