Andy Street: It’s time to accept that HS2 is a done deal – part of caring for livelihoods as well as lives in our region

20 Oct

Andy Street is Mayor of the West Midlands, and is a former Managing Director of John Lewis.

The impact of the Coronavirus pandemic continues to affect all aspects of life, heading the news agenda, fuelling social media and dominating conversation in households everywhere.

A week ago, the West Midlands – excluding Coventry and Dudley – was placed in Tier 2 of the Government’s new restrictions and we are now working to ensure, if humanly possible, we do not move to Tier 3.

As Mayor of the West Midlands, I voiced my disappointment after we were placed in Tier 2 – and in particular my concerns over the impact on our restaurants, cafes, pubs, and on the conference and events sector that is so important to our local economy.

While hospitality businesses in Tier 3 are formally closed and supported with cash, those in Tier 2 find their businesses severely constrained, without help. I continue to argue for specific support to address this.

The real challenge we face now is balancing medical advice with economic concerns, in ways that will protect not only people’s lives, but their livelihoods too. However, as we debate the tough decisions of today, and our immediate attention is directed at controlling the virus, local leaders must also focus on recovery: indeed, we must own the recovery.

This means not only recognising the unprecedented level of economic support that has already been provided by Government, but also ensuring that we take full advantage of the opportunities provided, as we Build Back Better.

So as we await new developments, I want to look to the future and write about the biggest economic opportunity for the West Midlands – HS2. As the short-term economy comes under immense strain, we need to ensure the UK’s biggest single long-term economic investment is delivering more jobs and much-needed contracts for business now.

It would be an understatement to describe HS2 as a Marmite scheme. The scale and ambition of the project, by its nature, has made it hugely divisive. Yet it is that scale, and the investment it will bring, that will make it a central plank of our region’s economic recovery.

I have been a consistent supporter of HS2. When the crunch moment came in February, I stuck my head above the parapet to urge the Government to give the project the green light in the face of considerable opposition. This was the right thing to do, and I make no apologies for standing up for what I believe was best for my region.

I chose to leave my business career to become Mayor because I wanted to make a real difference to the West Midlands, and that means standing up for what I think is in our interests, even when it means I may get some flak.

The job of being Mayor and the purpose of HS2 share the same overriding principle objective – bringing jobs to this region and improving the livelihoods of its people. That, of course, is now more acutely important than ever.

I have written before on this site about how HS2 is driving investment now, most obviously in Birmingham and Solihull, but it’s not just about where the stations are being built. Before the ticket offices open, HS2 will create jobs and wealth across the conurbation, as it already is – generating 12,000 crucial jobs in the West Midlands, right now. We are now at another crucial stage, as HS2 Ltd begins to award contracts.

As we grapple with the challenges at hand today, we need to be plotting how this huge transport investment can provide a route to economic recovery. That’s why last week I called together a summit for potential local suppliers to HS2.

This summit was generously hosted by McAuliffe – a Wolverhampton contractor already working on HS2. This setting perfectly illustrated our determination to ensure the benefits of HS2 spread far beyond Birmingham City Centre to support the whole region.

The response to this summit illustrated how this industrial heartland is eager to embrace the possibilities of HS2, with 700 firms dialling in to hear about the opportunities on offer for local business. HS2 will generate an estimated 400,000 contracts and I am determined that as many of them as possible are won by Midlands companies.

HS2 is also helping boost skills across the region, providing training opportunities for younger people who have been hit hard by the pandemic. Another innovative programme has enabling homeless people to join the HS2 workforce.

And the opportunities created by HS2 will stretch beyond the construction phase, with high-tech jobs running the digital operation from Birmingham in the future.

Of course, there are other major investments that will drive our recovery, such as the exciting new Health Innovation campus in Birmingham, which will see Bruntwood SciTech invest £210 million in our growing Life Sciences sector. But HS2 remains the biggest single investment in “levelling up” the regions.

Now, more than ever, we need Midlands and British businesses to hoover up every contract and every pound being spent on HS2. It is, quite simply, a monumental economic opportunity.

Whatever side of the debate you were on, HS2 is now happening. The diggers are in the ground here and along the route to the capital. At a time when we need to grasp every economic opportunity and exploit it, I believe it is time to leave behind the hand-wringing. As Mayor, it is my job is ensure this project is of maximum benefit to the West Midlands – and that starts right now with construction jobs.

Pressure rises on Ministers to publish assessments of the impact of lockdowns, restrictions – and Covid itself

20 Oct

Last week, ConservativeHome called for the Government to broaden and deepen the national conversation about Covid-19 – or at least try to as best it can.

It is essential to see the disease in the round by understanding the consequences of lockdowns, restrictions and the virus itself on both lives and livelihoods.

For livelihoods, read what’s usually called the economy, a dry term, but is actually a human story of lost jobs, lower living standards, higher poverty, damaged schooling and vulnerable sectors, including hospitality and retail.

For lives, read healthcare outcomes other than Covid-related ones.  In other words, cancelled operations and fewer treatments, as well as (for example) worse heart disease, cancer, mental health and domestic abuse outcomes.

This is why we urged the Goverment to publish –

  • A regular Treasury report that calculates the economic cost of the lockdown.
  • A rolling Department of Health assessment of the human cost of the shutdown.
  • The creation of an economic counterweight to SAGE.

