Rishi Sunak Offers £1 Billion Rescue Package to Hospitality Sector

Pubs, restaurants and leisure businesses hit by omicron losses will be eligible for one-off grants of up to £6,000 in a £1 billion Christmas aid package announced by Rishi Sunak earlier today. Hospitality bosses say it’s too little, too late. The Telegraph has more.

The Chancellor said some 200,000 hospitality and leisure businesses would benefit from the grants to compensate for an average 40 per cent fall in revenue from the Government’s ‘Plan B’ restrictions in the run-up to Christmas.

The cash awards will vary according to the size of the business with those with a rateable value of more than £51,000 eligible for the full £6,000, those between £15,000 and £51,000 being offered £4,000 and smaller operations getting £2,666.

There will also be £100 million discretionary funding to be distributed by councils to other businesses hit by Covid restrictions this festive season.

The Government will also reintroduce its scheme to cover the cost of statutory sick pay for Covid-related absences for small and medium-sized employers across the U.K.

However, the package is unlikely to satisfy hospitality and leisure chiefs who have been hit by cancellations and face further uncertainty. The Prime Minister on Monday refused to rule out further restrictions, including a possible return of a ban on indoor drinking and eating.

Worth reading in full.

Australian Care Home Residents May Have Died From Neglect After Staff Were Furloughed

St. Basil’s Home for the Age in Melbourne has faced an inquiry to answer why 50 residents of the care home died between July and August 2020. It has been uncovered that the existing staff were furloughed, meaning that the facility could not provide enough personnel to adequately look after the residents, leading to severe cases of neglect, with one resident left unable to speak due to dehydration. The Australian Associated Press has the story.

In an opening statement counsel assisting Peter Rozen QC said staff at the home were deemed ‘close contacts’ and furloughed on July 22nd, with the Commonwealth taking over the home despite multiple warnings that regular staff should not be replaced.

He said one doctor involved in the response, Dr. Rabin Sinnappu, warned that furloughing St. Basil’s staff would result in disaster, while another doctor described it as a “shocking” idea.

Rozen said a lack of care for residents had become apparent by the end of the first day of the takeover, after the Federal Health Department could not find enough new staff.

“There were far too few of these workers at St. Basil’s for them to have provided care at the level the residents deserved and the law required,” he said.

The court heard that by July 23rd, pathology staff visiting to test residents found the conditions “shocking to say the least”.

The Medical Director of Melbourne Pathology, Dr. Ellen Maxwell, alerted the Victorian Health Department in an email that Covid-positive residents were mixing freely with others, bins were overflowing, PPE had not been cleared and medication was on the floor.

She said one staff member was in tears, appalled that a patient who had died was wheeled out of the home with no attempt to clear the corridor of people.

The first witness at the inquest was Christine Golding whose mother Efraxia, 84, caught the virus at the home.

She testified that St. Basil’s had provided good, culturally appropriate care for her mother, but during the outbreak her mother’s treatment was inhumane and degrading.

Although Efraxia could not feed herself, several trays of food were found left in her room, and at one point she was no longer able to talk due to dehydration and lack of food, Golding said.

She recalled the facility manager warning that if staff were furloughed, people would die from neglect rather than Covid.

“That sent a shiver up my spine,” she told the hearing.

During the outbreak a group of residents’ families met outside the home, and when staff would not tell them who was in charge, they began banging on the windows until the police were called, she said.

“It was a state of chaos and desperation… the anger was driven by fear,” she said.

“Australians deserve to know why our aged care Covid preparedness was so poor, why it spectacularly failed my mother and contributed to her premature death.”

Rozen said the inquest would not lay blame on the workers brought in to care for St. Basil’s residents, saying the evidence would show a number of them went “above and beyond”, but the circumstances were impossible.

He also explained that an expert report would show the delay between the notification of the first Covid case at the home on July 9th, and test results becoming available on July 17th, was a root cause of the failure to contain the outbreak, as was a lack of co-ordination between state and federal health departments.

