“We’re setting up a new coronavirus job retention scheme” says Chancellor Rishi Sunak “Government grants will cover 80% of the salary of retained workers, up to a total of £2,500 a month”
 

Rishi Sunak has been Chancellor for just a few weeks, but he has already earned a place in the history books for launching the biggest state intervention in the economy in recent history. Today, he unveiled a package of measures to support workers during the outbreak which will include the government paying the wages of staff who are unable to work as part of a ‘coronavirus job retention scheme’. A system of government grants will mean employees will get 80 per cent of their wages, up to a cap of £2,500 a month. There is no limit to the funding for the scheme, and pay will be backdated to 1 March and will continue for ‘at least’ three months.

Sunak appealed to bosses to keep their workers on and use this scheme, rather than laying them off, and also unveiled help for those who had already been put out of work. He is raising the Universal Credit allowance by £1,000 a year and self-employed people will receive UC at a level equivalent to statutory sick pay, while Local Housing Allowance will cover 30 per cent of rents in a local housing market.

 

Sunak and his colleagues drew up this plan with the help of the TUC, the CBI and others. It was still being finalised in the hour before the Downing Street press conference where it was announced and that perhaps explains why there are some holes in it. Self-employed workers are receiving far less than their PAYE counterparts. There is not yet clarity on the level of pay that will be set for those on zero hours contracts. These questions would be difficult for a government to answer at any time, but given the pace of change and the severity of the outbreak, it is hardly a surprise that the package isn’t perfect.

It also explains why ministers waited until today to tell pubs, clubs, cafes, restaurants and gyms to close their doors after tonight. Anything announced before the jobs package would have resulted in mass lay-offs, leading to an unemployment crisis.

 

Almost as striking as the unprecedented set of measures announced today was the way Sunak delivered them. He didn’t just stick to the money stuff, but delivered a moral message about the need for small acts of kindness between people to help the country through this crisis. It was the first reassuring, rousing message we’ve really heard from any frontline politician. Johnson is a leader who is happy to let his team shine rather than trying to hog the limelight, but there was an uncomfortable contrast between the two politicians this evening.

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Kate Andrews

Oxford Economics predicts a quick post-virus recovery – with one big caveat

Oxford Economics predicts a quick post-virus recovery – with one big caveat<img class="ResponsiveImage2-module__real-image ResponsiveImage2-module__real-image–fit-crop ResponsiveImage2-module__real-image–loaded" src="data:;base64,” alt=”Oxford Economics predicts a quick post-virus recovery – with one big caveat” />
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Britain is midway through a deep recession: of that there is no doubt. But what next? Oxford Economics has today been one of the first to offer an answer, predicting a V-shaped economic recovery (sharp economic downturn and sharp economic revival) and near-complete economic repair. It is, of course, a guess: all forecasts are. But it’s one worth looking into in a bit more detail. All published economic forecasts pre-Covid-19 (including those accompanying the Chancellor’s Budget last week) are defunct, so this is an early test – one that factors in the Government’s policy of ‘social distancing’ and the profound impact this has on business as usual.

Oxford Economics has replaced its estimate of modest GDP growth of one per cent to a prediction of a fall of 1.4 per cent. Short-term growth has been slashed, now estimated to fall by three per cent in H1. And economic volatility will be with us for a while longer, as the combination of public health advice, working parents now looking after school-age kids full-time, and further hits to service sectors all take their toll on the economy.

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But unlike the 2007-08 crash, the economy here is crouching, on government instructions. Unlike during a normal downturn, we do not want people out and about, spending money and increasing economic activity; we want them out of restaurants, out of shops, keeping their distance from others. So the question is how high the economy is capable of standing later on, when things return to some level of normality. Oxford Economics says quite high: they forecast it will skyrocket with 3.7 per cent growth next year, returning to fairly familiar growth rates – albeit slightly higher – in 2022 and 2023.

Its base prediction: that between the monetary and fiscal stimulus on offer so far and historically low oil prices, Britain’s economy will have favourable conditions when it’s allowed to get up and running again.

But there is one big caveat: this modelling assumes that Covid-19, in historical terms anyway, is a short-lived phenomena which is tackled fairly quickly. This supposes that the Prime Minister’s estimates of ‘12 weeks’ to ‘turn the tide’ on the virus are largely correct, and we can crawl back towards normal economic activity in the second half of the year. In truth, no one knows how long this will last. This is an unprecedented situation, and a lot of the companies that will collapse during the crisis wont come back.

Oxford Economics notes that its previous studies regarding the impact of pandemics on the economy show that activity is ‘delayed’ rather than ‘destroyed’, which supports the V-curve narrative, that we can spring into action as soon as the immediate threat of the virus is eliminated. But just as this is not a normal recession, it is also not a normal pandemic. Most pandemic modelling is about flu (and it factors in a vaccine arriving in six months) but Covid-19 is not the flu, and a vaccine could be 18 months away. Nor do we know if Covid-19 will come back in a second or even third wave, as Spanish Flu did. In the worst-case scenario, it could mutate, making our public health response far more complex and expensive. There are many, many other variables.

But variables could work in our favour. A test to discover if a person has had Covid-19 (and should then be significantly more immune) looks to be delivered imminently: a test to see who has antibodies might release workers back into the economy more quickly.

So: still much uncertainty. But I suspect Oxford Economics will be the first of many forecasters to predict a V-shaped recovery.

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Written byKate Andrews

Kate Andrews is The Spectator’s Economics Correspondent

The UK is angry, and Labour is about to be annihilated.

Let us not waste any time gloating, but thank god the people of the UK can be trusted to see the truth. Able to ignore the constant preaching of the Block Brexit Corporation, BBC. It makes you proud doesn’t!

Hang on, what was that loud bang in the BBC studio? Huw Edwards looked concerned. Pop! It was the sound of the London metropolitan bubble bursting.

image elec noight 2019

I knew we could count on the incredible common sense and the hard-working, endeavours of the SME community across the UK. Now can we get on with growing our businesses, contributing in just a small way to the overall economy? You know the one that generates all the wealth, that pays all the taxes.

 You know that employes all the workers, that use all the public service. The ones that we want to see supported by a consumerist buying, hardworking, tax-paying population. 

(more…)

I have felt for many years that we are all guilty of letting life pass by while we communicate with no one.

When I was a child people were concerned that too much time in front of the telly was bad for our health, ‘you’ll get square eyes,’ was the cry!

Now we face a new challenge, mobile devices, the smart phone, our ability to be always connected. It’s worse than just the time lost or the risk of not valuing our time effectively. It’s the damage to us as humans. I’m not saying people were right to warn of, square eyes, I’m commenting on the damage to society.

This leap in our ability to easily communicate is harmful to the human art of communication. (more…)