We also suggested that some think-tanks have the capacity to issue comprehensive reports.

This site originally urged this course during the spring, and is far from alone in having done so.  On which point, congratulations to the Daily Mail, which today publishes a four-page investigation into health outcomes. It finds –

  • 25,000 more people died at home during pandemic, since they didn’t go to hospital as it continued.
  • There is set to be a 20 per cent rise in cancer patient deaths because of treatment backlogs.
  • Organ transplant operations fell by two thirds while waiting list deaths doubled. More than 50,000 operations for children were cancelled.

It’s worth pointing out that some of these outcomes will have been a consequence of Covid-19 itself rather than restrictions – for example, people not going to A & E departments in order to reduce the risk of catching the virus.

The line Matt Hancock took yesterday in the Commons is that suppressing the virus is integral to better health outcomes, because the more NHS resources the virus demands the fewer there will be for other conditions.

But a question that obviously follows is whether or not the Government’s strategy, which is dependent at present on big lockdowns, is the best means of protecting the NHS.

It’s worth noting that a Department of Health analysis has said that “in the long-term, the health impacts of the two month lockdown and lockdown-induced recession are greater than those of the direct Covid-19 deaths”.

The Mail is not alone in trying to get its readers to look at the Coronavirus in a more full context.  Yesterday, the Daily Telegraph reported that the ‘Protect the NHS’ message led to 90 per cent drop in hospital admissions.

The Times last Friday urged the Government to be “more transparent about the economic and health costs – the same day that we took much the same view.

And a wide range of Conservative MPs are increasingly calling for the kind of action we have outlined.  Theresa May has called for more formal economic advice.  Steve Baker, writing on this site yesterday, urged Ministers to publish “serious analysis of the costs of the options they face”.

Downing Street will be reluctant to take this course, and thus indicate that the Government might change its strategy, while it is doubling down on the present one.

In political terms, that’s what our report yesterday about new LAMP and lateral flow tests signified.  Number Ten believes that these can deliver where track and trace has not (though it is not abandoning the latter).

So it is trying to persuade Tory backbenchers not to abandon the testing strategy, and transfer their support either to lockdowns and a permanent suppression plan, or to loosening and a more voluntarist approach.

We shall see whether this push pays off – and if this planned massive scaling-up of new tests works.  ConservativeHome’s understanding is that the Treasury hasn’t ruled out a big report on economic costs.

However, Government sources pointed out that much of the required data is already available (i.e: unemployment figures), and that it would be hard to disentangle the effects of restrictions from those of the virus more widely.

We also detect a concern about the consequences of publishing bad economic news: on the one hand, the Treasury has an interest in alerting voters to the scale of the economic challenge, but none in alarming them.

Ryan Bourne: Johnson’s green jobs. Subsidy-reliant, expensive, price-raising. And a job loser elsewhere.

14 Oct

Ryan Bourne is Chair in Public Understanding of Economics at the Cato Institute.

It is said that, during the 1960s, Milton Friedman was visiting China, where guides took him to a canal-building site. Shocked at the prevalence of men bearing shovels, Friedman asked why the project wasn’t utilising modern technologies, such as mechanical diggers.

“You don’t understand, Professor Friedman,” his host explained, “this is a job creation programme.” To which Friedman retorted, “Oh, I thought you were trying to build a canal. If you really want to create jobs, then by all means give your workers spoons, not shovels.”

That tale is beloved by economists because it contains an important truth: gross job creation is a poor metric to judge success when considering government-led infrastructure. We could “create jobs” through getting people to fill in holes.

What matters is the net value added of the output created, as determined in markets – i.e: by consumers and open trade. Using more workers less efficiently to produce a canal reduces the output’s net value, because labour is a cost of production.

This lesson sprang to mind last week during Boris Johnson’s speech to the Conservative Party Conference. As part of his ode to offshore wind, Johnson talked of the UK’s natural abundance of the stuff (the “Saudi Arabia” of wind) and his excitement at the technology (floating wind islands). But he also extolled the idea of a UK “green industrial revolution” that “in the next ten years will create hundreds of thousands if not millions of jobs.”

Any market-led or government-incentivised shift towards wind will see new jobs in the industry “created.” But this shouldn’t be the goal. To echo Friedman, “we thought you were trying to produce electricity, subject to mitigating climate change. If you wanted to create jobs, why not have people make the wind turbines by hand?” We should judge the desirability of a pro-wind energy policy framework, in other words, by its contribution to this social value added, not numbers employed in the sector.

“Gross job creation in wind and other renewable generation is clearly a cost in economic terms,” Professor Gordon Hughes of Edinburgh explained to me last week. “The higher the number [of jobs], the larger the subsidies required and the larger the damage to the rest of the economy.”

He views this outcome as an unacknowledged problem of wind power generally, which does require labour for operations and maintenance, particularly as turbines age. If we are purely looking at how to produce power most efficiently, then these jobs are a hindrance – an economic failure, not success. According to Hughes, talking of creating “millions of jobs” is a “shortcut to national impoverishment”.

Of course, the desire for climate change mitigation means policymakers reject the premise that we just want our energy sector to simply prize efficiency. Due to the “social costs” of carbon, they aren’t just concerned about traditional measured value added, but are explicitly willing to take an economic hit in targeting a broader conception of economic welfare that takes into account these CO2 externalities.

