Rishi Sunak has warned a ‘blunt’ circuit-breaker national lockdown could cause ‘permanent damage,’ to UK jobs and firms.
There are growing calls, particularly from Labour leader Sir Keir Starmer, for a two-week circuit breaker to be implemented as a means of slowing the Covid-19 infection rate.
Manchester and Lancashire could well join Liverpool under Tier 3 restrictions on activity as part of the Government’s latest Covid-19 strategy.
Chancellor of the Exchequer Mr Sunak has defended regional lockdowns, saying they prevent nationwide measures that would be a ‘hit to businesses and jobs’.
But A YouGov poll estimates around 68 per cent of the population would support a two week, nationwide, circuit breaker lockdown.
Chancellor of the Exchequer Rishi Sunak, pictured on Wednesday, is one of a host of senior ministers who are calling for Boris Johnson not impose a national lockdown, with Mr Sunak warning it could cost jobs and close businesses
Mr Sunak, alongside Cabinet minsters including Business Secretary Alok Sharma, Home Secretary Priti Patel, Culture Secretary Oliver Dowden and Housing Secretary Robert Jenrick, are all calling for a lighter touch.
One minister told The Telegraph: ‘A national circuit breaker is a very crude tool … what [it] does is potentially displace the problem rather than remove it.’
A Government source added: ‘It’s no use just delaying things; if you are buying time what are you going to use that time for? You have to make it worth the hit to people’s lives.
‘If the infection rate doesn’t come down after two weeks you will come under pressure to extend it, which could drag on and on.’
The paper reported that talks of bumping London’s restriction measures up to Tier Two, are rapidly advancing, with The Independent suggesting measures could begin in the Capital as soon as Friday.
Meanwhile The Telegraph has reported that Sage advisers feel it is too late for a circuit-breaker lockdown this month, and it could instead take place over Christmas, to limit the impact on children’s education.
Liverpool’s bars were closed last night as the city copes with life under Tier 3 of the Government’s restrictions to prevent the spread of Covid-19
Voicing his opposition to a nationwide lockdown, Mr Sunak told MPs yesterday: ‘The cost of doing so are not abstract, they are real.
‘They can be counted in jobs lost, businesses closed and children’s education harmed.
Chancellor of the Exchequer Rishi Sunak has defended using local lockdowns, saying they prevent the need for a nationwide scheme
‘They can be measured in the permanent damage done to our economy which will undermine our long-term ability to fund our NHS and our valued public services, and they can be measured in the increase in long-term health conditions that unemployment causes.
‘This is not about choosing one side or the other. It is not about taking decisions because they are popular.
‘It is not about health vs wealth or any other simplistic lens we choose to view this moment through.
‘The Prime Minister was absolutely right when he set out our desire for a balanced approach, taking the difficult decisions to save lives and keep the R-rate down while doing everything in our power to protect the jobs and livelihoods of the British people.
‘And the evidence shows a regional, tiered approach is right because it prevents rushing to another lockdown.
‘The entire country would suffer rather than targeting that support, preventing a lockdown in parts of the country where the virus rates are low.’
He repeatedly defended the Government’s new three-tier alert level system for England after Labour pushed for a short circuit-breaker lockdown to help combat Covid-19.
Labour also demanded greater support for the north of England, the Midlands, Scotland, Wales and Northern Ireland as they deal with extra restrictions.
The Opposition’s Commons motion added the job support scheme should be reformed to incentivise employers to keep staff on, fix ‘gaps’ in support for the self-employed and extend the ban on evictions.
Mr Sunak last week announced workers in pubs, restaurants and other businesses forced to close under the new restrictions would have two-thirds of their wages paid by the Government under an expansion of the job support scheme.
Labour leader Sir Keir Starmer had called for circuit-breaker, prompting an attack from Mr Sunak who said the country could not ‘blithely fall into another national spring-style lockdown’
Speaking in the Commons, the Chancellor said the ‘stark reality’ of the economic and social impact of another national lockdown must be acknowledged.
In an attack on Labour, Mr Sunak added: ‘We can’t just let the virus take hold but nor can we blithely fall into another national spring-style lockdown as the party opposite now wants to do, rather than following our regional tiered and localised approach.’
The Chancellor went on: ‘We need a balanced approach, we need a consistent approach, and we also want a cooperative approach. But any responsible party calling for a shutdown of our entire country should be honest about the potential costs – economic and social – of such a dramatic measure.
‘At the very least they should have the integrity to acknowledge that what they’re proposing will create significant damage to people’s lives and livelihoods.
