Rishi Sunak is to extend furlough. That's already been announced as part of the budget. It is now likely to last until September. There are two things to say.
First, in that case, do not believe that the government thinks Covid 19 will all be over by June. I note this tweet this morning from the Health Services Journal:
NEW: NHS in London asked to plan for ‘possible covid surge later in 2021' https://t.co/p9raMBamj2
— Alastair McLellan (@HSJEditor) March 3, 2021
I have been told that 'later in 2021' might mean July. Given what is planned, which is guaranteed to increase R in a largely unvaccinated, or at best half-vaccinated population, that seems entirely plausible to me. I think it likely that furlough is going to be needed along with many other measures.
Second, Politico explains the new plan like this in their morning email briefing (which is worth subscribing to):
Between now and June 30, the government will continue to pay 80 percent of wages for furloughed workers up to £2,500 a month. From July 1, the state support will taper off, with the government then paying 70 percent of wages up to a cap of £2,187.50, and employers covering the rest. From August 1, the government will pay 60 percent of wages up to £1,875, with employers having to pick up the remaining 40 percent.
So, just as people can't return to work, and just as their employers feel increasing stress because they cannot reopen as they would wish, the government is calling on those most hard-pressed of employer's to pay more of their employee's wages which, of course, they will not be able to afford to do because if they could they would have those people at work.
To put it another way, this is a car-crash for unemployment in the making. A massive jump in those out of work is coming unless this is changed before July.
I think a lot will change before July. I may be wrong. I hope I am. I fear I am not.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
Owning small business myself, the extended furlough is very welcome. I have been also receiving good grant support through local and national lock down payments as well as business rate grants, which I have to say have been very generous. So anecdotally I cannot see what else the Chancellor could have done for me and my business thus far. No doubt he will extend this if necessary as he has done twice already.
I know may have fallen through the cracks and there is much criticism from the newly self employed, as you would rightly expect. But there will also be a silent core that have had the support they needed so far.
My only quibble is the step down clauses on furlough(10 %, then 20 % reductions for Aug and Sept) he loves to throw in for the last 2 months of furlough,to me that seems to spoil the ship for a ha’ pence of tar. …..many staff are existing on 80 % wages and a lot of those are on minimum wages, so in effect the Govt is breaking its was own employment laws for those employees.
On a totally ironic aside, I see the discredited “austerity” economist(and hero of George Osborne) Ken Roggof saying today that the this is not the time for the Chancellor to raise taxes or pay down the national debt…without so much as a blush!!!
Quoted in todays Guardian, about his conversation with Rish Sunak.
“We’ve spoken once and, certainly at the time, and I’d say it now, we are in the middle of a war and you should not be worrying excessively about the budget deficit and about debt.
You can worry about that at the other side.
We are looking at catastrophe relief and we really need to be cautious about scaling back – the government is very much needed now.”
Roggof is one of the most frustratingly inconsistent economists of our time. I heard what I
he said too, and he is right – although he still has lot to do to make up for his gaff about the much over-hyped crowding out of the private sector by the public sector.
That crap creates two sectors who never apparently mingle!!
If that is the case, why is it that I as a public sector employee and my colleagues spend a considerable amount of time and money procuring bloody private sector services to build affordable homes and provide other services!!!
Tosh – complete tosh.
PSR,
Divide and conquer is an old strategy, have half the people at each others throats and they miss the bigger problem.
Kool- Aid time with 4 per cent growth forecast in 2021, and 7.3 in 2022. As John McEnroe would say… surely you cannot be serious?
🙂