Rishi Sunak will deliver a statement in the Commons on Wednesday. Detail has been thin on the ground, save for some briefing to the newspapers about apprenticeships and possible VAT cuts. But if Boris Johnson’s damp squib of a speech last week is anything to go by, it is unlikely to measure up to the unprecedented challenge faced by our economy in these extraordinary times.
What the country desperately needs is a back to work Budget focused on jobs, jobs, and jobs again. Instead, the Tories are frantically trying to lower expectations of what the Chancellor will say. Rather than rising to the challenge of tackling the greatest economic emergency for a generation, they are playing down the urgency of decisive action. If that sounds familiar, it’s because these are precisely the mistakes the Tories made at the beginning of the health crisis – not taking the challenge seriously, not gripping it, and being too slow to respond.
Right now, across the world, finance ministers are laying out ambitious packages to restart their economy and guide hard-pressed sectors through the difficult times ahead. While the UK government’s actions in putting in place the furlough scheme and the self-employment income support scheme were right, they have now had plenty of time to plan the next steps for our economy. So far we’ve seen little evidence that they have a plan. It would be a big mistake to imagine that it’s a case of job well done.
As well as having a plan, it’s important too that the government delivers it properly and gets the messaging right. We all need the government to succeed. But since the Dominic Cummings fiasco, people have begun to lose faith in what they say. We need the test, track and isolate system fully operational as soon as possible, to help ensure public confidence and make sure public health and our economy improve in lockstep. This is crucial: if the government’s plans to ensure public safety and suppress the virus don’t command public confidence, there will be real consequences for consumer confidence, business investment and the entire economy.
Our Shadow Chancellor Anneliese Dodds’ speech on Friday set out the key tests by which we will measure the government’s economic response this week. We want to see those tests met. And on top of that, we expect to see a lot of detail in any budget that rises to the challenge of our times. Here are ten things we will be looking out for in the Chancellor’s statement. It starts with jobs, jobs, and jobs again.
1. Retaining jobs
We all know the job retention scheme – the so-called furlough – and the self-employment income support scheme can’t go on forever. But the scheme must be extended in those industries most impacted by ongoing public health restrictions and there are things the government could do now to spend existing money better and protect jobs and livelihoods more effectively. Removing it right across the economy at the same rate, regardless of how badly hit sectors have been, will be a disaster. Last week’s job losses are a foretaste of what’s to come if the Chancellor persists in removing these schemes at the same rate in every industry.
2. Sustaining jobs
Some sectors are being hit harder than others by the pandemic, and they are going to continue being hit harder because the distancing restrictions strike at how their businesses work. It’s great that we’ve now seen a package of support for the performing arts announced by government, but we need to see support in place for hard-hit sectors like hospitality and tourism, and the worst hit manufacturing industries. That’s especially important if the Tories still aren’t moving away from their one-size-fits-all approach to the job retention scheme.
In particular, we need an approach that recognises that different sizes of company have different needs. Smaller companies have shorter redundancy periods, so to avoid a tide of redundancy notices for workers in smaller firms in the near future, the government urgently needs to abandon its one-size-fits-all approach. That will be key to preventing wider job losses in supply chains and also protecting the economies of the many towns and cities across the UK which are built around major employers.
3. Supporting job creation
Without decisive government action, furlough will be a prelude to redundancy for too many people. Even with effective action to retain and sustain jobs, we know that the shape of the economy coming out of the pandemic is likely to be different from before – and in any case we’ve all known for years that it needs to be different. We want to see an effective scheme to support job creation – modelled on Labour’s Future Jobs Fund – that ensures people are able to find decent work even in the challenging labour market ahead. We know that unemployment does lasting damage not just to individuals, their livelihoods and their families, but to whole communities. It’s vital that the government acts to prevent that.
4. Support for the workers who most need it
The shape of the economic crisis we’re in means it is especially tough for people entering the job market for the first time and for people nearing retirement age. The government has made some positive noises about young people in particular, but we need to see their ambition match the scale of the challenge we face. Research from the Institute for Public Policy Research published on Friday suggests that without further government action there will be an extra 620,000 young people unemployed by the end of the year (with 380,000 new claims to benefit between April and the end of the year expected to last for six months or more).
Youth unemployment is scarring: it lowers long-term employment prospects and earning potential. And it is people from the poorest backgrounds and with the lowest qualifications who are likely to be the worst affected. An Institute for Fiscal Studies report also out on Friday points out that young people starting out in the labour market have increasingly been working in lower-paid occupations, many of which are in sectors hardest hit by the pandemic – for example, hospitality and non-food retail. That means younger workers are going to be finding it much harder to take their first step onto the career ladder. It’s crucial that we ensure the pandemic is not a scar on the careers of a generation.
5. Projects that deliver for Britain, not just the Prime Minister
There are a lot of infrastructure projects in Britain that are crying out for delivery and that will help working people and businesses alike. But, as Anneliese said on Friday, the test of a project can’t be whether it piques the interest of the Prime Minister or his closest adviser. We don’t need another bungled Garden Bridge project. We don’t need more talk. We want to see instead a package around new and accelerated projects which make a real difference to the lives of working people – not just after they are built, but as they are built.
