Ahead of speeches from the Prime Minister and the Chancellor, the CBI has been engaging across Whitehall, calling for the government to prioritise jobs and training for the young to drive UK-wide recovery, and to get ahead of the economic curve with next wave of support.
In addition to the focus on the economic recovery, the CBI has also been urging policymakers to provide firms with greater clarity following the first local lockdown announced in Leicester last week.
Rishi Sunak sets out the government’s plan to support, create and protect jobs
This week all eyes were on the Chancellor, Rishi Sunak, as he announced further plans to protect jobs, following unprecedented levels of support through the Job Retention Scheme and Bounce back loans announced back in March.
Prior to the Chancellor’s statement, Mr Sunak joined the CBI’s President’s Committee to hear directly from CBI members about how the government’s support had been a lifeline to many firms around the country. Further to joining the CBI’s President’s committee, the CBI also wrote to the Chancellor to stress the need for urgent action to be taken to protect jobs now and in the future.
In the statement, the Chancellor announced the Job Retention Bonus which seeks to encourage firms to keep furloughed workers in employment with UK firms receiving a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021.
Mr Sunak also launched a new £2bn Kickstart Scheme with the aim of creating new jobs for young people across the country. For those eligible, funding will be available for each six-month job placement with the Government covering 100% of the National Minimum Wage for 25 hours a week. Employers will also be able to top this wage up.
The Chancellor also announced plans to create tens of thousands of jobs by bringing forward work on £8.8bn of new infrastructure, decarbonisation and maintenance projects, including a £3bn green investment package that could help support around 140,000 green jobs and upgrade buildings and reduce emissions. This job creation package also included the Green Homes Grant, a £2bn grant to encourage homeowners and landlords to make their homes more energy efficient and a temporary Stamp Duty Land Tax cut.
And finally, the Chancellor announced measures to stimulate demand in the hospitality and tourism sector with a targeted VAT cut and through an imaginative Eat Out to Help Out discount scheme that will provide a 50% reduction for sit-down meals in cafes, restaurants and pubs across the UK from Monday to Wednesday every week throughout August 2020.
With many of the announcements reflecting key CBI priorities, Carolyn welcomed the Chancellor’s focus saying that it was right to prioritise jobs in his summer statement. But with viable firms facing maximum jeopardy right now and with nearly 70% of firms running low on cash, and three in four reporting lack of demand, more immediate direct support for firms, from grants to further business rates relief, is still urgently needed.
With the CBI highlighting the need for the Chancellor to continue to balance the need to invest in a long-term, sustainable recovery while responding to the urgent challenges that companies are experiencing today, the CBI will be continuing to engage with the Treasury to help prevent a long-term economic crisis and protect jobs and livelihoods.
Prime Minister sets out vision to ‘build, build, build’
The Chancellor’s statement followed the Prime Minister’s speech last week (30 June), which announced plans to accelerate infrastructure projects and push forward on government’s ‘levelling up’ agenda.
Measures announced by the Prime Minister included £5bn for infrastructure projects, new regulations to give greater freedom for building development and ‘opportunity guarantee’ for every person to have an apprenticeship or in-work placement.
In the CBI’s response to the speech, CBI Director-General, Carolyn Fairbairn, welcomed the boost to infrastructure investment and recognised that it could help limit economic impact of pandemic. Carolyn went onto highlight that these foundations are there to be built on and that more is needed to prevent the uneven scarring unemployment leaves on communities.
Following the speech, the CBI has been in close contact with the Prime Minister’s Business Adviser, Alex Hickman, as well as Treasury officials to highlight the business response and share insight. The CBI is continuing to engage in order to shape government thinking.
Seeking clarity for businesses on local lockdowns
And while the Prime Minister’s speech took place in Dudley, to the east, in Leicester, last Monday (29 June) the Health Secretary, Matt Hancock, announced the first local lockdown in the UK which has resulted in stricter measures imposed in the city including non-essential retail closing.
The government will review the situation on 18 July but in the meantime the government is supporting Leicester with additional mobile testing units and a walk-in centre as well as extra funding to the council to enhance communications.
Since the lockdown has come into force, businesses based in the Leicester area have told the CBI about the confusion that quickly arose following the imposition of the lockdown. Similarly, the sudden introduction of lockdown caused additional distress for some firms – particularly those in leisure and hospitality who were gearing up for the imminent easing of lockdown restrictions in England. Going forward the CBI is seeking greater clarity for the business community about how local lockdowns may be utilised and the support for firms made available.
The Prime Minster has since confirmed a shift from blanketed, national measures to more targeted, localised support – focusing on specific local premises or areas. This approach will see a five-step process that will be followed for future local outbreaks, these steps include monitoring, engaging, testing, restrictions and if the previous measures are not enough, there will be local lockdowns across whole communities introduced.
The CBI will be continuing to work with the Department of Health and Public Health England to ensure ahead of any future lockdowns, communication is clear to the public and businesses with regards to what they should do and what help will be available to them. Further to communication, the CBI has been emphasising the need for a consistent approach across England so firms know what to expect, can plan accordingly and protect their staff. Ultimately, maintaining public confidence and support for reintroducing restrictions requires crystal clear and constant communication with all those affected well in advance.