45 residents died from Covid, but the inquest is also covering five other deaths at the home during the same period.

Worth reading in full.

One in 16 U.K. Businesses Could Close In Next Quarter

A million jobs are at risk due to the ending of lockdown support schemes, with a new study suggesting that one in 16 U.K. firms are poised to close permanently in the next quarter following more than a year of forced temporary closures. The Guardian has the story.

One in 16 firms say that they are now at risk of closure in the next quarter, the study by the LSE’s Programme on Innovation and Diffusion (POID) has found. While it marks a major rise in confidence since the worst depths of the pandemic in January, there are warnings that the risk to so many workers coincides with the planned end of the furlough jobs scheme and a cut to universal credit by £20 a week.

There are also concerns that some industries are still being hit disproportionately by the fallout from Covid, with the entertainment and travel industries still making heavier use of the furlough scheme than other sectors. The number of people being paid through the U.K. scheme stood at 1.9 million at the end of June and it is due to close at the end of next month.

Huge uncertainty remains over the economy’s direction in the next six months. While confidence has risen, there are warnings over complacency. Former Prime Minister Gordon Brown, who founded the Alliance for Full Employment group to promote jobs protection and work creation programmes, said “a new jobs crisis point is approaching as furlough ends”. …

Peter Lambert, one of the authors of the POID research, said the end of the furlough scheme would be “an inflection point” where the economy could go either way. He added: “I think there will probably need to be some continuation of support in specific sectors. My bet is there’ll be more targeted support, because unless the economy really, really picks up, there’s going to be lots of people still left in the lurch in specific sectors.”

There are also concerns over the impact on families switching from furlough support to universal credit, especially as the £20-a-week increase brought in at the start of the pandemic is to be withdrawn this autumn.

Worth reading in full.

Up to 350,000 Young People Could Lose Their Jobs as Furlough Comes to an End

Young people have been the most reliant on furlough and will likely be the hardest hit as the scheme comes to an end, according to the Institute of Fiscal Studies (IFS). There are already 50,000 more unemployed people aged 19 to 24 compared to pre-lockdown levels, and the IFS says in a new report that a further 350,000 people in this age bracket may lose their jobs in the coming months as job support money dries up. The Telegraph has the story.

In a new research report, the IFS says the age group saw the biggest increase of any age group in the numbers not working any hours, including those who are furloughed. 

The number rose by 25%, or around 400,000 people, from the last quarter of 2019 to the first quarter of 2021 – a significantly higher increase than those seen in older age groups.

The vast majority of those jobs have, so far, been saved by the furlough scheme, with only 50,000 additional 19 to 24 year-olds without any job at all in early 2021 compared with pre-pandemic.

But this means the 19 to 24 year-old age group is especially vulnerable as the furlough scheme is wound down.

At the same time, unlike for older workers, earnings growth among younger employees (aged 19 to 34) who have continued to work has been lower than prior to the pandemic. 

This may not have large immediate consequences, but if this ground is not regained then the longer-term effects on their incomes will be significant, said the IFS.

Xiaowei Xu, a Senior Research Economist at IFS and co-author of the report, said: “Young adults have been especially likely to be furloughed during the crisis, though relatively few have completely lost their job.

“Many have responded to this by staying or moving back in with their parents – providing temporary protection for their living standards. 

“But we know that shocks early on in people’s careers can have negative effects on their future job prospects. Without effective support, there is a risk that young people today will bear the scars of the recession for years to come.”

It follows previous research by the IFS which found that young workers are twice as likely as older colleagues to have lost their jobs, although graduates were less than half as likely as those without degrees to have fallen out of work. 

By the autumn, the number of graduates in paid work had fallen seven per cent, a drop of about 800,000 people, but the number of non-graduates was down by 17%, or 1.5 million, showing the much more severe impact on those with less education.

Worth reading in full.

