Watch the webinar
- James Harding, Co-founder and Editor, Tortoise Media (Chair)
- Dame Carolyn Fairbairn, Director-General, CBI
- Anneliese Dodds MP, Shadow Chancellor of the Exchequer
A CBI update on the implications of the new measures
This is a very challenging situation for both individuals and businesses. Businesses understand that getting the R rate down is crucial, and this is the best way to avoid a second, devastating national lockdown. But it’s still a crushing blow. For example, the curfew will hit hospitality businesses hard, and the return to working from home will put the fledgling recovery of city centres into reverse. But, as Dame Carolyn Fairbairn, the CBI’s Director-General, added, the six-month timeline – despite being a big shock – at least gives businesses some certainty and the ability to plan.
The importance of an economic support package
The most important thing now, Carolyn believes, is clarifying the business support schemes which will help get businesses through this latest phase. And the CBI has been working with the Treasury to try to solve this issue. Businesses need a successor to the Job Retention Scheme (JRS) to stave off the cliff-edge when the scheme ends at the end of October. And as Carolyn said, “cash is king” – so there needs to be more cashflow support for businesses, such as the deferral of Q2 VAT payments, and extending the business rates holiday.
And Anneliese Dodds MP, Shadow Chancellor of the Exchequer, shares Carolyn’s concerns on the support that businesses need now. As public health measures are introduced, economic support needs to come too. Anneliese added that she feels the government has consistently lagged in introducing these support measures alongside new public health restrictions. But, crucially, Labour are backing the new restrictions.
A need for a new, targeted job retention scheme
Anneliese confirmed that she wants the government to continue and accelerate discussions with business groups, such as the CBI and the TUC, around the future of the JRS. Labour doesn’t have a specific proposal for a new scheme, but they feel whatever is put in place needs to be targeted – rather than generalised – and could include some incentivisation and conditionality.
Building on this, the CBI have already submitted their proposal for a new scheme to the government. Carolyn confirmed that the basis of the CBI’s proposal has a similar focus to Labours, in trying to protect viable jobs for the future. Carolyn feels the best solution is a part-time scheme, where the employee receiving a government subsidy must work at least 50% of their hours. The remaining salary will be split between the employer, government, and the employee. Carolyn isn’t necessarily convinced on Labour’s proposal for conditionality however, as this could make it harder for employers to use it at such a vital time. Key to the CBI’s proposal is that the scheme needs to be open to all firms, not just those who previously used the JRS, and also that the scheme should have a set timeframe – ideally a year – to give businesses certainty.
Sadly, we won’t be able to protect every job, and this process is likely to be painful. But we can put in place targeted support to protect viable jobs.
Unemployment and training
When it comes to retraining, businesses need support. The government has already committed £3bn to skills, but we need this funding right now. We need to be building capacity in further education, adult education and the jobs network so we can link the unemployed into available opportunities. The scheme that Germany is using incentivises retraining, so perhaps this is something the government should look at. But schemes like this work best when they’re operated in conjunction with strong local and regional networks.
Anneliese added that considering the urgency, we can’t look at big institutional change right now. Instead, we need to focus on improving the structures that currently exist, to make sure they’re ready to deliver at the necessary scale required.
How to improve testing
We know there are many bottlenecks in the testing system, coupled with a huge increase in demand. Carolyn believes there are three things that need to happen to improve testing. Firstly, the government needs to decentralise the system and bring in capacity and expertise from the private sector and universities. Secondly, we need a testing scheme that focuses on proving people are healthy, rather than just proving they’re sick – so these people can go about their lives in a more normal way. Finally, Carolyn added, the lack of airport testing is a “tremendous blight on our economy” – and the sooner we can get this up and running, the better.
Anneliese added that, while we have the innovation in the UK we need to overcome these challenges, it’s transparency around the logistical challenges which is lacking. The government are saying the system is working well, but the experience of many on the ground is different. We need to grasp the logistical challenges and fix them, as we’ll face the same questions around vaccine delivery if one is approved. We need to be planning now so we don’t end up with the same problems.