And that’s fine, in principle. Yet even then, “green jobs” shouldn’t be the aim. An economist would say we should try (albeit imperfectly) to price this social cost, and then let markets find the most efficient way of delivering power accounting for it. What that does not require is industrial strategies, picking winners, and seeing the green energy sector as some sort of jobs machine.

Indeed, simple logic would suggest that making energy less efficiently than socially necessary reduces net jobs across the whole economy because of its impact on energy prices. “Energy is a labour-extensive industry. It does not employ a lot of people” Richard Tol, the renowned climate economist, explains. “If the energy sector would start to employ many more people, retail energy prices would rise rapidly.”

Given every other activity uses power as an input, it surely doesn’t need to be said that “more expensive energy means less growth and so less job creation” elsewhere. Given the sizes of the “energy” and “non-energy” sectors too, “a large relative increase in employment in energy is easily offset by a small relative decrease in employment in the rest of the economy.” An explicit aim to “create jobs” in the wind industry, in other words, would be vastly outweighed by job losses elsewhere.

Note: none of my analysis here is passing judgment on the desirability of decarbonisation. Tol believes that given the energy framework of UK policy, wind power will probably be cheaper than coal or gas through the 2030s. What I am simply saying is that aiming for more employment in wind, rather than merely trying to deliver power cheaply subject to any climate goals, is a deeply economically destructive way of thinking.

So why is the Prime Minister talking of millions of green jobs? Well, unfortunately, many politicians have moved beyond simply wanting to set frameworks for energy or even climate goals, and their green credentials have become wrapped with their becoming re-inured to the idea of national industrial strategies.

Not content with allowing consumers and producers to find the best ways to allocate resources, the Conservative Government increasingly wants to decide which sectors the national economy specialises in, thinking the state will this time do a good job of picking winners. And Boris Johnson’s “Saudi Arabia of wind” suggests that he wants to try to use policy to actively push the UK towards exporting wind power.

Would that work? No, says Tol. “Electricity is much more expensive to transport than oil…Wind power in the UK is cheaper than, say, wind power in Italy – but wind power generated in the UK and transmitted to Italy cannot compete with wind power generated in Italy.” Exporting the end product is a non-starter.

What about manufacturing the parts? “Despite what he [Johnson] says, no one is going to manufacture wind turbines in the UK without massive subsidies – that game is long past,” Hughes concludes. So having the Government tilt the deck further to try to create a wind manufacturing export industry would not only drag resources away from other activities with higher net value added, but make us a hostage to technological fortunes.

As Hughes has previously written: there’s no guarantee technological progress is more likely to come in renewables than fossil fuels or nuclear (see, for example, fracking).

To return to the Friedman analogy: we might accept some more shovel than machine use for canal building, if there were greater environmental costs of using machines, though recognising this makes us poorer. It’s another thing to say that rather than building a canal as efficiently as possible subject to this, the national government should intervene to support canal building or our selling shovels around the world. Yet with his promise of a green revolution, that is precisely what the Prime Minister implies.

Matthew Oakley: Levelling up. We need to measure it in order to deliver it – and know that it’s worked

12 Oct

Matthew Oakley is the Director of WPI Economics and a former Treasury economist.

Aside from Getting Brexit Done, the promise to strengthen and level up every part of the country was perhaps the most salient part of the Prime Minister’s 2019 general election manifesto.

The nine months since then have changed many things, but the need to level up is still just as strong. Yet despite this need, we are no still no clearer on what levelling up actually means, how we will know if the Government has been successful and how people, families and communities across the UK might actually benefit.

Today’s report from the Covid Recovery Commission, tackles this question; showing why levelling up is needed, how the Covid-19 pandemic has impacted on this, and how the Government must frame this issue as they seek to tackle it.

The first thing to consider is why some sort of levelling up is needed. Many reports, over many years, have focussed on headline estimates of output and productivity across the UK’s four nations and England’s regions. This comes as little surprise given that some measures of productivity put output per head in the North East at less than half of that in London.

Of course, output, productivity and the jobs and opportunities which they are related to, are of prime importance in understanding the relative success of different areas. However, focusing on such broad economic concepts, misses two important points.

First, that levelling up should be about more than just broad economic concepts and second that inequalities and the need to level up are just as apparent within regions, cities and towns as they are between them.

This is the main finding from the Covid Recovery Commission’s first report, published today. It shows that, up and down the country, there are individuals, families and communities that are struggling. Most striking here are findings from the Social Metrics Commission that poverty rates in London are ten percentage points higher than in some parts of the North of England.

More broadly, whilst the North of England is host to many of the most deprived neighbourhoods in the UK, more than half of people living in the ten per cent most deprived neighbourhoods are found in other parts of the county (36 per cent in the rest of England, 15 per cent in Scotland, Wales or Northern Ireland).

The links between the economic success of regions and local authorities and deprivation is also not clear cut, with some of the highest levels of deprivation being found in some of the wealthiest areas of the country (18 per cent of people in the most deprived neighbourhoods – 1.15 million people – in the UK are living in local authorities with the highest economic output).

Broader research shows that inequalities, or the need to level up, are not just about finances and economics. In fact, across the UK there are huge disparities in outcomes including life satisfaction, happiness and mental and physical ill health. Most concerningly, it is those struggling financially who are often the hardest hit.

