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On the day after Boris Johnson’s statement, we convened a very CBI panel to discuss what it means for business. There was our Director-General, Dame Carolyn Fairbairn, and our Deputy Director-General, Josh Hardie. Here are the main subjects they alighted on:
- A change of tone – and a glimmer of hope
- The imminent safety guidance
- Where the CBI agrees and disagrees with the unions
- Evolving the economic support measures
- The other enablers.
A change of tone – and a glimmer of hope
Boris Johnson’s statement last night was, said Carolyn, “another real landmark moment”.
Of course, it wasn’t perfect. “We could all find fault with the communications,” Carolyn added, “and there are some things that need to be filled in”. In fact, that filling-in process should happen over the next few days – with the “50 pages of detail” that are being submitted to Parliament today, and with the separate publication of the guidance for businesses looking to reopen.
But the statement was “the first glimmer of a possible roadmap for reopening the economy”. While it emphasised caution and the avoidance of a second spike, it did contain more dates than we might have expected – even if some of those dates are only provisional.
The first of these dates, Carolyn explained, is this Wednesday; when people who cannot work from home – with a particular emphasis on construction and manufacturing – are being encouraged to return to work, so long as proper safety measures are in place. “This is an important change of tone,” added Carolyn. “The CBI has welcomed that.”
The next date is 1 June, which is when – depending on various health considerations being satisfied – primary schools might start to be phased back in.
And the other date is early July, which – again, dependent on epidemiological factors – is the earliest point at which “some hospitality and public spaces” could be reopened. Carolyn described this last date as a particular “surprise”.
Now that there is a possible roadmap in place, the CBI wants to avoid confusion. “It can be sensible that some regions act differently,” said Carolyn, talking about the way in which the Welsh, Scottish and Northern Irish administrations have responded to the Prime Minister’s statement. “But what we don’t want is a disagreement of philosophy…. The more people hear different messages, the more they will question what’s happening.”
The CBI will continue its conversations with the devolved governments, in order to make things as clear as possible for businesses.
The imminent safety guidance
“Personally,” said Carolyn, “I think it would have been good if the safety guidance had been published before last night – but we do think it is imminent.” In fact, it’s possible that the guidance will be published tomorrow.
As the CBI has been involved in its formulation, and saw draft versions last week, we already have a good idea of what to except: seven sets of guidance for seven different work settings – including offices, factories and the outdoors – each running through the same categories, from PPE to workforce management.
By following the guidance, and adapting it to their own particular situations, businesses should be able to become – the new word that’s being used – “Covid-secure”.
As Carolyn explained, there were some gaps in the draft guidance that we hope will be filled in before tomorrow – for example, the sections on PPE were simply “missing”.
But there are also some more general gaps that will need addressing in time. “We think creative industries are still not properly accounted for,” said Carolyn.
Where the CBI agrees and disagrees with the unions
Through the crisis, the CBI has been working very closely with the Trades Union Congress (TUC) to help protect businesses and employees through the lockdown and the restart. In fact, as Josh explained, Carolyn talks to her TUC counterpart, Frances O’Grady, on a daily basis, while Josh does likewise with his counterpart. There have been many important areas of agreement.
The TUC responded to the prime minister’s statement overnight – and, as Josh put it, some of their response was “a bit spiky”. He highlighted three of their concerns in particular:
- That there’s too much ambiguity for a quick return to work.
- That the guidance says too often that “businesses should consider”, rather than that “businesses must”.
- That there should be a central, comparable database of risk assessments – with each business publishing theirs.
The CBI sympathises with these points; although, on the first, Josh pointed out that the reopening is “more gradual… not a flicking on of a light switch”; and, on the second, he added that “there does need to be flexibility” for businesses to follow the guidance in ways that work for them.
The third point is the one that the CBI is most concerned about. “Risk assessments are critical,” said Josh, “but we’re cautious of a central comparison because risk assessments do different things for different businesses… and it could be a mischief-makers’ charter to compare them.”
As Josh said, the conservations will continue: “We are talking to the TUC every day, sometimes every hour, to find that middle ground.”
Evolving the economic support measures
We are, Carolyn pointed out, “coming up to another cliff edge” with the Job Retention Scheme (JRS). The scheme’s current termination date, at the end of June, means that employers might soon need to start thinking about redundancies if they are to satisfy the statutory 45-day consultation period.
