Good the Chancellor is moving swiftly after PM ramped up covid restrictions yesterday - measures to save lives should be accompanied by the measures that help save livelihoods (less excuse than in March for gaps between the two)
The Chancellor's tasks? Enable us to do what is necessary to suppress the virus, while also suppressing the (now sadly inevitable) rise in unemployment
That doesn't mean just repeating what we did back in the Spring - because we're not putting the whole economy on ice any longer (and because the hopes that we were dealing with a short sharp shock are long gone)
Policy response now needs to be targeted at where the pain is now focused - hospitality and leisure where 4 in 10 workers were still furloughed at the end of July
Sometimes it looks like the debate is between "extend the furlough scheme" vs "we can't subsidise zombie jobs". That is not the choice. Instead policy should aim to maximise work that is done in hardest hit sectors as their output is temporarily lower until next year. How?
A part time working scheme (ie you return to work for half your previous hours and govt pays some of your lost wages for the other half) would help share out the reduced work in these sectors = smaller unemployment rise
Should be accompanied by a wage subsidy for the hours people do work in hard hit sectors (ie govt pays 10% of restaurants wage bills) because tackling covid = ⬆️costs of doing business. We need to make labour cheaper so that for any given revenue hit we get lower redundancies
Lots of nonsense talked about it being impossible to target help to hardest hit firms. Either 1) focus on certain sectors (restrictions are now sector specific - if we can target them we can target the help) 2) achieve the same objective by using a covid-related revenue fall test
These measures would help more people keep working in hard hit sectors and reduce NOT prevent a large rise in unemployment. So we need to protect incomes = Government should reverse it's plans to cut £1000 from Universal Credit next April, when unemployment will remain high
Keeping unemployment down isnt just about fewer people moving into it - we need more moving back out of unemployment and into work. A quick look at the vacancies data (still down on pre-crisis) and tanking private sector investment should make us worried on this front...
...so the Chancellor should also be announcing direct job creation e.g in social care. Precisely because this is a 1) very uncertain 2) temporary pre-vaccine phase firms wont be able to create jobs remotely fast enough. Yes online retail will expand fast but it's not enough
Before you say "the UK's flexible labour market will see new jobs surging" remember that flows back out of unemployment into jobs didnt really get going again after the financial crash until 2014 - 6 YEARS later
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Understandably lots of debate about child poverty this morning – something we as a country should spend much more time focusing on
The context here is the first Labour Kings Speech in 14yrs – implementing a manifesto just endorsed by the election result. No-one should be surprised that 98+% of Labour MPs voted for it/against amendments from other parties. That’s business as normal just days after an election
More importantly we shouldn’t confuse parliamentary procedure with what actually matters - reducing child poverty, something I’ve spent my life working on – in the last Labour government (which did exactly that) and ever since.
The case for @RachelReevesMP’s sweeping changes to the planning system announced today…
1. For 15yrs, we’ve been attempting to dig a tunnel under the Thames. No digging has taken place, but £800m has been spent & 9k pages of planning applications drafted. This is double what Norway spent actually building Lærdalstunnelen, the world’s longest road tunnel…
2. If we want net zero to happen, and to happen without higher costs, then things are going to have to be built. Things that not everyone loves. And they will also have to be built if we want our firms to be able to invest, grow and pay higher wages
This is yet another example of total tax policy chaos - this proposal is to reintroduce the exact same higher tax allowance for pensioners that George Osborne abolished a decade back. As with the personal allowance & corporation tax it’s going back to square one (ie Gordon Brown)
What is going on? A Tory panic that recent tax rises having been particularly large for richer pensioners (see the blue bars) rather than having confidence in all pensioners having gained from the triple lock (red bars)
Lots of focus on whether the radicalism of Labour's proposed employment law changes are being neutered - but the discussion is weirdly abstracting from the specifics and 'watering down' talk is overdone - this is largely the inevitably turning of slogans into govt action. Quick🧵
Here's @PickardJE list of what he thinks @AngelaRayner programme is. Let's take each in turn
1. creating a single "employee" status. This is about merging current "employee" & "worker" categories + clarifying boundary vs self-employment. It's a fiendishly difficult technical task - if you think it can be done without consultation you've never looked at any employment law
Time to talk Universal Credit. We're 10yrs into its roll-out, so understandably interest has waned. But it's impact on Britain has built - whoever wins the next election will be governing a "Universal Credit Britain" with 7m families - and big winners and losers - on it by 2029🧵
In 2019 the debate was whether to scrap Universal Credit, as Labour proposed. This time is very different. The pandemic showed UC had big advantages (processing millions of claims fast) and the roll-out has gone way too far to be reversed. So we should focus on its impact
What makes this difficult is that UC was introduced at the same time as big cuts to benefits. It's those cuts NOT UC that mean 71% of families are worse off on UC today than the legacy benefits it replaced as they were in 2013/14 (overall the change = average £1,400 worse off)
This is a REALLY good tool, that busts the myth that the biggest problem facing deprived areas is that there talented young people leave. Let's take the case of Hartlepool... 🧵
Overall, young people growing up in Hartlepool are less likely to get a degree than the national average. You already knew that. Let's get to what's interesting
Of those who do get a degree they are far far MORE likely to stay in Hartlepool than graduates generally are to stay where they grew up. The brains are not draining despite what you're always told.