For example, people from lower socioeconomic groups are more likely to have long-termhealth conditions, and the King’s Fund highlights that those living in the most deprived areas spend around a third of their lives living in poor health; twice the level of those in the least deprived areas.

Concerningly, these inequalities have been seen for decades and under Governments of all colours. And they are also about to get a lot worse.

In this respect, the Covid Recovery Commission’s report also shows emerging findings of where the health, social and economic fall out from the Covidpandemic have hit hardest.

Amongst other findings it highlights that mortality rates from Covid-19 are highest in the most deprived neighbourhoods in the UK. Even after controlling for a range of other factors, in the 20 per cent most deprived neighbourhoods there has been an average of 21 more Covid-19 deaths per 100,000 population compared to the least deprived neighbourhoods. Unemployment benefit claims have also risen most in those areas that were already suffering from high rates of claims.

Those neighbourhoods in the highest 10 per cent of unemployment benefit claims prior to Covid-19 have seen a 5.4 percentage point increase in claims, compared to a 2.3 percentage point increase for those in the 10 per cent with the lowest claim rate prior to Covid-19.

So what can be done? At the start, recognise that the Government has set off in the right direction; levelling up and promoting opportunity for people right across the country is exactly what needs to happen. Putting this front and centre of a strategy to drive the economy and strengthen society post-Covid is a clear priority.

But for this to be a success the Government now needs to do three things.

First, it needs to recognise that levelling up can only truly be a success if it delivers better outcomes for left behind people, families and communities in central London as much as it improves productivity and the economic success of towns and cities in the North of England.

This leads to the second point: that it must define what it wants to achieve in levelling up and set out a range of metrics with which that can be judged. Without this, it will be impossible to track progress or to design and implement effective policies.

Our work has shown that these metrics should be as local as possible (ideally evaluating impacts and progress at a neighbourhood level) and consider measures beyond economic fortunes to focus on underlying issues like mental and physical health and family and community resilience.

In turn, this leads to the third point, that central Government is too far removed from much of what will drive progress in these areas. As such, politicians and policymakers in councils, mayoral combined authorities and the UK’s devolved nations have a key role to play in driving forward this agenda. The Government must provide these areas with the remit to focus and report on levelling up and the policy and financial tools they need to tackle inequalities. A future Devolution White Paper is a prime opportunity to start to take that forward.

To many in Government, setting out a clear way of measuring success against a key manifesto commitment and devolving more power and funding away from Whitehall might sound like a risky agenda. But it is also a significant opportunity. It would show that the Government is committed to making the UK work for everyone and, if successful, could provide the electorate clear evidence of impact that Government has had on the lives of people and communities across the UK. 

In a UK faced with continued health and economic struggles, that evidence might be just what the Government needs in the next election.

Andy Street: Our experience in the West Midlands shows how skills drive economic success

7 Oct

Andy Street is Mayor of the West Midlands, and is a former Managing Director of John Lewis.

Covid-19 has hit the West Midlands hard. Livelihoods and life chances have been impacted by a pandemic that stopped our economy in its tracks – but we are determined to do what we can locally to get people back into work. Improving the skills of our people will be vital if we are to fill the new jobs we create.

The Conservatives have always been the party of opportunity – encouraging ambition and social mobility. We must return to that guiding principle and drive a revolution in skills and training to rebuild our economy.

I was encouraged last week when the Prime Minister put skills front and centre of the Government’s agenda, with a commitment to provide free courses for those without A-level or equivalent qualification. This commitment came alongside a package of other measures, including expanding the “digital bootcamp” concept pioneered here.

In the West Midlands, we know how improving skills can help build a strong economy. Before the pandemic struck, our economy was growing faster than any other part of the UK other than London. We had record jobs numbers and were setting records for housebuilding and productivity.

A significant part of this economic success was down to improving skill levels. Much work has been done to turn around a skills gap that, in 2007, branded us the worst qualified UK region. Back then, a fifth of young people here left school with no qualifications at all.

When I became Mayor of the West Midlands, this was an unacceptable situation I was determined to put right. As the work of the Social Mobility Commission has shown, an individual’s skills determine their long-term social mobility. What’s more, poor skill levels can lock families into disadvantage for generations. As someone who grew up here, this issue gnawed at me. I have tried to provide business-like leadership to tackle the problem head-on and deliver real results.

Our seven member boroughs of Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton have worked together to address the skills issues we faced. While we still face challenges, the improvement has been marked.

By last year, more than 50 per cent of local people were qualified at level three. In the Black Country, where the gap had been the most pronounced, more residents are now educated to degree level or above than ever before. The percentage of people with no qualification continues to reduce.

As we work to create new opportunities and jobs in the wake of the pandemic, the UK must take a similar approach. Because as the economy resets, those new jobs will emerge – and they will often have new requirements in terms of skills.

Our digital bootcamp, now backed by a further £1.5 million of funding, provides twenty-first century skills for thousands of people. Launched in September, the free to all ‘School of Code’ bootcamp is full-time and takes a learner from novice to software developer in just 16 weeks – before helping them find their first role in tech.

In a similar way, we are determined to ensure local people have the skills to benefit from jobs created by major investments like HS2 and the Commonwealth Games. We have set up our “Construction Gateway” which is training people to build the transport infrastructure and homes needed for our region’s future. The Gateway provides recognised qualifications and work experience to join the construction workforce as we Build Back Better.