‘I’ve never said there are easy choices or cost-free answers, this is the reality we face and it’d be dishonest to ignore that truth.’
Shadow chancellor Anneliese Dodds earlier warned blocking a short-circuit breaker lockdown does ‘not make sense for the health of our population and it does not make sense for our economy’.
Shadow Chancellor Anneliese Dodds said blocking a circuit-breaker ‘does not make sense for our economy’
She said: ‘If we continue as we are without taking control of the public health situation then we’ll see a worse situation for jobs and businesses in our country.
‘It’s very clear that blocking a circuit-breaker does not make sense for the health of our population and it does not make sense for our economy, and I believe members on the opposite side need to have a reality check here.’
Ms Dodds added: ‘Every week of that inaction will hit business and consumer confidence, costing more jobs and livelihoods and with more businesses going to the wall.
‘The question is not whether we can afford a circuit breaker, the question is whether we can afford to continue with a Government that ducks taking hard choices until it’s forced into them. A Government that seems unable to stand apart from its chaotic lurching from week to week, to assess what our country needs and take decisive action.’
The circuit-breaker must be used to fix Test and Trace and devolve it to local areas, Ms Dodds argued.
White collar jobs carnage at Christmas: FIFTH of UK bosses expect to axe up to 10% of workers by end of year – with office staff in legal and health among hardest hit
By Luke May for Mailonline
A fifth of business bosses in the UK believe they will need to axe up to 10 per cent of their workforce by the end of the year, amid fears hundreds of thousands more people are set to become victims of the coronavirus jobs bloodbath, a new survey has revealed.
Bosses of large (more than 250 employees) and medium (50-249 staff) sized firms, businesses in the hospitality sector and those in Scotland and Wales were most likely to make the biggest cuts, with some warning they could axe up to 60 per cent of their workforce, the YouGov figures reveal.
The data shows bosses at more than 10 per cent of British hospitality and leisure businesses plan to make cuts cuts of more than 50 per cent of their workforce by Christmas. The next closest sector is the real estate sector (eight per cent), followed by retail (six per cent) and transport and distribution firms (six per cent).
But while pub, restaurant and retail employees have already taken the brunt of the damage in terms of jobs losses, with businesses having endured months of lost trade during lockdown, and having struggled to revive with the government’s support grants and Eat Out to Help Out schemes, it now appears white collar jobs could also be at risk.
The data reveals nearly a fifth (18 per cent) of education-based businesses could make cuts of between 20 and 29 per cent of their workforce by the New Year, while a third of bosses at legal firms across the UK believe they will have to cut up to 10 per cent of their staff.
Almost a quarter of bosses involved in white collar industries such as media and marketing, medical and health services and finance and accounting also believe they will have to make 10 per cent cuts to their workforce by the end of 2020, the survey results show.
But the outlook was better for microbusinesses (between one and ten employees), where 70 per cent said they did not plan cuts, while the retail industry, hit by months of loss of trade during lockdown, also had the most company chiefs say that they would not be axing jobs.
It comes as figures yesterday revealed how hundreds of thousands of people had already lost their jobs following the coronavirus outbreak, with the number of UK redundancies now rising at its fastest rate since the 2008 financial crisis, as unemployment surged to 1.5million.
In another day of news dominated by the coronavirus pandemic:
- Tories and Cabinet ‘hawks’ hit back at SAGE demands for national ‘circuit breaker’ lockdown as scientists brand PM’s local Tiers plan ‘worst of all worlds’ and warn 107,000 lives could be lost – amid claims Boris is 80% certain to order move at half-term;
- Manchester and Lancashire could be forced into strictest Tier 3 lockdown by No.10 after meeting today as mayor Andy Burnham blasts government for ‘piling on the pressure without negotiating’;
- The head of Oxford vaccine team warns facemasks and social distancing will be needed until next summer;
- Liverpool revellers enjoy their final night in the pub before the city is put into ‘high alert’ and venues shut for weeks;
- Boris Johnson joked ‘Rule of Six’ would be an excuse to ‘not see the in-laws at Christmas’ in gag that fell flat during Zoom call to Tory backbenchers;
- Academics claim a two-week ‘circuit-breaker’ lockdown linked to half-term could save ‘between 3,000 and 107,000 lives’ by New Year after Keir Starmer demanded Boris Johnson take immediate nationwide action as deaths doubled in a week to 143;
- Pubs are closed across Europe as coronavirus cases on the continent reach their highest weekly levels since the start of the pandemic
The survey figures, which come from a late September YouGov poll of 1,108 key decision makers at GB businesses, show 21 per cent believe they will have to axe around 10 per cent of their workforce ahead of the New Year.