Michael Gove Hints at Extension of Furlough Scheme

The Government is “open minded” about extending the furlough scheme, according to Michael Gove, amid pressure from Nicola Sturgeon. Gove insisted that spending in response to Covid will remain high to help the country “build back better”. The Evening Standard has the story.

Scottish First Minister Nicola Sturgeon will use a Four-Nations Summit with the Prime Minister on Thursday to push for the job retention scheme to continue beyond its current September expiry date.

Now Cabinet Office minister Michael Gove has indicated it could be continued.

Asked about the possibility of this, he said: “We are open minded, yes.”

Speaking ahead of the Four-Nations Summit on tackling Covid, Mr Gove said the initiative, which sees the taxpayer pay cash towards workers’ wages, had been a “huge success” that was only possible “thanks to the broad shoulders of the U.K. Treasury”.

The U.K. Government minister insisted higher spending as a response to the coronavirus pandemic would continue, as the country as a whole seeks to “build back better”.

The Scottish Government has voiced concerns about a possible return to austerity from the Conservatives at Westminster, but Mr Gove told BBC Radio Scotland’s Good Morning Scotland programme: “We’ll be spending more.

“We’ll be spending more on the NHS, we will be spending more on education, we will be spending more on criminal justice, because in all of these areas it is absolutely vital that we build back better.

“Extra funding for everyone will continue, and it is important we all learn from each other about how that money should be spent.”

Last week, hospitality industry bosses called on the Government to do the opposite, to end the furlough scheme, arguing that people on furlough would rather stay at home than work. The Sun highlighted that there are currently 188,000 job vacancies in hospitality where more than 250,000 workers remain on furlough.

The Evening Standard report is worth reading in full.

Pub Landlords Urge Government to End Furlough Because It Is Destroying Work Ethic

Landlords and restaurant owners have called on the Government to end the furlough scheme to help offset a recruitment crisis, saying that those on furlough would rather stay at home than come out and work. There are 188,000 job vacancies in hospitality where more than 250,000 workers remain on furlough. The Sun on Sunday has the story.

[Some owners] are so short-staffed, some have been offering £1,000 joining-up bonuses to coax back uncertain workers. 

They blame the £63 billion Government pay scheme, as would-be recruits prefer to stay home and take state cash.

The Sun on Sunday can reveal U.K.-wide there are 700,000 job vacancies, including 188,000 in hospitality alone where more than 250,000 remain on furlough.

The scheme does not stop until the end of September, amid uncertainty over the economy. 

But experts fear some have now lost the will to work. Professor Len Shackleton, from the Institute of Economic Affairs, said: “Furlough has been a great success but has gone on for far too long.

“We should wind it up and get back to reality. We should not be holding back new businesses which need workers in a vain attempt to keep old businesses alive.”

Furlough began in March last year to stop firms laying off staff, or collapsing, during lockdown. 

Some  11.5 million workers have been furloughed, with 4.2 million still on the handout at the end of March this year. It has helped keep unemployment at around five%.

A Treasury spokesman said: “Furlough means two million fewer people will have lost their jobs.  

“We went long with furlough to avoid a cliff edge and ensure as many jobs as possible are protected.”

But it is down to employers to stop the payouts, by ceasing to apply for the state to pay 80% of a worker’s wages. 

Meanwhile, trade body U.K. Hospitality says 15% of its workers, or around 270,000, are reluctant to come off furlough, over fears of another lockdown.

U.K. Hospitality’s Chief Executive Kate Nicholls said: “Furlough is still essential, helping to make sure jobs are protected over the summer.

“But it could be tightened up to ensure it is not masking problems in our economy and protecting jobs that are no longer there.

“Lots of people are trying to recruit and in some parts of the country there are vacancies that they cannot fill.” 

Worth reading in full.

Estimated Cost of Government Spending on Covid Rises to £372 Billion

The Government is expected to spend £372 billion in its response to Covid, according to the National Audit Office (NAO), with the estimated cost having risen by £100 billion since January. Almost half of this total will be given to furlough and to other business support schemes. The MailOnline has the story.