One of the most notable successes of the West Midlands’ skills resurgence has been apprenticeships. Here, we use unspent apprenticeship levy from big businesses like HSBC, Lloyds Bank and Enterprise Car Hire to fund apprentices at smaller businesses. This unique arrangement means instead of unspent levy disappearing back to London it stays in the West Midlands, growing businesses and helping them ‘skill up’ local people.

Young people are among the hardest hit by the economic effects of Covid-19, which is why we are also launching six youth hubs, working with the Department for Education and the Department for Work and Pensions to link employment and training services to make sure they target young people. In just a few weeks, the first job placements for 16 to 24 year olds under the Kickstart Scheme are likely to begin. Kickstart, and our hubs, can provide direct and tangible help, providing work and teaching skills.

Of course, to deliver these skills, we need a properly equipped higher and further education sector. While our colleges have been backed by guaranteed funding throughout the pandemic, we have also pressed ahead with developments like the Institute of Technology in Dudley and Wolverhampton’s National Brownfield Institute.

Funding of almost £12 million will start to rejuvenate our existing college buildings too – but this represents only the first down payment of the five-year £1.5 billion capital investment announced by Gavin Williamson in March. I will be lobbying to ensure the West Midlands gets its share of this vital funding.

While our colleges work brilliantly together – and have been at their responsive best throughout the pandemic – the West Midlands is also lucky to have a remarkable higher education sector. Behind almost every economic success story lies one of our universities, which lead the way in all kinds of emerging sectors, from electric vehicles to life sciences. They will play their part too.

And, as we invest in the bricks and mortar of training and education, we are also embracing the lessons of lockdown – and the growing importance of online learning. We’ve teamed up with provider Coursera to offer 3,800 online courses, offering top class skills and qualifications to anyone who is unemployed, recently made redundant or furloughed.

The West Midlands Combined Authority has owned the devolved Adult Education Budget, ensuring every pound delivers more qualifications that employers actually want. Now we need to see more of these funds devolved. We have shown what we can do.

These are just some of the ideas that helped turn the West Midlands from the worst qualified area in the UK to the nation’s fastest-growing regional economy. When I was 18, this was a place that talented young adults often felt they needed to leave to realise their potential. Now, well qualified individuals want to move here. We are proof that better skills drive economic success.

Our focus, right now, must be on driving down the infection rate to defeat Covid-19. But as we plot our economic recovery, we must show we are the party of opportunity, and provide people with the skills needed to rebuild our economic fortunes.

‘I cannot save every business. I cannot save every job. No Chancellor could.’ Statement to the House – full text

24 Sep

Mr Speaker,

Thank you for granting me permission to make this Statement to the House today.

Earlier this week the Prime Minister set out the next stage of the government’s health response to Coronavirus.

Today I want to explain the next phase of our planned economic response.

The House will be reassured to know I have been developing plans to protect jobs and the economy over the winter period.

Plans that seek to strike the finely-judged balance between managing the virus and protecting the jobs and livelihoods of millions.   Mr Speaker,

I know people are anxious, and afraid, and exhausted, at the prospect of further restrictions on our economic and social freedoms.

I share those feelings, but there are reasons to be cautiously optimistic.

We are in a fundamentally different position than we were in March.

And we now know much more about this virus.

Public awareness of the risks, and how to mitigate them, is far greater.

And we have met our promise to give the NHS whatever it needs, with significant new funding for NHS capacity, for PPE, and, I can inform the House today, we have now provided over £12 billion for test and trace.

In economic terms, while our output remains well below where it was in February, we have seen three consecutive months of growth.

And millions of people have moved off the furlough and back to work.

But the resurgence of the virus, and the measures we need to take in response, pose a threat to this fragile economic recovery.

So our task now is to move to the next stage of our economic plan, nurturing the recovery by protecting jobs through the difficult winter months.

Mr Speaker,

The underlying rationale for the next phase of economic support must be different to what came before.

The primary goal of our economic policy remains unchanged: to support people’s jobs.

But the way we achieve that must evolve.

Back in March, we hoped we were facing a temporary period of disruption.

In response, we provided one of the most generous and comprehensive economic plans anywhere in the world with £190 billion of support for people, businesses and public services, as we protected our economic capacity.

It is now clear, as the Prime Minister and our scientific advisers have said for at least the next six months the virus and restrictions are going to be a fact of our lives.

Our economy is now likely to undergo a more permanent adjustment.

The sources of our economic growth and the kinds of jobs we create, will adapt and evolve to the new normal. And our plan needs to adapt and evolve in response.

Above all, we need to face up to the trade-offs and hard choices Coronavirus presents.

And, Mr Speaker, there has been no harder choice than the decision to end the furlough scheme.

The furlough was the right policy at the time we introduced it.

It provided immediate, short-term protection for millions of jobs through a period of acute crisis.

But as the economy reopens it is fundamentally wrong to hold people in jobs that only exist inside the furlough.

We need to create new opportunities and allow the economy to move forward and that means supporting people to be in viable jobs which provide genuine security.

As I’ve said throughout this crisis, I cannot save every business.

I cannot save every job.

No Chancellor could.

But what we can and must do is deal with the real problems businesses and employees are facing now.

In March, the problem was that we ordered businesses to close.

In response, we paid people to stay at home and not work.

Today, the problem is different.