The figure was even higher among bosses at large businesses (more than 250 people), 26 per cent of whom said they believed they would have to cut around 10 per cent of their workforce by the end of December.
Bosses of large (more than 250 employees) and medium (50-249 staff) businesses, firms in the hospitality sector and those in Scotland and Wales were most likely to make the biggest cuts, with some warning of cuts of up to 60 per cent of their workforce, the YouGov figures reveal
Guide to the graphs on the left: The business bosses surveyed were asked about the size of their business, with each grouped into micro, small, medium and large, with net groups of micro and small and small-to-medium-enterprises and a total calculated. Each of the participants were asked if they had received direct support from the government. The blue bars represent businesses who say they are currently receiving support, orange is those who were previously receiving support, maroon is those who say they have never received support and grey is those who do not know.
Guide to the graphs on the right: Each bar represents a type of industry or business type. Each colour represents the size of the cut – from none to 90-100 per cent and those who don’t know. The larger the size of the bar, the more bosses in that sector or type of business plan to make that level of cut. For example, almost 70 per cent of micro-businesses believe they won’t make cuts, represented by a large green bar.
The data reveals nearly a fifth (18 per cent) of education-based businesses could also make cuts of between 20 and 29 per cent of their workforce by the New Year, while a third of bosses at legal firms across the UK believe they will have to cut up to 10 per cent of their staff
More than 10 per cent of UK hospitality chiefs say they could axe 50 per cent or more of their workforce by the end of the year, a YouGov poll has revealed. Behind hospitality was real estate, where eight per cent of bosses revealed they could make cuts by Christmas, and transport and distribution firms, of which six per cent said they could cut 50 per cent of more of their workforce by the end of 2020
Five percent said they would have to axe a third (between 30-39 per cent) of their workforce by the end of 2020, while one per cent suggested that the whole business could go altogether.
Within medium businesses (50-249 employees), four per cent of bosses said they would have to lay off at least 50 per cent of employees – matching the response by micro-business owners (less than 10 employees) and double the 2 per cent of small business owners (10 to 49 employees).
Across sectors, hospitality and leisure, an industry which suffered months of lost trade during the first coronavirus lockdown and continued uncertainty, has the most worrying figures.
Two per cent of hospitality business owners said they could lose 90 to 100 per cent of their workforce by Christmas, while seven per cent said they could cut half or more (50-59 per cent) of their workforce by Christmas.
The nearest industries to that were retail, finance and accounting, media and advertising, as well as transportation, all of which three per cent of businesses bosses said they could cut half of more of their workforce by the end of the year.
Around 15 per cent of hospitality business owners said they could slash around a quarter of their workforce in the coming months.
The stark warning comes as hospitality chiefs yesterday said that hotels, pubs and restaurants could be ‘decimated’ by new coronavirus restrictions if their areas are plunged into a second tier lockdown.
The British Beer and Pub Association also warned that ‘thousands of local pubs and jobs will be lost for good’ and attacked the Government’s decision to disqualify pubs in a Tier Two lockdown from claiming cash for support.
Emma McClarkin, Chief Executive of the British Beer & Pub Association, said: ‘Singling out pubs for closure and further restrictions is simply the wrong decision and grossly unfair.
‘Local lockdowns that close pubs will devastate our sector and the communities it serves.
‘And most pubs will struggle to sustain viable business under tier two with their trade being so heavily impacted. Thousands of local pubs and jobs will be lost for good.’
Despite concern among hospitality chiefs, it was in the legal industry where most small cuts could be made, with 32 per cent of bosses saying they could axe between one and nine per cent of their workforce by the end of December.
Others planning small cuts (between one and per cent) include in the medical and health industry (25 per cent), transportation and distribution (26 per cent) and real estate (26 per cent).
In terms of regions, it was Wales and Scotland who both face the risk of the biggest cuts, according to the survey.
Four per cent of business chiefs in Wales warned they could cut between 70-79 per cent of their workforce by the end of the year, matched only be the North East (also 4 per cent), while five per cent said they could cut between 50-59 per cent – followed by Scotland (four per cent) and the West Midlands (four per cent).
In terms of small cuts (between one and nine per cent), the highest was in the West Midlands, where 27 per cent of business chiefs said they could make the cuts by the end of 2020, followed Yorkshire and Humberside (22 per cent) and the coronavirus-hit North West (20 per cent).
The East of England was the region highest for business bosses warning they could axe all of their employees, while it was in the East and West Midlands where most business bosses warned they could make cuts of between 30 and 49 per cent.
