Last week, Chancellor Rishi Sunak made a series of overdue changes to his Winter Economy Plan. In doing so, he and the government showed that they have finally listened to the concerns expressed about the package when it was rolled out last month. But although the changes are welcome, jobs have already been unnecessarily lost because of the Chancellor not getting things right first time around.
In Parliament, Sunak set out three main elements of his revised financial support for steering the country’s economy through the next phase of Covid-19.
One was an overhaul of the Job Support Scheme, reducing the amount of time an employee of a business struggling to remain open needs to work in order to be eligible for financial support to 20% of their normal hours (down from 33%) and reducing the employer’s contribution for hours not worked to 5% (down from 33%).
This re-write means the government will step in and cover a larger proportion of an employee’s lost wages. However, while it is good that the Chancellor has heard the choir of concerned voices that pointed out the flaws in the scheme when it was launched back in September, a number of Londoners will have spent the past month worrying about the survival of their businesses and whether they would have a job to go to in the coming weeks.
Worse still, some businesses will not have felt able to wait for the Chancellor’s U-turn and already made people redundant out of fear of what would happen when the furlough scheme ends at the end of this month. Jobs that might otherwise have been saved have already been lost because the original incarnation of the scheme fell short.
Another of Sunak’s three main changes was in support given to the self-employed. Help for those Londoners will also increase compared to what the Chancellor announced on the 24 September. However, this does not go far enough. Under the new plans, the self-employed will be eligible for a loan which covers only 40% of their average trading income. How many Londoners can afford to pay their mortgages or rent, as well as feed their families on just 40% of their regular money?
And by failing to widen eligibility for the scheme, the millions of workers across the UK as a whole who fell through the cracks in the Self-Employment Income Support Scheme during the first wave of the pandemic are set to miss out yet again.
The third main element of the announcement was additional support for the hospitality, leisure and accommodation sectors. Kate Nicholls, Chief Executive of UK Hospitality made clear earlier this month that “the financial support on offer must go further if tragic levels of closures and redundancies are to be averted”.
Like Nicholls, I welcome the fact that further help has materialised, enabling London’s local authorities to issue grants to some of the hotels, restaurants and pubs in their area which have have seen their levels of trade plummet as London has come under Tier 2 High alert Covid-19 measures. It is only by having this combination of economic support and public health restrictions that we can protect both the economy and health of our city.
The Chancellor should be given some credit for changing course. It will come as a relief to business owners and employees that he has done so. However, too many Londoners will have already lost their jobs as a result of the dither and delay in tearing up the flawed first plan. Businesses struggling to stay open and families worried about their household finances need greater certainty. The government must start getting its response right at the first time of asking. The price of failure will be a grim winter and a less-than merry Christmas for all too many Londoners.
Leonie Cooper is a Labour London Assembly Member and represents the Merton & Wandsworth constituency. She is also leader of the Labour group on Wandsworth Council. Follow Leonie on Twitter. Image from BBC TV.
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