Many businesses are operating safely and viably, but they now face uncertainty and reduced demand over the winter months.

What those businesses need is support to bring people back to work and protect as many viable jobs as we can.

To do that, I am announcing today the new Jobs Support Scheme.

The government will directly support the wages of people in work giving businesses who face depressed demand the option of keeping employees in a job on shorter hours rather than making them redundant.

The Jobs Support Scheme is built on three principles.

First, it will support viable jobs.

To make sure of that, employees must work at least a third of their normal hours and be paid for that work, as normal, by their employer.

The government, together with employers, will then increase those people’s wages covering two-thirds of the pay they have lost by reducing their working hours.

And the employee will keep their job.

Second, we will target support at firms who need it the most.

All small and medium sized businesses are eligible.

But larger businesses, only when their turnover has fallen through the crisis.

Third, it will be open to employers across the United Kingdom, even if they have not previously used the furlough scheme.

The scheme will run for six months starting in November.

And employers retaining furloughed staff on shorter hours can claim both the Jobs Support Scheme and the Jobs Retention Bonus.

Mr Speaker,

Throughout this crisis, we have sought parity between employees and the self-employed providing more than £13 billion of support to over 2.6 million self-employed small businesses.

So I am extending the existing self-employed grant on similar terms and conditions as the new Jobs Support Scheme …

Mr Speaker,

These are radical interventions in the UK labour market; policies we have never tried in this country before.

Together with the Jobs Retention Bonus, the Kickstart scheme for young people, tens of billions of pounds of job creation schemes, new investment in training and apprenticeships, we are protecting millions of jobs and businesses.

Mr Speaker,

If we want to protect jobs this winter, the second major challenge is helping businesses with cash flow.

Over the last six months, we’ve supported business with tens of billions of pounds of tax deferrals and generous, government-backed loans.

Those policies have been a lifeline.

But right now, businesses need every extra pound to protect jobs rather than repaying loans and tax deferrals.

So I’m taking four further steps today to make that happen.

First, Bounce Back Loans have given over a million small businesses a £38 billion boost to survive this pandemic. To give those businesses more time and greater flexibility to repay their loans, we are introducing Pay As You Grow.

This means:

  • loans can now be extended from six to ten years – nearly halving the average monthly repayment
  • businesses who are struggling can now choose to make interest-only payments
  • and, anyone in real trouble can apply to suspend repayments altogether for up to six months

No business taking up Pay As You Grow will see their credit rating affected as a result.

Second, I am also changing the terms of our other loan schemes.

More than 60,000 Small and Medium sized businesses have now taken out Coronavirus Business Interruption Loans.

To help them, I plan to extend the government guarantee on these loans for up to ten years, making it easier for lenders to give people more time to repay.

I am also extending the deadline of all our loan schemes to the end of the year. And we are starting work on a new, successor loan programme, set to begin in January.

Third, I want to give businesses more time and flexibility over their deferred tax bills.

Nearly half a million businesses deferred more than £30 billion of VAT this year.

On current plans, those payments fall due in March.

Instead, I will allow businesses to spread that VAT bill over 11 smaller repayments, with no interest to pay.

And any of the millions of self-assessed income taxpayers who need extra help, can also now extend their outstanding tax bill over 12 months from next January.

The final step I’m taking today will support two of the most affected sectors: hospitality and tourism.

On current plans, their VAT rates will increase from 5% back to the standard rate of 20% on January the 13th.

So to support more than 150,000 businesses and help protect 2.4 million jobs through the winter I am announcing today that we are cancelling the planned increase and will keep the lower 5% VAT rate until March 31st next year.

Mr Speaker,

Today’s measures mark an important evolution in our approach.

Our lives can no longer be put on hold.

Since May, we have taken steps to liberate our economy and society.

We did these things because life means more than simply existing.

We find meaning and hope through our friends and family, through our work, through our community.

People were not wrong for wanting that meaning, for striving towards normality, and nor was the government wrong to want this for them.

I said in the summer that we must endure and live with the uncertainty of the moment.

This means learning our new limits as we go.

Because the truth is the responsibility for defeating Coronavirus cannot be held by government alone.

It is a collective responsibility, shared by all.

Because the cost is paid by all.

We have so often spoken about this virus in terms of lives lost.

But the price our country is paying is wider than that.

The government has done much to mitigate the effects of the awful trade-offs between health, education and employment.

And as we think about the next few weeks and months, we need to bear all of those costs in mind.

As such, it would be dishonest to say there is now some risk-free solution.

Or that we can mandate behaviour to such an extent we lose any sense of personal responsibility.

What was true at the beginning of this crisis remains true now.

It’s on all of us.

And we must learn to live with it and live without fear.

I commend this Statement to the House.”

Alexandra Marsanu: Working from home – and why we need evolution, not a revolution

6 Sep

Alexandra Marsanu is a Ward Chair at Holborn and St Pancras Conservatives and Deputy Chair for London at Conservative Young Women. She works professionally as a strategy consultant.

A polarising debate has been taking place recently.  On one hand, there is a rare alliance between the Government, media and auxiliary businesses denouncing the impact of homeworking on highstreets, career growth and the mental health of the workers themselves. On the other, you see a majority of workers perfectly content to keep calm and carry on.

