Watch the webinar
Today’s webinar took the form of a conversation between Carolyn Fairbairn, the Director-General of the CBI; Josh Hardie, our Deputy Director-General; and Councillor Ian Hudspeth, the Leader of Oxfordshire County Council and Chairman of the Local Government Authority’s Community Wellbeing Board. Here are the main subjects they discussed:
- What happened at the weekend
- An important change in government thinking
- What we’d like to see in the Chancellor’s statement
- From local lockdowns to micro-lockdowns
- What local businesses need from government.
What happened at the weekend
It was billed as “Super Saturday” – the moment when various businesses, including pubs and restaurants, could emerge from lockdown.
There were some fears, in advance, that it might turn out to be rather less than super. As Carolyn observed: “There was real concern that it might be a repeat of Bournemouth beach, with people packed close together. There was a bit of that. A bit of pent-up demand.”
But overall, she continued, “it went really well”. There were thousands of examples of businesses and customers behaving responsibly – or, as Carolyn put it, “I saw Perspex all over the place, a real attempt to manage the social distancing”.
This effort was helped by some clarification over the “tricky issue” of certain businesses having to register their customers – which is to say, gather basic information about those customers for the purpose of contact tracing.
Carolyn described some of these clarifications, including that it is the “responsibility of the [customer], not the business, to make sure that the information is accurate,” and that “businesses have to keep the data for 21 days and then destroy it, without using the data for other purposes”. There is also now a “useful checklist” on the Information Commissioner’s website to help with the process.
But, Carolyn also emphasised, “challenges remain around the reopening”. One of these is “business concern about liability” – who is and isn’t responsible in the case of an outbreak?
And we also need to accept “a dose of realism” about who can and who cannot open at the moment – many hospitality businesses, for example, were still closed at the weekend.
A change in government thinking
Today brings news of the government’s new £1.6 billion bailout for arts organisations, such as theatres, museums and gig venues. Much of this comes in the form of grant funding.
“It is fantastic to see this lifeline to the arts,” said Carolyn. “It is a fantastically important industry for the country – and fantastically important to our way of life.”
But there could be an even broader significance to the announcement. “This is the first big sectoral intervention we have seen from this government,” explained Carolyn. So far, the main support packages – such as the Job Retention Scheme (JRS) and the Coronavirus Business Interruption Loan Scheme (CBILS) – have been “pan-economic”. Now we have a support package targeted at a specific sector.
“I think it won’t be the last one we see,” continued Carolyn. There are other sectors in need, including hospitality and universities – “one of the signals that we might read into the future” is that they could receive specific funding, too. For its part, the CBI would “welcome” this development.
The Chancellor’s statement
Rishi Sunak will make an important economic statement on Wednesday, which is expected to contain new measures to help with the recovery.
The CBI is clear about what we want from this statement: “It needs to be focused on jobs,” said Carolyn. Happily, many of the policies trailed in the weekend papers were “in some way related to jobs” – and bore resemblance to recommendations that we have made. These included: “some form of continued wage subsidy”; “using Jobcentres far more powerfully”; and “something that really does stimulate apprenticeships”.
There was also a “novel idea”, which Carolyn described as “helicopter money for the first time in the UK”. If implemented, this measure would hand vouchers to the public, which they could then spend with particularly hard-hit businesses, such as face-to-face retail. “It would certainly be a demand boost.”
But the CBI is pushing for more, particularly when it comes to jobs. France and Germany have recently extended their equivalents of the JRS for another year, whereas Britain’s ends in October. “We don’t think that the JRS as such needs to be rolled forward,” said Carolyn, “but there does need to be targeted intervention… for those that can’t open, like hotels, tourism and the arts.”
Carolyn also called for “some sort of wage subsidy scheme to create jobs”. This could be modelled on the Future Jobs Fund that was launched in the aftermath of the 2008 financial crisis.
