Sunak's summer splurge: reaction
Thursday, July 9, 2020
There has been a mixed reaction to chancellor Rishi Sunak’s £30bn package of additional measures intended to stave off a spike in unemployment, boost training and provide a fillip to the hospitality and leisure sectors.
Amid fears of mass redundancies as the Job Retention Scheme comes to an end in October – and thousands of job losses already announced this week by big businesses – Sunak announced a new job retention bonus for employers who keep staff employed until the end of January 2021 in his summer statement yesterday (8 July).
This will involve a payment of £1,000 per employee kept on.
A range of grants are being made available to encourage work placements, training and apprenticeships for young people, along with additional help for job seekers of all ages.
The VAT rate will be slashed from 20% to 5% from 15 July to 12 January 2021 for restaurants, hotels, B&Bs, cinemas, and attractions such as theme parks.
In addition, the new ‘eat out to help out’ scheme will involve discounts of up to £10 per head for people eating out on Mondays, Tuesdays and Wednesdays throughout August.
Other measures included cutting stamp duty on homes valued at up to £500,000 until 31 March 2021.
BPIF chief executive Charles Jarrold commented: “Commercial print has been impacted really severely by the shutdown, particularly of retail, hospitality and leisure. What we've fed back [to government] and what I've said repeatedly is that this is a real demand-led problem and until demand comes back, the impact on our sector will continue to be severe.
“We have been really worried about the job retention scheme ending in October, potentially before the demand comes back. I think the message that demand is a real challenge, and people aren't out spending has got through to government. I would say overall, for a Conservative government, this is a really imaginative attempt to stimulate demand and get people out and spending.”
He said the job retention bonus was a “valiant attempt” to head off large-scale job losses, but warned that it might not be enough as printing industry bosses move to reshape their businesses in line with reduced demand.
Jarrold welcomed the attempt to boost apprenticeships and training.
“They are trying to stimulate apprenticeship training and I think that's good news. We've had a lot of discussion about other things they could do about reducing the level of bureaucracy around apprenticeship training. That's not been announced in the statement, but we'll continue to work on that, to try and make it easy particularly for small and medium sized businesses to recruit apprentices, but they do recognise the importance of apprentices and I think that the statistic he quoted was that 91% stay with employment.”
Industry bosses have also been digesting the likely impact of the new measures.
“For someone who has been chancellor for just a number of months, I think Rishi Sunak has done an extraordinarily good job in an almost impossible situation,” said Scott Pearce, managing partner at Hatfield print and marketing agency Datum.
“I think confidence and ‘some’ normality are vital to rebuilding the economy, and bringing furloughed staff back to work is key to this. Fear and uncertainty are hurting our economy, businesses need incentives and help to take the leap of faith to bring back staff, and this is what Rishi has delivered.”
Tony Bates, managing director at Nottingham-based Fast Graphics, said he “broadly welcomed” the measures, but felt that some opportunities had been missed.
“I feel a missed opportunity is greater support for local authorities, who have been victim to austerity for many years and are left struggling to cope with the pandemic effect. Providing more support to them would facilitate more locally targeted support, such as dealing with the fallout from the collapse of the high street,” he noted.
“From the perspective of Fast Graphics we have survived the pandemic well, with a very limited period of inactivity, more than made up for by record production levels on social distancing products. What has become very clear is the need to react rapidly to a changing market, producing new products, supported by strong marketing.
“We are already receiving speculative job applications from many within the industry with the end of furlough in sight. By continuing to react quickly to the market and reinventing ourselves I firmly believe we will avoid job cuts and have a secure future,” Bates added.
However, some of Sunak’s measures have also been criticised for not being sufficiently targeted, with the blanket nature of the job retention bonus set to benefit companies that don’t actually need the support.
Unite general secretary Len McCluskey said: “The jobs retention bonus barely touches the sides of what needs to be done to support our strategic industries, who are looking enviously across the Channel at governments giving up to two years’ support to help businesses and workers get back on their feet.
“Where was the long-term and creative approach urgently needed to protect the jobs of Britain’s workers – such as short-time working – while we build back demand?” he added.
The ‘Excluded UK’ action group, which includes some printing industry SMEs and contractors, also said that it was disappointing that Sunak “had no support to offer the three million UK taxpayers who continue to be excluded from meaningful Government Covid-19 support”.