No more squeezing on the tube at rush hour; no more money wasted on soggy sandwiches and coffee; no more interruptions or time lost in pointless chitchat over what you did last weekend. An era of high productivity and improved home life is upon us. But would it really be that easy?

Rather than an expected gradual shift to flexible working driven by innovation in collaboration tools, an increase in the ‘gig economy’ or drive for decarbonisation, we have not been given time or choice.

Over the course of a few unusual days, offices were shut down and kitchen tables were seized for the new digital future of the 2020s. We have made do so well with Zoom and Teams and home-made banana loaf that office life seems from a bygone era – not fit for the modern days of self-driving cars and 3D printed buildings. But let’s not forget that they say ‘good things take time’ for a reason.

Although our homes may be packed with monitors and Amazon boxes, many business owners are looking at the empty chairs and aisles and wondering for how long they can still go on. The furlough anaesthetic is due to wear off, and with money quickly running out many are in for a tough autumn.

And for some, it may indeed be time to close shop. Why should taxpayers prop up a chain business just because they hire many people? For many others, it may be difficult to see the value in what they offer. Why would we need to go out and spend our hard-earned money on overcrowded trains and £3 coffee?

Of course, it is difficult to empathise with businesses. After all, the free market will take its tool eventually. But with a £2 trillion debt and still many months of uncertainty to come, there is a case for the economics that has worked so well until now.

Through the measures seen so far, the Government seems to be doing just that. Taking a page out of Keynesian economics, it’s looking to maintain today’s supply for when demand recovers, hopefully next year. And given how symbiotic our economy is, nothing makes more sense.

Many professional areas can be taken as examples. In consulting, banking and legal services the mix of industries needing support is under a constant shift. Where public sector work may be building up in the short term for areas such as consultancy, the impact of huge retailers or automotive companies shutting down is already playing out, and will do so during the months and years to come

Similarly, jobs supporting the most affected industries ranging from marketing to accounting may take a hit as cuts to the frontline are slimming down operations. Even a coveted career in technology may not be completely safe, since technology changes take years to implement and big players such as Accenture or IBM are already reporting job cuts in the past few months. If the impact is big enough, one way or another thange will reach all of us.

So what is there to do? Isn’t the Government’s job to save jobs? Is it really up to each of us to dash to the office so we can put yet another plaster on the economy? After all, we have already eaten our way towards the hospitability recovery last month.

Well, the fact of the matter is that we can’t just go back to the old ways. You see, there wouldn’t really be the space for all of us to go back in the office due to social distancing.

But we can’t expect that the world we see today is here for the long run. Not in an economy which is 30 per cent based on consumption. Unemployment benefits and a significant decrease in tax receipts will only divert from spending which can help make public services better or ease the debt for future generations. Considering a phased or rotational return to the office may be our best contribution until the tourists are back or workers can re-skill.

An exciting ‘future of work’ revolution is already here – one where we balance our work and home life in hybrid working patterns fit for a highly productive economy. And it may indeed be a useless pursuit to spend the money today in saving something that won’t be required tomorrow. But no revolution comes without pain and time to rebuild is what’s needed now.

The working from home revolution is coming whether we like it or not. Conservatives have little choice but to roll with it.

1 Sep

As someone who lives in a small studio in London, it comes as no bigger surprise than to myself to argue for the virtues of working from home (WFH).

Since Covid-19 kicked off, most of the nation has had a taste of WFH, and the issue of whether to continue with this format seems to have become as divisive as face masks.

On one hand, there are those who’ve enjoyed the experience. Getting to be around loved ones more, avoid the commute and even work in pyjamas has been ideal for them. Many have saved money in the process.

Others are not so enamoured with WFH. Perhaps they’re feeling cooped up in a small flat, constantly surrounded by X number of housemates, or simply miss seeing their colleagues. For those living solo, it can be an especially lonely experience.

The bad news for the Government is that the first camp seems to be dominant. 

Indeed, a report by academics at Cardiff and Southhampton universities found that nine in ten workers would like to continue working from home in some form, with almost half wanting to work at home often or all of the time.

To counter this, Boris Johnson is to unleash a publicity campaign which will make the “emotional case” for mixing with colleagues and reassure people that “the workplace is a safe place”. Furthermore, there will be a new online tool to help people avoid overcrowded buses and trains.

It’s not surprising that the Government is keen to get things back to normal. In London the effects of WFH are obvious; the streets are much quieter, and everywhere that benefits from office workers is experiencing less custom. It is troubling, given the extent to which the city powers the economy.

In regards to these trends, Conservatives can do two things. They can try to re-engineer the situation, pushing to get employees back – which isn’t very conservative, incidentally – or they can embrace the way the market is going (which is).

Whether WFH is the best option in the grand scheme of things is immaterial, just as wondering whether social media is good for human interaction, or if children should play video games, or if dating apps are the best way to meet a partner.

The fact is that these things are here, and they’re here to stay. It could be said that lockdown has merely accelerated an inevitable situation, as WFH was already becoming commonplace before this strange year.

I confess that previously I had wanted the Government to get everyone back to their office as fast as possible. I could see the impact on London businesses and was concerned, but it was a recent trip to Deal – yes, really – that rather reset my thinking on the issue.

All the spending I did in that week opened my eyes to the less-talked about, positive effects of the pandemic. For all its evils, it has breathed new life into previously quieter parts of the UK. It’s not only the boost in domestic tourism that will help, but that more people will be wanting to move to new areas.