Carolyn said that this, and the restart in general, brings three considerations into stark relief. The first is, of course, extension beyond the end of June – which would mean that employers don’t need to think about redundancies now, and might hopefully be able to avoid redundancies entirely. The CBI “would like to see [the JRS] extended through to the end of September”.
The second consideration is “partial furloughing” and allowing people to return to work on a flexible basis.
The third is the “tapering down of the 80% [government support for wages]”. As Carolyn explained, the CBI understands the importance of this scheme to businesses, but also its expense to the Treasury. We are particularly focused on the issue of co-payment – businesses topping up the government’s contribution to employee wages – as “supporting jobs that do have a future” is crucial to ensure that the scheme works as it should and lasts for those who need it.
Carolyn spoke to Rishi Sunak, the Chancellor, about these issues over the weekend. She revealed that “tomorrow might be the day when we hear the next steps” – in any case, it should be soon.
The other enablers
The prime minister’s statement mentioned primary schools. “There is a logic to thinking about primary schools first,” said Carolyn – including the fact that “many people in retail have very young children, so this will be one of the ‘unlockers’ for that”.
As for how those schools are returned, Carolyn suggested that the government’s current plan – some year groups going back ahead of others – is “easier” than many of the alternatives, such as “going back for a couple of days a week” or “a patchwork of hours”. But she added: “All of these are compromises.”
Josh spoke about one of the other crucial enablers: public transport. Some estimates have capacity at 20%, he said, and “until a vaccine is available, or testing, [that situation] is going to be with us for some time”. The best answer for now, he continued, is “engagement with employees” – “working from home, staggering shift times… these are all tools at our disposal”.
There is another enabler – testing and PPE – for which we still need “more clarity”, said Josh. “That is a big missing hole in the guidance. [The detail] needs to come today.”
Key questions we answered:
- Carolyn, in response to what the PM said last night, what’s the latest on the government’s guidance to businesses to help them reopen/work safely?
- We are expecting guidance on how to make workplaces Covid-secure, this week. It would have been helpful to have in advance of the PM’s announcement.
- Many businesses have told us that they have already started to implement these steps and more – drawing on their own and others’ lessons learnt in lockdown, and working in close collaboration with staff, unions, health experts, etc.
- Crucially, the government recognises that the guidance will need to evolve as events develop, businesses start to implement measures, and we gain more insight from firms on the ground.
- We know the spotlight will be on core enablers – PPE & testing, schools, and transport – in the coming days and weeks.
- As Grant Shapps confirmed on Saturday, even if the UK transport network is running at full capacity, social distancing measures mean potentially only one in 10 passengers can travel in some parts of the UK.
- So, if you can work from home, continue to do so – to avoid possibly taking the spot of a key worker or someone who has to travel in to work.
- On PPE, we know many businesses are concerned there won’t be enough PPE for those who really needed. Public Health England recommend PPE should not be the first option for protecting people. Businesses should focus first on activity like social distancing; hand washing; and reducing the frequency and number of contacts their employees engage with.
- We also need clarity around the legal status of the guidance. Firms want assurances that if they follow the government’s guidance to letter, that this protects them from legal challenges and helps build confidence to reopen.
- We also need to ensure a clear, consistent approach across the nations.
- Josh, what do we know about enforcement so far? And what advice can you give on how businesses might work with their employees and customers on this?
- There is still a big debate around enforcement. The TUC’s initial reaction was that they do not feel like the draft guidance goes far enough. Business can’t be allowed to ‘mark its own homework’. And, we currently don’t know how strong role the of HSE will be.
- The truth is, that yes, guidance is essential to give businesses the detailed advice they need to open and operate safely. But at the heart of all of this, is the fundamental truth that unless you secure the confidence of your employees and customers to come to work or shop, the whole thing will fall down.
- We’ve seen this happen in other countries, where – without necessary reassurance and close collaboration – employees have refused to come back. Above all else, the restart needs to be built on the partnership between businesses and workers.
- Getting the UK back to work will minimise the impact on livelihoods from a crisis that has shaken the global economy. But business recognises above all else, that it must be done gradually, based on science, to avoid a devastating second wave and retain public confidence. Moving too far, too fast could set back the economic restart.
- We really are in this together, and only through close collaboration – can we begin to build back better, setting out a vision for the future of our economy based on fairness and sustainability.