However London was far from immune, with 14 per cent of businesses saying they could make cuts of between one and nine per cent in the lead up to Christmas, while 10 per cent said they could cut between 10 and 19 per cent.
More than 20 per cent of key decision makers who took part in the YouGov survey, of 1,108 of business chiefs in the last week of September, believe they will have to cut around 10 per cent of their workforce ahead of the New Year. The figure was even higher among bosses at large businesses (more than 250 people), 26 per cent of whom said they believed they would have to cut around 10 per cent of their workforce by the end of December.
Across sectors, hospitality and leisure, an industry which suffered months of lost trade during the first coronavirus lockdown, has the most worrying figures
But it was in the legal industry where most small cuts could be made, with 32 per cent of bosses saying they could axe between one and nine per cent of their workforce by the end of December
In terms of regions, it was Wales and Scotland who both face the risk of biggest cuts, though West Midlands was the area for the most small cuts (between one and nine per cent), according to the survey
In Scotland, four per cent of business bosses said they could cut up to 50-59 per cent of their workforce, while 22 per cent said they could cut between one and nine per cent
Companies aged between five and 10 years old and those with histories longer than 25 years were most likely to make cuts, according to the survey.
Using data from the pll, hospitality jobs in established businesses in Wales or Scotland are most of risk of large cuts, while legal firms in the West Midlands, London or the South east were most likely to make small cuts (between one to nine per cent of the workforce).
Other areas raised in the survey include the thoughts of business chiefs over the government’s support of firms.
Around half (48 per cent) believe the government has done enough to support firms through the pandemic, but 42 per cent believed it was not enough.
Of those, the largest group were small businesses bosses (45 per cent), followed by micro-businesses, 44 per cent of which say the support they have received from the government hasn’t been enough.
Meanwhile, a quarter of bosses from small businesses surveyed warned it could take up to two years to recover from the impact of the pandemic.
The figure was around 20 per cent for medium and large businesses.
The results of the survey came as yesterday it was revealed that the number of UK redundancies has risen at its fastest rate since the 2008 financial crisis, as unemployment surged to 1.5million.
Figures by the Office of National Statistics show 156,000 were made redundant in the three months to July – an increase of 48,000 from the three months to the end of May, and the sharpest quarterly rise since 2009 – when Britain was in the grip of the global financial crisis.
In the three months to August, the number of jobless people rose by 138,000 quarter on quarter to 1.52million in the three months to August – the highest since 2017. The unemployment rate rose to 4.5 per cent, from 4.1 per cent in the prior three months.
The Office for National Statistics added that the number of UK workers on company payrolls fell by 673,000 between March and September, despite edging up by 20,000 last month.
The FTSE 100 index of Britain’s leading companies was down 0.6 per cent or 35 points to 5,967 yesterday following the news, which added to concerns about the economic impact of new coronavirus-led business restrictions.
ONS deputy national statistician Jonathan Athow said: ‘Since the start of the pandemic there has been a sharp increase in those out of work and job-hunting but more people telling us they are not actively looking for work.
‘There has also been a stark rise in the number of people who have recently been made redundant.’
These Office for National Statistics graphs show how the unemployment rate is rising and the employment rate falling
Redundancies increased by a record 114,000 on the quarter – shown between June to August 2005 and June to August 2020
This graph shows how the number of UK employees has fallen in recent months, having risen for several years before then
The total number of hours worked is still low since the coronavirus crisis took hold, but it is now showing signs of recovery
Experts warned that unemployment will continue to ramp up as the Government’s furlough programme comes to an end, with firms having to start making a 10 per cent contribution to the costs of staff on the scheme last month.
The scheme will come to an end on October 31. But there was a small dose of cheer as the data showed a sign of recovery in vacancies, which surged by a record 144,000 to 488,000 between July and September.
Despite this, vacancies still remain below pre-coronavirus levels and 40.5 per cent lower than a year earlier.
The ONS also said regular pay, excluding bonuses, grew by 0.8 per cent in the three months to August, although average total pay, including bonuses, was unchanged.
Chancellor Rishi Sunak insisted the Government’s Plan for Jobs would help protect employment and ‘ensure nobody is left without hope’.
The growth in employee total pay including bonuses is unchanged from a year earlier, translating to a real fall of 0.8 per cent
The level of vacancies saw a record quarterly rise in July to September 2020, but it is still 40.5 per cent lower than a year ago
The Office for National Statistics reported that the claimant count level in Britain has risen by 120 per cent since March 2020
This graphic shows the impact of the main dates during the coronavirus pandemic on labour market data sources
Chancellor Rishi Sunak during a press conference at 10 Downing Street in Westminster yesterday evening
‘I’ve been honest with people from the start that we would unfortunately not be able to save every job,’ he said. ‘But these aren’t just statistics, they are people’s lives.