For too long this country has been London- and city-centric, which the Tories set about tackling with their “levelling up” agenda. Inadvertently, however, Covid-19 will help them achieve this; now that people can live and work anywhere, other parts of the UK will benefit and develop – needing more coffee shops, restaurants and so on to make way for a new influx of employees.

Some of these changes will be especially good for young people – though it may not seem so right now. For one, WFH gives them the option of moving to a more affordable location, where they can actually – heaven forbid! – even buy a house.

There’s also the advantage for young workers that choose to stay in London. The more that others head for different parts of the UK, the lower rental and house prices become in the city (thus meaning that they will eventually be able to WFH in bigger spaces – or even have extra income to go to a co-working space).

Of course, as WFH critics point out, it’s by no means a perfect system. You don’t get the collaborative effects of an office space; you don’t get to switch off from work as much, and interns and junior staff trying to go up the career ladder may struggle if they can only make an impression on Zoom. Yes, we need our cities to thrive.

And yet, what is there to do to change the situation? Some workplaces will go back, but many won’t – and the best thing is to try to roll with it. That isn’t only advice for the Government, but businesses too, which could even create a situation in which staff get to choose if they want to return or not – investing in co-working spaces if they can, to offer that option.

All in all, though, there is no point trying to force an issue that workers are, by and large, voting for with their feet. From the environmental advantages (less commuting) to the flexibility WFH can give to families, Tories should re-evaluate their take on the issue. By all indications, their “levelling up” agenda could be already underway.

The working from home revolution is coming whether we like it or not. Conservatives have little choice but to roll with it.

1 Sep

As someone who lives in a small studio in London, it comes as no bigger surprise than to myself to argue for the virtues of working from home (WFH).

Since Covid-19 kicked off, most of the nation has had a taste of WFH, and the issue of whether to continue with this format seems to have become as divisive as face masks.

On one hand, there are those who’ve enjoyed the experience. Getting to be around loved ones more, avoid the commute and even work in pyjamas has been ideal for them. Many have saved money in the process.

Others are not so enamoured with WFH. Perhaps they’re feeling cooped up in a small flat, constantly surrounded by X number of housemates, or simply miss seeing their colleagues. For those living solo, it can be an especially lonely experience.

The bad news for the Government is that the first camp seems to be dominant. 

Indeed, a report by academics at Cardiff and Southhampton universities found that nine in ten workers would like to continue working from home in some form, with almost half wanting to work at home often or all of the time.

To counter this, Boris Johnson is to unleash a publicity campaign which will make the “emotional case” for mixing with colleagues and reassure people that “the workplace is a safe place”. Furthermore, there will be a new online tool to help people avoid overcrowded buses and trains.

It’s not surprising that the Government is keen to get things back to normal. In London the effects of WFH are obvious; the streets are much quieter, and everywhere that benefits from office workers is experiencing less custom. It is troubling, given the extent to which the city powers the economy.

In regards to these trends, Conservatives can do two things. They can try to re-engineer the situation, pushing to get employees back – which isn’t very conservative, incidentally – or they can embrace the way the market is going (which is).

Whether WFH is the best option in the grand scheme of things is immaterial, just as wondering whether social media is good for human interaction, or if children should play video games, or if dating apps are the best way to meet a partner.

The fact is that these things are here, and they’re here to stay. It could be said that lockdown has merely accelerated an inevitable situation, as WFH was already becoming commonplace before this strange year.

I confess that previously I had wanted the Government to get everyone back to their office as fast as possible. I could see the impact on London businesses and was concerned, but it was a recent trip to Deal – yes, really – that rather reset my thinking on the issue.

All the spending I did in that week opened my eyes to the less-talked about, positive effects of the pandemic. For all its evils, it has breathed new life into previously quieter parts of the UK. It’s not only the boost in domestic tourism that will help, but that more people will be wanting to move to new areas.

For too long this country has been London- and city-centric, which the Tories set about tackling with their “levelling up” agenda. Inadvertently, however, Covid-19 will help them achieve this; now that people can live and work anywhere, other parts of the UK will benefit and develop – needing more coffee shops, restaurants and so on to make way for a new influx of employees.

Some of these changes will be especially good for young people – though it may not seem so right now. For one, WFH gives them the option of moving to a more affordable location, where they can actually – heaven forbid! – even buy a house.

There’s also the advantage for young workers that choose to stay in London. The more that others head for different parts of the UK, the lower rental and house prices become in the city (thus meaning that they will eventually be able to WFH in bigger spaces – or even have extra income to go to a co-working space).

Of course, as WFH critics point out, it’s by no means a perfect system. You don’t get the collaborative effects of an office space; you don’t get to switch off from work as much, and interns and junior staff trying to go up the career ladder may struggle if they can only make an impression on Zoom. Yes, we need our cities to thrive.

And yet, what is there to do to change the situation? Some workplaces will go back, but many won’t – and the best thing is to try to roll with it. That isn’t only advice for the Government, but businesses too, which could even create a situation in which staff get to choose if they want to return or not – investing in co-working spaces if they can, to offer that option.

All in all, though, there is no point trying to force an issue that workers are, by and large, voting for with their feet. From the environmental advantages (less commuting) to the flexibility WFH can give to families, Tories should re-evaluate their take on the issue. By all indications, their “levelling up” agenda could be already underway.