The NAO Covid cost tracker now captures a full year of predicted costs since the pandemic began, with £172 billion already spent.

It includes £26 billion worth of guaranteed loans which are expected to be written off.

Support for businesses such as the Coronavirus Job Retention Scheme and the Bounce Back Loan Scheme had the highest estimated cost, at £151 billion.

This was followed by help for the health and social care sector at £97 billion.

Programmes such as the Self Employment Support Scheme, under help for individuals, came to £55 billion.

And there was an additional £65 billion estimated to be spent on support for other public services and emergency responses.

Chairwoman of the Public Accounts Committee Meg Hillier said it showed how public accountability “has never been more important”.

“The NAO’s cost-tracker tool is vital as the primary public data source on Covid spending across Government,” she said.

“With such huge sums going out the door, and Government guaranteeing loans worth over £90 billion, Government faces a long road to recovery ahead.”

The figures were released as question marks remained over whether the public would be freed from working-from-home guidance in June.

Hopes are high that under Step Four of Boris Johnson’s roadmap out of lockdown staff will be encouraged to return to city centers to provide a much-needed boost for local service businesses.

But the new Indian variant that is prevalent in some Northern towns is giving scientists pause over whether the lockdown lifting should be slowed down.

Worth reading in full.

Stop Press: According to a Sky News report, more people were furloughed at the height of the pandemic than were working from home (WFH), despite the number of people WFH more than doubling in 2020.

It is clear that so-called hybrid working is now on the up – mixing WFH and time in the office – allowing staff greater flexibility on how they manage their time, in many cases, and further savings from commuting every day.

But Sarah Loates, Founder of Loates HR Consultancy, warned that the trend was not always in the best interests of employees.

She said…: “While finance directors are rubbing their hands with glee at the cost savings from dispensing with expensive serviced offices, hybrid working comes at a price, both social and economic.”

Furlough Scheme Pays Out Millions to Foreign States and Tax Exiles

Firms owned by some of the wealthiest people in the world have benefitted from the Government’s furlough scheme over the past year, new analysis has found. Three million pounds was claimed by the Qatari owners of Harrods and the Ritz in December alone. The Guardian has the story.

Billionaire tax exiles, the British National party, Saudi royals and oil-rich Gulf states have claimed millions of pounds in taxpayer-funded furlough money, the Guardian can disclose.

The revelations, based on analysis of Government information, have sparked dismay among MPs at the use of a scheme designed to support struggling businesses and prevent mass unemployment, with one complaining of public money being scattered “like confetti”. …

The Government first published information about claimants last month, when it released data on the 750,000 businesses using the scheme in December 2020. Since then, details of some claimants have emerged, including Tony and Cherie Blair, and golf courses owned by Donald Trump.

But many of the beneficiaries have remained hidden until now, often due to complex company ownership structures. The Guardian cross-referenced Government data with Companies House filings that reveal who owns a controlling stake in UK businesses.

The analysis shows firms owned by some of the world’s wealthiest people and entities benefited from the scheme. The figures below are just a snapshot of one month. Some companies will have claimed more since the furlough scheme, under which the Government covers 80% of an employee’s wages, began in March last year.

The Guardian’s list of beneficiaries of the coronavirus job retention scheme include (but is not exclusive to) Qataris behind Harrods and the Ritz hotel, the ruler of Dubai, tax exiles and the British National party.

Harrods, owned by Qatar’s sovereign wealth fund and the Ritz hotel, owned by the ruler of Qatar’s brother-in-law, claimed up to £3 million between them in December.

Four Saudi royals received up to £55,000 for four companies, one of which manages the 2,000-acre Glympton Park estate in Oxfordshire, owned until this year by Bandar bin Sultan, former Saudi ambassador to the US.

The Government of Dubai, and its ruler Mohammed bin Rashid al-Maktoum, have also claimed for companies including a “six-star” 24-hour concierge service for VIPs.

And the list goes on. Claims made in January are also expected to have been published by April.

Worth reading in full.