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Britain should have had a Back to Work Budget today, but
today’s announcements fail to face up to the scale of the
challenge our country faces.
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We were promised a New Deal, but what we got was a Meal
Deal.
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We wait to see the detail on the plans the Chancellor
laid out on furlough, but so far it doesn’t appear to be nearly
targeted enough. The risk is that billions will be wasted by
policy making on the hoof that doesn't protect
jobs.
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Much of the money will go to businesses who were
bringing back employees already and would have done so
anyway. This runs the risk of being wasted money.
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Whereas the hardest hit sectors will find the £1000 per
employee make little difference as long as social distancing
measures continue.
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The government doesn’t seem to recognise the simple
fact that some sectors of the economy need sustained support
while others can absorb a gradual withdrawal.
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The government was too slow into lockdown, too slow on
PPE and too slow on testing. Now it runs the real risk of being
too slow on jobs and the economy.
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Many sectors are in trouble not because people want money
off meals – but because customers don’t have the confidence to
return yet. The Government needs to get Test, Track and Isolate
fully operational and restore confidence in the health response
so that the economy can grow.
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And that confidence will only return when the government
takes meaningful action to join up its health response with its
economic response. As we have seen through this crisis, the
failure to match soaring rhetoric with meaningful action has
consequences for people across the country.
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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.
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Despite all its talk, the government has failed to
produce a clear system for local lockdowns.
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As the Chancellor has himself admitted, the key to
getting the economy moving and customers back on the high
street is confidence in public health measures.
14th June 2020, Andrew Marr Show, – “if consumers are -
we know from the data or the issue is not so much that they don’t
have the cash because they’ve been saving over the last few
months, it’s whether they have the confidence and the psychology
of our country, are the animal spirits for us to get back to our
high streets in the way that we used to?” http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/14062001.pdf
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Government must act not just to deal with unemployment as
a symptom – but with its cause.
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This was a missed opportunity for the Chancellor to
abandon his one-size-fits-all approach to withdrawing the Job
Retention and self-employed schemes.
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The accompanying documents are very thin – government
will need to provide much more detail in the coming days so
that businesses get the confidence they need.
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The fiscal cost in the document of the VAT cut seems low
– and with no guidance published we can’t currently see the
scope of it. Business urgently need to know who will benefit
from these plans.
The government has made tentative steps to help the
unemployed – but has not acted to prevent
unemployment
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The Government is pressing on with a blanket withdrawal
of the Furlough scheme for August – despite some sectors
operating with severe restrictions and others working as
normal.
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High street footfall is still only at half the level as
the same period last year, whilst hospitality transactions over
‘Super Saturday’ were also down by nearly half.
https://news.sky.com/story/coronavirus-shopping-trips-still-50-down-as-pub-reopenings-fail-to-deliver-boost-12022984
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This is against international best practice – emergency
changes to Germany’s short-time work scheme last until
December, whilst France’s furlough scheme is expected to last
for up to two years.
https://www.bmas.de/SharedDocs/Downloads/DE/kug-faq-kurzarbeit-und-qualifizierung-englisch.pdf?__blob=publicationFile&v=5
https://www.ft.com/content/63b33ede-4463-4342-845a-26cf85a91d3d
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Labour has called for a Hospitality and High Streets
Fightback Fund. This would be funded by the government’s £1.7
billion underspend in financial support for businesses.
The Kickstarter Fund is welcome – but it fails to
meet the scale or scope of the challenge
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We’re glad the government has finally heeded Labour’s
call for a Future Jobs Fund style programme
Shadow Chancellor raised the need for a scheme modelled on Labour’s
Future Jobs Fund back in May, https://www.cityam.com/shadow-chancellor-backs-uk-long-term-coronavirus-jobs-programme/
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However, the Fund doesn’t address the scale of the youth
unemployment. Over 400,000 young people were already out of
work pre-crisis, and a further 800,000 are set to enter the
labour market.
https://www.resolutionfoundation.org/app/uploads/2020/05/Class-of-2020.pdf
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It also offers nothing for millions of unemployed older
people. Claimant unemployment is nearly at 3 million, whilst
there are over 8 claimants for every
vacancy.
Institute for Employment Studies, https://www.employment-studies.co.uk/resource/weekly-vacancy-analysis-vacancy-trends-week-ending-14-june-2020
