Friday, 28 August, 2020
An ‘economic hurricane’ is brewing: Business chief warns the worst is yet to com
Ministers were warned today that businesses and workers will need months more financial assistance to avoid a second economic ‘hurricane’ in the autumn and winter.
British Chambers of Commerce director general Adam Marshall warned that a second storm after the furlough scheme ends in October could be worse than the original impact of the lockdown in the spring and summer.
He said that firms in areas struck by localised lockdown would need help to avoid creating a ‘checkerboard map of Britain’ contrasting those recovering and those stagnating.
He also called for extra support for workers once the coronavirus job retention scheme is ended in October, suggesting a cut in National Insurance Contributions (NICS) for employers, in an interview with Bloomberg.
‘We’ve been through the first wave of the storm, which is damaging and difficult and distressing, but in fact it’s the second leg of a hurricane or a typhoon that often causes the most damage,’ Mr Marshall said.
‘That’s what we have ahead of us.’
Mr Marshall also suggested extra help for sectors like the night time economy, aviation, travel, and the aerospace supply chain which are likely to be badly hit by coronavirus for a long time.
The also backed an extension of Coronavirus Business Interruption Loans and help to buy cheap coronavirus tests to allow workers to be checked more frequently.
Germany yesterday extended its furlough scheme until the end of next year at a likely cost of £27billion.
It is hoped that the move will help the economy to recover after the coronavirus pandemic saw the country’s GDP fall by 11.7 per cent over the first six months of the year.
More than 10.1 million workers, including one in three in the industrial sector, were on furlough at the peak of the Covid-19 lockdown.
But there are no plans to extend the scheme in the UK into the winter. The Government is trying to get the public back to work in order to boost the flagging economy.
Boris Johnson will launch a major drive to persuade more Britons to return to their workplaces as remote workers were warned they could be more at risk of being sacked.
The Government is increasingly concerned that continued working from home will deal a hammer blow to struggling town and city centres.
The Prime Minister is expected to step up his efforts next week to get more people back to their normal routines by reassuring the public that ‘the workplace is a safe place’.
he prospect of a new campaign to encourage commuters to return to their offices will be welcomed by Tory MPs who today warned that businesses in urban centres are facing ‘devastating consequences’ if things do not go back to normal.
But Labour has accused ministers of ‘threatening’ workers and of ‘forcing’ them to make an ‘unconscionable’ choice between their health and their job after a Government source said people who continue working from home could be the first to go if firms restructure.
Meanwhile, Transport Secretary Grant Shapps today said he believed there is a limit ‘in human terms’ to remote working as he argued people will want to return to workplaces to see their colleagues.
He insisted that public transport services will be increased if trains and buses get too busy when more workers resume their commutes.
But he faced criticism for telling people ‘it is now safe to return to work’ as he conducted a round of morning broadcast interviews from his home in Hertfordshire.
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