From local lockdowns to micro-lockdowns
Leicester – and its ongoing, localised lockdown – came up throughout the discussion. Josh began his remarks by expressing “massive sympathy for those people, those businesses in Leicester…. We simply cannot afford local lockdowns leaving lasting economic damage on those locations.”
So how can this damage be prevented? Well, “prevention” is the word, said Josh – the best approach is for localities, including businesses, employees and customers, to follow the Covid-secure guidelines and stop the disease spreading.
However, where outbreaks do occur, the next best approach is containment. Both Josh and Ian raised the possibility of what might be called “micro-lockdowns”. These are lockdowns over, as Ian put it, “a very small area; in fact, if might just be a building rather than whole communities”.
Test & Trace is crucial to achieving micro-lockdowns. If outbreaks can be identified swiftly, then they can be isolated to the smallest possible area.
But identifying outbreaks swiftly has been difficult so far, explained Ian: “One of the key things we need [at a local authority level] is good-quality data and real-time data.... But we’ve been getting bulk data, about a week down the line.” The faster that testing data can be supplied to local agencies, the faster they can identify outbreaks, and the smaller any potential lockdown.
Josh echoed this sentiment: “If you get that Test & Trace system really flying, you almost shift the philosophy –from the old philosophy where you have to assume [that Covid-19 is] everywhere so everywhere needs to be shut down, to a new philosophy that we know where [Covid-19] is so everywhere else can stay open.”
What local businesses need
Businesses in local lockdowns, such as Leicester’s, need specific help from central government, including continued economic support. “The starting point,” said Josh, “needs to be: what was available last time? Because the circumstances will be the same.”
Of course, Josh continued, some of the previous support measures may not work in a localised context: “It may be the case that local furlough schemes are too complicated to set up.” But, in that case, those measures should be refined so that they “reach the same end” – which is to support businesses with the costs of lockdown. “It is cheaper, more sustainable, to support them now than to deal with the job losses later.”
As well as economic support, businesses also need clarity about what happens in the event of a local lockdown – although, in many areas, that clarity is sorely lacking. Ian explained that the distinction between essential and non-essential businesses has not yet been worked out for local lockdowns: “It’s gone up to a COBRA [i.e. national government] level.” Josh added that there is still “ambiguity” about whether people can move between locked-down and not-locked-down regions.
“We don’t have anything like enough clarity at the local level yet,” said Carolyn, summing up the situation. “I think this is a big role for [the CBI], working with government to get clarity. And we’ve got to do it quickly – because we’ve got to get good at this.” There will, after all, be more local lockdowns in future.
Key questions we answered:
- Carolyn, can you tell us about today’s intervention on the arts, what the CBI thinks about its scale, and what it means for the wider economy?
- £1.5bn in emergency support is a very big intervention, especially as much of it will come in the form of grants for the industry
- It is a fantastic lifeline, both for the UK economy, but also for people’s quality of life
- Equally important is that this is the first big sector deal that has been struck by the government, marking a move away from the government’s approach that has so far been focused on providing support through packages (such as CBILS) that have had a whole-economy scope
- This will be very important for sectors such as the Universities and hospitality that will desperately need targeted sector-based support in the months to come.
- Carolyn, the Chancellor of the Exchequer’s statement is coming on Wednesday, what are we expecting from this?
- The Chancellor will be setting out the government’s immediate plan to support economy through first phase of recovery
- There have been reports over the weekend of a possible voucher scheme to help boost demand in sectors of economy hardest hit, as well as investment in thousands of additional work coaches in job centres
- The evidence is clear that, based on past recessions, the impact of joblessness is deeply uneven. We need a jobs-first recovery, with focus on driving sustainable, inclusive growth
- Other ideas from business include further wage support to protect jobs, a new jobs programme to create opportunities and more funding for future skills in areas, such as digital, low carbon and health
- Longer-term plans will falter without continued help for firms still in desperate difficulty. We have set out what businesses would like to see from Chancellor’s statement this week, and Rain will cover this in more detail on Wednesday’s webinar
- Some of those ideas include extending grant support schemes for SMEs via local authorities; extending Business Rates relief in England to mid-sized businesses in all sectors for next three months; and extending the deadline for the Coronavirus Business Loan Scheme beyond September for a further three months.
