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Economy
Difficult to find fairness amid the Covid crisis | Letters

The chancellor’s efforts to support the economy amid the Covid crisis are welcome. But it is worrying that while he freely accepts that many livelihoods will be put in jeopardy, he tells people they should not be afraid about the future (Tory lockdown sceptics praise Sunak for saying UK must live ‘without fear’, 24 September).Since lockdown was relaxed and infection rates have increased, there is a growing tension across generations involving the distinction between lives and livelihoods. As a retired person I have worked my shift, I am fortunately comfortably off and own my home like so many of my generation. I am aware and able enough to look after myself during this crisis, but far too often I hear my peers carping about how younger people are to blame for the growing problems. I am not talking about reckless and stupid behaviour – that is never acceptable – but people having to make difficult choices just to survive.There seems to be an expectation that people working to maintain themselves and their families under huge pressure should be more worried about me and my lot. This is wholly unfair. We should be doing everything in our power to protect and

Economy
Sunak's winter plan is the shadow chancellor's chance to fight back

The job of shadow chancellor is one of the toughest in politics. Your opponent can call on the full weight of the Treasury and can actually do stuff. It is always a struggle to be heard.In theory, life should have been a bit easier for the current shadow chancellor, Anneliese Dodds, because she took over from John McDonnell just as the economy was falling into the Covid-19 abyss. It normally helps not to be in charge when the country is going through a monster recession.But it has still not been easy for Dodds. Over and above the normal difficulties associated with being shadow chancellor, she has faced three additional problems: a Labour party shellshocked from defeat last December; a government that has responded to the crisis with policies Labour would have followed had it been in power; and a chancellor who has gone out of his way to be consensual.So would Labour have introduced a furlough scheme? Clearly, yes. Did it have a problem with state control of the train operating companies? No, it didn’t. Would Dodds have followed Rishi Sunak’s example and invited Frances O’Grady, the TUC general secretary, to Downing Street for talks about what the government ought

Economy
Tory split on coronavirus has seen off any joined-up strategy | Phillip Inman

It would help if the cabinet could agree. Yet for the past seven months it has remained deeply divided, squabbling over the scientific advice and what Covid-19 might mean for the nation’s health and jobs.Britons have become familiar with a bewildering, almost weekly stream of tactical policies, twisting this way and that, many of them in direct opposition to each other.There was no better example than Rishi’s dinners, the eat out to help out (EOTHO) subsidy that sent millions of people into pubs, restaurants and cafes during August.With only a few rules in place dictating how businesses should conduct themselves, it became a feeding frenzy. While many establishments invested in thermometer guns to test customers on entry, and rejected people calling themselves Minnie Mouse for the purpose of track and trace, many did not.Such was the parlous state of the UK’s track-and-trace system during the summer, that we will never know how much this contributed to the spread of the virus. It could be that the escalating infection rate seen last week was fuelled by this one policy.What we do know is that the EOTHO idea was met with dismay by health minister Matt Hancock and triggered an even more

Economy
UK furlough scheme will fail to prevent 1m losing jobs, say experts

The chancellor’s multibillion-pound subsidy for part-time working will fail to prevent another one million workers losing their jobs by the middle of next year, leading economists have said.Young workers and those at the bottom end of the income scale will be the hardest hit as employers continue to shed workers in the period before the end of the furlough scheme next month.Rishi Sunak said this week that he expected many of the estimated 3 million workers currently on furlough would return part-time after the Treasury’s winter economic plan, which put in place a series of measures to underwrite the finances of the worst-hit businesses.But the consultancy Capital Economics said the unemployment rate, which has been subdued while millions of workers remain on furlough, would probably rise towards 7% by the end of the year, implying that more than a million people would become out of work.Ruth Gregory, a senior economist at the firm, said: “We suspect the effect of the government’s restrictions announced this week and the possibility of tighter restrictions in the coming months will outweigh any downward impact on unemployment from [Sunak’s] fiscal package.“That’s why we expect the unemployment rate to rise further, to at least 7% by