‘That’s why trying to protect as many jobs as possible and helping those who lose their job back into employment is my absolute priority.’
But businesses and economists said they are braced for mounting job losses, in spite of the Chancellor’s follow-up worker support schemes.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: ‘The Job Support Scheme will do little to hold back the tide of redundancies.
‘We continue to expect the headline rate of unemployment to shoot up over the coming months.’
Tej Parikh, chief economist at the Institute of Directors, said: ‘With the furlough scheme unwinding, cash-strapped firms have been forced into difficult decisions about retaining their staff.
‘Demand remains weak and as restrictions ramp up again many businesses will be stretched when it comes to paying wage bills.
‘The Job Support Scheme may need to be beefed up if the Government wants to avert further rises in unemployment.’
Prime Minister Boris Johnson introduced a new system of restrictions for England yesterday and a minister said government may have to go further.
The Confederation of British Industry said ramping up the government’s testing regime will be a key component to securing an economic recovery.
The Bank of England has forecast that the unemployment rate will hit 7.5 per cent by the end of the year.
But BoE Governor Andrew Bailey yesterday repeated his warning that the economy could prove weaker than the central bank’s forecasts.
Britain’s economy grew in August at its slowest pace since May as its bounce-back from the lockdown slowed.
Tom Pickersgill, chief executive of Orka, which provides a platform for shift workers, said: ‘Almost a million people have lost their jobs since the start of the pandemic and, given the latest lockdown measures, this number could climb again in the coming months.
‘While this is a terrible situation for so many to be in, the picture of the job market isn’t completely black and white and there are some opportunities out there.
‘Permanent 9-5-style roles are going to take time to recover to pre-Covid levels, but we’re also going to see a spike in temporary job opportunities as businesses favour flexibility in their approach to hiring.’
Scores of companies in Britain have announced plans to cut jobs since the pandemic struck.
Last week the owner of clothing retailers Edinburgh Woollen Mills, Peacock’s and Jaeger put 24,000 jobs at risk by saying it was set for administration.
Rebecca McDonald, senior economist at the Joseph Rowntree Foundation, said: ‘With redundancies increasing sharply even before the national furlough scheme is fully unwound, today’s figures are a stark reminder that this crisis still has a long way to run.
‘This is not the time for half measures: the government can still act quickly and decisively to prevent a wave of unemployment that will hit the poorest hardest.
‘And those who have already lost their jobs should be able to rely on a properly funded benefits system and given the opportunity to gain the skills they need to get back into work.’
Today the International Monetary Fund warned the Covid crisis will blow a £21trillion hole in the world economy and inflict ‘lasting damage’ on living standards.
After the total death toll from the pandemic climbed above a million victims, the Washington-based watchdog yesterday spelled out the devastating global impact of the virus on the economy.
In its latest World Economic Outlook, the IMF predicted the crisis would leave financial scars for years while the recovery would be ‘long, uneven and uncertain’.
It also forecast the total loss in output triggered by the pandemic will hit $28trillion (£21trillion) by the middle of the decade.
This is a dent worth more than the size of the US economy, the largest in the world.
Gita Gopinath, chief economist at the IMF, said this ‘represents a severe setback to the improvement in average living standards across all country groups’.
She added: ‘This crisis will likely leave scars well into the medium term as labour markets take time to heal, investment is held back by uncertainty and balance sheet problems and lost schooling impairs human capital.
‘All countries are now facing what I would call The Long Ascent – a difficult climb that will be long, uneven, and uncertain. And prone to setbacks.
‘The path ahead is clouded with extraordinary uncertainty. Faster progress on health measures, such as vaccines and therapies, could speed up the ascent. But it could also get worse, especially if there is a significant increase in severe outbreaks.’
Despite all this, the IMF has become marginally more optimistic since the summer, predicting the global economy will shrink 4.4 per cent this year.
This marks an improvement on the 5.2 per cent contraction it predicted in its last World Economic Outlook in June.
The upgrade reflects both that the recession in the second quarter was not quite as severe as previously feared, and that economies around the world have bounced back more quickly than expected as lockdowns have been lifted.
But even a 4.4 per cent contraction would still amount to the worst worldwide slump since the Great Depression of the 1930s, the Fund said.
The IMF also warned the recovery would be slightly slower than it had previously thought, amid a spike in infections and a fresh wave of lockdowns and restrictions to slow the spread.