Developing a successor to the Job Retention Scheme
Since its creation on 20th March, the Job Retention Scheme (JRS) has been a lifeline for thousands and firms and millions of workers, helping minimise levels of unemployment as the economy responding to the immediate impacts of the COVID-19 pandemic. However, with the scheme set to wind down on 31st October, many firms still facing an uncertain future and cashflow pressures mounting, the CBI’s calling on government to work with business to develop a targeted successor to the JRS.
In tandem with working-level conversations with key government departments, CBI Director General, Dame Carolyn Fairbairn, met with the Chancellor, Rishi Sunak, to brief him on the proposals for a new, semi-permanent short time working support scheme. During the meeting, Carolyn outlined the need for the new scheme to adopt a more targeted approach for companies most at need. While support would be less generous terms than the existing regime, this proposal would help protect viable jobs that would otherwise be lost.
Alongside this proposal, Carolyn also outlined the CBI’s ideas for additional cashflow support to help provide a bridge to the economic recovery through the extension of lending facilities like the business interruption loans, introduction of further targeted support on business rates and the deferral of second quarter VAT payments.
The importance of continued economic support also featured prominently in evidence provided by the CBI’s Chief Economist, Rain Newton-Smith, in her evidence session to the House of Lords Economic Affairs Committee. Alongside these business support proposals, Rain highlighted CBI member experiences of the Kick start scheme following the Chancellor’s Summer Economic Statement in June. While firms have welcomed the scheme’s introduction overall, many smaller firms have identified the need for each firm to tacker on a minimum of 30 ‘kickstarters’ as being prohibitive for their participation.
Going forward, the CBI will continue to work closely with the Treasury, feeding in economic data and business anecdote, to help secure targeted business support and influence these key set-piece announcements by the Chancellor.
Enabling a speedy economic recovery from COVID-19
Elsewhere, the CBI has also continued regular engagement with the Business Secretary, Alok Sharma, with two meetings taking place in the last fortnight.
Firstly, addressing business concerns about low confidence impacting economic activity, CBI President, Lord Bilimoria met with the Business Secretary to discuss the test and trace system and how it is vital to increase widespread testing to build confidence. Lord Bilimoria also welcomed the government’s positive announcement of the £500 million funding for instant tests.
Carolyn also joined a business organisations roundtable with Mr Sharma to discuss the government’s back to work campaign. During the discussion, Carolyn reiterated the CBI’s call for government to work with businesses to enable people to return to their places of work, where if it is safe to do so and makes sense for both firms and individuals.
Despite the benefits we’ve seen through increased remote working throughout the pandemic, Carolyn argued a hybrid model of remote and office working will help the UK capture the best of both worlds. Linked to this, Carolyn also noted the importance of key issues including wraparound childcare, building confidence in public transport and effective test and trace systems to deal with local outbreaks in enabling people to return to the office if it made sense for them and their employer.
Balancing risks in the UK’s relationship with China
Alongside shaping the Government’s response to the COVID-19 pandemic, the CBI’s also been engagement political stakeholders on the UK’s trading relationships with key international partners.
As part of this engagement, a small group of CBI members and Josh Hardie, CBI Deputy Director General, met with David Quarrey, Deputy National Security Adviser, and senior officials from DIT, HMT, DCMS and FCO to discuss the need for a balanced approach in determining the UK’s future economic relationship with China. During this meeting insights on how business balances the risks in market against the enormous opportunities in China and the negative consequences across the UK economy if the UK doesn’t get China policy right were discussed.
David Quarrey confirmed the UK government would continue to be ambitious on trade policy, despite political tensions, and continue formal Ministerial engagement on market access issues. Going forward, the Cabinet Office have asked the CBI to convene confidential China discussions between business and Whitehall officials.
Finally, Tom Tugendhat MP, Chair of the Foreign Affairs Committee and China Research Group joined the CBI’s International Trade and Investment Council. The discussion focused on where Tugendhat would draw the line on restrictions to trade and investment and the need for UK trade policy to reflect UK economic interests as well as values.