- Do you know what Labour’s position on the restart is? And how do you think the unions and other important stakeholders will react?
- Last week, Labour published their seven principles for the restart, including:
- Keep people safe
- Mass expansion of community testing and tracing
- Protect key and essential workers
- Structured approach to lifting restrictions
- Support peoples’ livelihoods, jobs and businesses.
- Keir Starmer has also spoken about the need for greater flex in the Job Retention Scheme to support those firms looking to gradually reopen.
- We’re in regular conversation with Keir and his team, and we also have a strong relationship with the TUC.
- Carolyn, we know that many businesses are still struggling. So, what does the PM’s statement mean for the government support systems currently in place, such as the JRS, and how they might need to evolve?
- As of midnight 3 May, 6.3m jobs have been furloughed through the JRS. 800,000 employers are furloughing staff, and there’ve £8bn in claims.
- This is an unprecedented level of support, so all eyes are now on how it evolves.
- The CBI is hearing from all businesses that a more flexible system would help accelerate their transition to the ‘new normal’.
- Her Majesty’s Treasury has already confirmed there will be no cliff-edge in support, with the deadline to consult staff on potential redundancies this Friday.
- Next, Trade Credit Insurance, has been used by almost 14,000 firms across UK (and impacts many more in supply chains). This is essential to the restart. But availability of this kind of specialist insurance is shrinking daily. Without government action, it could dry up completely.
- On access to finance, the latest CBILS figures show £5.5bn has lent to SMEs, and just under £1.4 billion worth of loans were provided in the week from 29 April to 6 May.
- In addition, the British Business Bank has also approved ten more lenders for accreditation under the CBILS scheme this week, bringing the total number of accredited lenders to 63.
- We’re also calling for non-bank lenders to be able to deliver these schemes, as well as the Bank of England Term Funding Scheme.
- The other big story has been the Bounce Bank Loans Scheme. This saw huge demand, with over 69,000 loans approved in the first day. The seven largest lenders (Barclays, Danske, HSBC, Lloyds, RBS, Santander and Virgin Money) received more than 130,000 applications on the first day of the scheme (4 May).
- But we know some issues are outstanding, such as the concern that some businesses are treating them as grants not loans. We’ve also heard from some businesses highlighting the issue of share capital, i.e. you’re not eligible for a BBB loan if your business losses are more than 50% of your share capital.
- Will the government publish a list of businesses that can look at going back to work?
- If you haven’t been told to be closed, and can open safely, you should now start getting ready to open safely.
- I would advise that businesses look at how their processes can be adapted to ensure the safety of their workforce.
- Carolyn, what do you think will be the future of the furloughing scheme?
- I had a conversation with the Chancellor over the weekend about the furloughing scheme.
- As we head into the recovery stage, it is vital that partial furloughing comes into force and people can come back to work on a flexible basis.
- At the end of June, the scheme runs out, so we are hoping to hear news about an extension soon.
- If a business is able to go back to work, will they no longer be able to access the furloughing scheme?
- I don’t think this is the case. For example, if you are a retailer, you will have to come back to work with social distancing and a much lower footfall through your store. So, the logic is you may want to bring some people back on a part time basis.
- The idea of there being a furloughing system to run alongside partial reopening is a powerful one. That is what we are arguing for.
- We would like to see the scheme extended through to the end of September.
- I also think there needs to be a recognition of cost. This is costing the Treasury £10bn per month. But it is a success. Having a scheme that evolves through the cautious reopening, working in step with its progress, is essential.
- Finally, we do not want to protect jobs on the public purse that do not have a future.
- What is your view on what the best step forward for businesses in communicating the difficulties they will have on public transport?
- We know that public transport will be running on up to, in some cases, 25% capacity.
- So, employers have to talk to employees. We know that new transport methods are being constructed, such as extra pop-up cycle lanes etc.
- But in those conversations employers have with employees, we consider methods we have mentioned before – i.e. staggering shift times, working from home where possible etc.
- We want more in the guidance on this. We will have to be agile and innovative around this for some time to come.
- On testing and PPE, what do we expect the government’s guidelines to be on the testing and healthcare of employees?
- It is the big missing hole in the guidance.
- More testing is being made available to key workers when they show symptoms. But that needs to be expanded.
- On PPE, businesses do not want to risk cannibalising stocks from NHS workers who need it. We’re hoping for further clarity on this over the next few days.