That means that projects must involve local firms. They must give the local workforce new skills and training. They must lead to material improvement in the quality and availability of local employment. And while hard hats and poured concrete are crucial, we also need to think further: infrastructure isn’t simply about bricks and mortar. There are plenty of other ways in which we could make improvements to Britain’s capacity and resilience as a country that might allow us to make more use of the skills of people whose sectors are currently operating at reduced capacity – for example, improving staffing ratios in social care.
6. Projects for every part of our country
The economic recovery from this crisis needs to be tailored to all the different regions and nations of our country, not dreamt up by Tory ministers in Whitehall. Funding needs to be driven by the needs of our economy and the realities of what can be delivered, not by the need for the local Tory MP to have content for their election leaflets. Last week the government announced new funding for local government, where hard-pressed councillors are facing horrible choices. As Shadow Communities and Local Government Secretary Steve Reed has said, it’s a start, but we don’t know how it will be shared out. Much of the detail is being held back until the autumn, which might be too late to save many frontline workers’ jobs that are now at risk.
And what was really striking about the announcements in the PM’s speech last week was which parts of the UK weren’t there. Buried in a footnote to the press release was confirmation that none of this new spending would entail extra money for the devolved governments. Instead, they were just encouraged to bring forward existing capital spending themselves. If it’s right for Westminster to spend money in England to boost the UK economy, it’s right to provide money to Cardiff Bay, Holyrood and Stormont to do the same. As Welsh government finance minister Rebecca Evans said, for Wales the PM’s speech was a “complete non-announcement – no new funding this year and not a single penny of new investment”. Rishi Sunak needs to do much better than his boss this week.
7. A greener future for Britain
We urgently need to fit our country for the huge challenge of the climate emergency. We want to see the government working to ensure that every single project must be consistent with the drive to net zero. We need to build the green jobs of the future, and we need Britain to be part of the transition to a greener, more resilient, and more sustainable economy. The recent committee on climate change (CCC) report laid bare how badly the UK is falling behind, and just as the German, Danish and South Korean stimulus packages have focused on green technologies, so must ours if we are to stand a chance of keeping up.
This week is a major opportunity for the government to focus Britain’s economic recovery on the industries of the future, and get us on track to decarbonise our economy. A key part of that greener future, as shadow minister for climate change Matt Pennycook has argued, is increasing energy efficiency. The Tory manifesto promised to invest £9.2bn in the energy efficiency of homes, schools and hospitals. The CCC has argued that even that is not enough. Inefficiently heated buildings produce almost a fifth of the UK’s carbon emissions. Reducing energy consumption, improving our health, and supporting new jobs: we’d like to see an ambitious plan from the government to start delivering their own promises.
8. Making sure childcare is there for working families
As lockdown eases, quarantine ends and working patterns change, working parents with younger children have been looking to arrange childcare again. Ensuring that childcare is available is crucial to supporting a return to normal working arrangements for so many families: it has to be part of a strategy for economic recovery. For so many providers, margins are tight at the best of times and uncertainty about how many children they might be looking after in the weeks and months ahead doesn’t help at all. As shadow minister for children and early years Tulip Siddiq has said, urgent support is needed to help early years providers cope with reduced demand and extra safety costs, yet the sector has consistently been ignored. We need to see the government wake up to the reality that many thousands of essential childcare places could be lost unless it steps in with a properly funded plan.
9. Communities at its heart
It’s easy to slip into talking about sectors of the economy without remembering how the jobs and services they provide are woven into the fabric of particular communities and places. In single-industry towns and villages the damage is most obvious, but the damage happens everywhere. Retail closures mean job losses for people who work in the shops, declining footfall for the remaining shops on the same high streets, longer journeys for people who depended on that shop. If the last theatre in a town or city closes, that is a tragedy for all the staff – and it also means a loss to the cultural life of everyone who lives there and nearby. It means fewer children getting the chance to watch plays as well as read them in school. It means a change to the evening economy and the businesses that support that.
We need to see real understanding by the government of how sectors like the UK’s creative industries not only support the shape of wider economy in cities and towns across the country, but also showcase the culture and creativity of our people. Even if growth picks up in the big cities, abandoned town centres, closed factories and closed venues would be a grim future for people across Britain. The government needs to ensure its much trumpeted Towns Fund moves swiftly and addresses the challenges of today and tomorrow as well as the challenges of yesterday. And it must ensure that funds announced this week for the performing arts speedily get to local venues – before we see even more job losses.
10. NHS pay and resilience
In the last few months NHS workers – both frontline staff and everyone who makes the Service work behind the scenes – have risen magnificently to the challenge. But our gratitude doesn’t pay their bills. It’s time for meaningful pay talks with the unions representing NHS staff. As Keir has said, we must show our NHS staff the same commitment they have shown our country in its hour of need. What’s more, a second wave of Covid-19 cannot be ruled out. The government must be prepared, especially since a winter flare-up coming at the same time as seasonal flu would put yet more pressure on our hospitals and primary care. We want to see the government taking steps to ensure NHS trusts across the country are well prepared for the extra pressures of a second wave.