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The Rishi Rush Is On
During the coronavirus pandemic, there’s a constant danger of being blinded by the blizzard of numbers involved. Deaths in the thousands, cases in the millions, government spending in the billions or even trillions (the US stimulus package is the largest bailout in history at a cool $2.2 trillion).
But today, the sheer scale of economic risk was underlined when chancellor Rishi Sunak revealed just how many firms had applied for government funding to pay 80% of the wages of staff ‘furloughed’ during the crisis. In just 8 hours, 140,000 firms had applied (in fact 67,000 had applied in the first 30 minutes that the scheme went live). That’s a million workers who would otherwise have been laid off.
The figures will rise even further in coming days, as the rush is on to get wages sorted for the April 30 payroll deadline (and as the scheme needs six working days for payment, that means this Wednesday is the real deadline for applications for many). The Resolution Foundation think tank reckons between seven and 10 million people could be furloughed in total.
Sunak was right to say that the scheme itself is a huge achievement. Having pledged it would be up by the end of April, the chancellor said “today, we deliver our promise”. Health secretary Matt Hancock may have been watching with some envy, given his own huge promise of 100,000 tests a day by the end of the month is ultimately now in the hands of the private sector, not the state.
And Sunak was right too to pay tribute to the staff at the Treasury and HMRC, including those who came out of retirement and “worked around the clock from their kitchen tables and spare rooms” to implement the new system.
Credit should perhaps go too to former minister Greg Clark, who first proposed the elegantly simple solution of reverse engineering the tax system. “Instead of firms paying PAYE to the government, that flow should now be reversed,” he urged ministers exactly a month ago. Still, we should be grateful for Sunak or Boris Johnson aren’t following Donald Trump in putting their own signature on cheques sent to workers.
Of course, it’s a massive technological and administrative task to process the claims quickly (one that would have been easier if thousands of HMRC staff had not been culled during austerity). The Treasury claims its Coronavirus Job Retention Scheme (dubbed ‘CJRS’ today by Sunak in a moment of jargon-filled Hancockery) can process up to 450,000 applications per hour. Huge, if true, as the saying goes.
Most notably, Sunak refused to deny claims that the Treasury’s own analysis was more pessimistic than the ‘V-shaped’ quick recovery suggested by the Office for Budget Responsibility. Asked about the likelihood of a U-shaped or even a W-shaped recovery, he simply said ”you would expect any Chancellor” to have plans “for a range of different scenarios”.
Sensible contingency planning is just that, sensible. Especially as Sunak stressed that the fifth of Dominic Raab’s five tests for easing a lockdown was “the most important” one: being “confident” any relaxation would not risk a second peak of Covid-19 cases that could overwhelm the NHS. Still, planning for a slow recovery feels ominous.
And as we ponder those big numbers again today, it’s worth exercising the same pause for reflection that ministers now ritually (and rightly) recommend whenever they list death figures, saying each one is an individual tragedy. Each of those one million jobs possibly saved today by Sunak’s scheme is a family on the brink.
The government is right to firmly link the economic and health aspects of the outbreak, rather than pitting one against the other. But away from the job retention scheme, which has cross-party backing, there’s one area of policy that certainly lacks consensus: the Immigration Bill. Don’t forget that foreign workers make up a sixth of the 840,000 social care workforce in England.
Many fear that it effectively equates low pay with low skills and sets a points system that will rob an already under-staffed sector of invaluable workers.
Given that the government is not in the mood for contentious legislation right now, will it pull the Immigration Bill (due to be the first bit of business for MPs on their return tomorrow)? What once felt like a bit of timetabling to ‘trap’ a new Labour leader on a ‘culture war’ issue now looks fraught with political danger for ministers instead.
Quote Of The Day
“That’s certainly an interesting hypothesis you raise there.”
Deputy chief scientific adviser Angela McLean on whether allowing the Liverpool-Atletico Madrid champions league match to go ahead caused lives to be lost
Monday Cheat Sheet
The number of UK coronavirus hospital deaths rose by 449 to 16,509. But the number of people in hospital with the virus appears to be flattening, with London seeing its seventh day running of falling cases. Yvonne Doyle, the Public Health England medical director, said she hoped the trend would be repeated in other areas.
BBC political editor Laura Kuenssberg reported that ‘senior figures’ in government now admitted that they were “a fortnight behind” in getting enough testing and protective equipment to cope with the virus.
An RAF aircraft left the UK for Turkey to pick up a delayed delivery of protective kit amid a row over a shortage in the NHS. It aims to collect 400,000 gowns.
NHS Providers chief executive Chris Hopson revealed that the shortage of gowns had led some hospitals to wash single-use protective gowns at 60C so they can be used several times by frontline staff.
The price of US oil has dipped below zero for the first time in history. Oil producers are paying buyers to take the commodity off their hands over fears that storage capacity could run out in May.
What I’m Reading
The Real ’28 Days Later - Matt D’Ancona
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