1. Economics
May 12, 2020

Morning briefing: Rishi Sunak extends and amends UK furlough scheme

By Samuel Horti

Good morning.

Today, Chancellor Rishi Sunak is expected to extend the government’s furlough scheme until the end of September. From July, workers will only receive 60 per cent of their wages from the scheme, rather than the current 80 per cent, according to reports. Employees will be able to work part-time, with the government topping up their salary.

Sunak, due to speak in the House of Commons at 12:30pm, has previously said the scheme is economically unsustainable in its current form, but Labour deputy leader Angela Rayner warned that the government might “pull the rug from underneath people’s feet” by reducing payments too early, causing more damage in the long-term. Prime Minister Boris Johnson, for his part, pledged yesterday that the government would continue to support the “lowest-paid people in our society”. More than six million people from 800,000 companies are currently getting paid through the scheme. 

Last night, the government published Covid-19 guidance for businesses, which includes instructions for employees to take “all reasonable steps” to help people work from home, and to carry out a Covid-19 risk assessment in consultation with employees or trade unions. All businesses with over 50 employers are expected to publish their assessment online. Companies should redesign workplaces so that workers can stay two metres apart, erecting barriers in shared spaces and staggering start times to minimise contact.

The Trade Unions Congress, which has repeatedly criticised the government in recent days, called the guidance “a step in the right direction”. But with the government telling employees to return to work tomorrow if they cannot work from home, businesses have been left with little time to make their workplaces safe.

Finally, Health Secretary Matt Hancock this morning refused to say whether people have a legal right to refuse to go to work if they do not feel safe. Instead, he called for a “collaborative effort” between workers and employers. Asked a second time, he said: “Well, employment law has not changed, but that isn’t the point. The point is that businesses and employees should be working together to make the best of a very difficult situation.” The government’s calls for voluntary collaboration will leave many workers worried; yesterday, Johnson said he was “sure employers will agree” that people can stay home if they cannot arrange childcare.

Global updates:

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China: China has reported no new domestic cases in a 24-hour period. It follows two days of new double-digit infections, including in Wuhan, which had fuelled fears of a second spike of infections.

US: Dr Anthony Fauci, a leading figure in the country’s coronavirus task force, will today warn the senate that reopening the economy early risks “needless suffering and deaths”, according to the New York Times. President Donald Trump has complained that states are lifting restrictions too slowly, and yesterday said the US had “prevailed” over the virus. The number of deaths passed 80,000.

Russia: President Vladimir Putin has eased lockdown restrictions by sending some sectors back to work, even as Russia recorded a record number of new coronavirus cases.

Germany: New cases jumped to 933 on Tuesday, up from 357 on Monday. It’s not clear whether the rise is due to the country easing lockdown, or to a delay in reporting figures from the weekend.    

Australia: Australian GDP will shrink more than 10 per cent in the three months to June, treasurer Josh Frydenberg has forecast, while unemployment will double to 10 per cent.

Singapore: Some businesses, including hairdressers, cake shops and laundry services, will reopen for the first time today. Both staff and customers will have to check in and out using a government app to allow for contact tracing.

Read more on the New Statesman:

Boris Johnson’s irresponsible government is rapidly losing authority

Boris Johnson’s Covid-19 threat alert system is a parody of mathematical precision

Yanis Varoufakis: Covid-19 has “turbocharged” the EU’s failures

The government’s “Stay Alert” slogan is working too hard

Is coronavirus leading to a rise in eco-fascism?

Despite the spin, little has changed over England’s lockdown

Read More

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