Economy
The Guardian view on the EU economy: adopt, not outlaw, Keynesian policies | Editorial

In an emergency, the normal rules do not apply. Coronavirus has shown the EU can do things differently. Early on the commission dumped its obsession with balancing the books. The prohibition on monetary financing of government debt by the European Central Bank (ECB) was dropped. This allowed member states the freedom to mitigate the damage of a Covid recession without worrying too much about borrowing levels.That fear was well-founded. The EU had used high debt levels as a reason to intervene in public policy. Emma Clancy, an economist for the leftwing block of MEPs, has noted the commission had used debt burdens to ask member states to cut spending on, or privatise, healthcare services 63 times between 2011 and 2018. In the EU there is often an Olympian disdain for critics of its fiscal and monetary rules. This is understandable. No one likes to be reminded of one’s own mistakes.But the EU’s architecture needs a shake-up. The bloc was on the edge of recession before coronavirus sent member states into a slump. The EU was wrong not to take a long look at itself after a decade of needless mistakes. In 2012 rigid adherence to its rules converted a private

Economy
What's missing from the chancellor's new scheme to save jobs?

Rishi Sunak’s winter economy plan prioritises additional support for “viable” jobs. However, critics have warned that other measures are still needed to help people who have already lost their jobs or will lose them despite the new government scheme.Here are five measures that could help keep workers in jobs, but were missing from the chancellor’s winter economy plan:Universal creditThe chancellor increased the value of universal credit by £1,000 for 12 months as the pandemic spread to Britain in March. However, this is due to expire in March next year, and there has been pressure to make the increase permanent.The number of people claiming unemployment-related benefits has increased by more than 120% since March, reaching more than 2.7 million. With more redundancies expected when furlough ends in October, increasing the value of universal credit could have been used to protect workers while they look for a new job.Economists said other changes to the benefits system could have been made to help households through a difficult winter. Even after the universal credit boost in March, the Institute for Fiscal Studies estimates families falling out of work will get £1,600 less on average than in 2011 before the Conservatives’ austerity drive.Job creationCritics said

Economy
Tory lockdown sceptics praise Sunak for saying UK must live 'without fear'

Lockdown sceptics in the Conservative party have heralded comments by the chancellor saying that Britons must learn to live “without fear” and highlighting the importance of human contact and social interaction.In his closing remarks to parliament, Rishi Sunak appeared to launch a defence of the decision to reopen swathes of the economy over the summer and encourage people back into restaurants with the eat out to help out discount scheme.The chancellor said “lives can no longer be put on hold” and that the move to allow pubs, shops and leisure facilities to reopen was about more than just the economy.“We did these things because life means more than simply existing. We find meaning and hope through our friends and family, through our work, through our community,” he said.Sunak hinted he did not believe the UK public were to blame for a resurgence of the virus because they had taken up the opportunity. “People were not wrong for wanting that meaning, for striving towards normality, and nor was the government wrong to want this for them,” he said.Sunak said there was no “risk-free solution” and that everyone “must learn to live with it and live without fear”.A number of Conservative MPs

Economy
What is Rishi Sunak's job support scheme and how will it work?

The chancellor, Rishi Sunak, has announced a replacement for the coronavirus job retention scheme based on a German-style system of wage subsidies.Faced with the prospect of rising job losses this autumn when furlough closes at the end of October, and tougher restrictions on the economy as the pandemic worsens, the “job support scheme” forms the backbone of his winter economy plan.How does the new scheme work?The government will contribute towards the wages of employees who are working fewer than normal hours. However, there are concerns workers at companies forced to close because of coronavirus restrictions – where no working hours may be possible – will be left without support.Employers will continue to pay the usual wages of their staff for the hours they work. For hours not worked, the government and the employer will each pay one third of the equivalent salary.Who is eligible?The employee must not be on a redundancy notice, in a step designed to encourage companies to retain staff.For the first three months of the scheme, the employee must work at least 33% of their usual hours. The government will review whether to increase the threshold after three months.Employees will be able to “cycle on and off”

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