- Carolyn, the October cut-off of the Jobs Retention Scheme (JRS) is now pressing for many businesses. Given that in other (EU) countries steps have been made to extend payment support schemes, what should the UK government be looking to do after this date?
- October is looking very soon for businesses across the country – and the beginning of making contributions in August is even closer on the horizon
- France and Germany have extended their programmes for a year
- But, in the UK, we don’t necessarily need a continuation of the JRS as such, but rather a more targeted system
- The JRS should remain available in some form for those sectors that can’t open. However, much of the government’s focus should now be on creating new jobs that will more closely suit the demands of a changed economy.
- Ian, what are the lessons you have learned from the experience in Leicester?
- Local government is the key driver for supporting local economies. All councils have their own infection control plans and are working with other authorities to implement them
- In Oxfordshire, we have a two-tier system where the county council works with the city and district councils to implement a coherent strategy
- The key thing that’s needed is good quality data on the spread of the virus, provided in real time – not bulk data a week later. If we have this information, we can spot surges in infection locally early on, instead of having to rely on imprecise readings of national trends
- Then we can work with businesses to ensure that they can stay open
- Only with data at a truly granular level can councils, public health authorities and businesses work together and respond quickly to outbreaks, ensuring that alternatives are found to lockdown. This could mean the partial closure and isolation of the staff of a specific company.
- Josh, what is the CBI’s initial thinking on local lockdowns and what the reaction has been from businesses on the ground?
- The initial concern after Leicester has that businesses simply cannot afford another lockdown
- Especially when lockdown measures will be implemented in specific local areas, such as in Leicester, there is a real danger that there will be more lasting damage spread unevenly across the country – something that will run strongly against the government’s aspiration for ‘levelling-up’
- The government has laid out a plan for dealing with outbreaks on a local level based on the central government monitoring data as it comes in, sharing that data with local government and collaborating on next steps
- Businesses would now welcome detail.
- Ian, what’s the role of test and trace in this?
- The main thing will be doing this on a factory, business and street level, making sure that knowledge of the spread of the disease is truly local
- In Oxfordshire, we’ve got lots of laboratories that can together deliver testing very quickly. Once we’ve got the results, we’ll need to push ahead with micro-lockdowns
- We need to have this level of testing infrastructure in place across the country, so that on a local level people have the confidence to go out and spend money to get the economy going
- [Josh Hardie] To keep the economy going we need to move away from the old philosophy of disease control where it is presumed that the disease could be everywhere, to a new one that uses data on local spread to perform much more targeted shutdowns.
- Ian, we’ve heard discussion of Local Resilience Forums (LRFs) – what are they and how should businesses reach out to them about plans for local lockdowns?
- LRFs are combined groups bringing together all local agencies to tackle the disease at a sub-national level. For example, in the Thames Valley we work with other councils, public health authorities, Local Enterprise Partnerships (LEPS), the police and emergency services
- They are the stopgap between central government and local decision-making
- Businesses should reach out to them through their local LEPS
- To be more effective, it will be essential that more businesses are aware of LRFs and know how to reach out to them
- For example, LRFs can help businesses plan PPE supplies through regional distribution channels.
- Ian, what do you think is the most important thing that should be done to ensure successful local containment of coronavirus?
- The most important thing is that any decisions that are made are clear and transparent, as well as clearly communicated to the businesses that will be acting under them
- Central and local government leaders need to build the capacity to share data to reduce risks of local outbreaks escalating, as well as to explain why micro-lockdowns are being put in place
- Local government can’t be faceless in enforcing these lockdowns, but needs to be accessible to business. Business owners shouldn’t be afraid to ask local government about outbreaks, what they mean for their business and how they will be contained.