Economy opening

Budget 2021 Speculation: rebooting the economy and protecting jobs

The economic outlook for 2021 is highly uncertain. Having started the new year with a renewed lockdown and an economy that shrank 9.9% in 2020, a stronger than expected vaccine roll-out offers hope for a recovery in the months ahead. The upcoming Budget on 3 March will be critical in terms of shaping the strength and nature of that recovery from this Covid-induced crisis.

The Chancellor has been under pressure to address two main issues: he has immediate decisions to make over many aspects of the emergency support packages that are due to expire soon, as well as a need to start looking at how to pay for the £394bn the UK is estimated to have borrowed in the past year.

Sunak warned that the Government could not ‘borrow our way out of any hole’. Speaking in the Commons after the third lockdown was announced, he warned that the public finances were ‘badly damaged and will need repair’. While the Chancellor has said that he wants to ‘balance the books’, the Government has also highlighted the ‘end to austerity’ for public spending. This suggests sizeable net tax rises will, at some point, be needed.

Many economists have warned the biggest risk to the economy in 2021 was that an ‘over-thrifty’ Chancellor would damage the recovery by tightening fiscal policy too early. According to analysis by the Institute for Fiscal Studies (IFS) and Citi Research, next month’s Budget should focus on securing the economic recovery from the Covid-19 pandemic, rather than trying to fix public finances. Similarly, former Chancellor Lord Darling has warned Rishi Sunak against ‘choking off’ the Covid recovery with higher taxes.

However, HM Treasury has announced it will publish a range of tax consultations three weeks after the Budget, a move some have suggested will allow the Government to announce a ‘good news’ agenda focusing on economic recovery while delaying decisions on potential tax rises until later in the year. Moreover, because of the slow path to reopening the economy announced on 22 February, it has been reported that the Chancellor has been forced to delay decisions on tax increases until he delivers a financial statement in the autumn.

It seems that Treasury officials are examining plans for major stimulus to the economy and are shelving plans for tax rises. Sources now say the Budget is likely to echo Sunak’s autumn ‘plan for jobs’ and be dominated by measures to protect jobs and shore up support for shuttered sectors.

Outside of fixing public finances, as already mentioned, the Chancellor has decisions to take on the support measures introduced in response to the pandemic, which are set to expire shortly. Many, including Paul Johnson at the IFS, have argued that these support measures should be extended for as long as restrictions are in place and phased out gradually as restrictions are phased out rather than coming to an abrupt halt. Budget decisions that need to be made include:

  • £20 per week boost to Universal Credit. While there is a case for maintaining the uplift and extending it to legacy benefits, if it is not to be made permanent it should be at least phased out over several months. Members of the Work and Pensions Committee argued that the Chancellor must maintain for another year ‘at the very least’ the £20 uplift. According to The Times, Boris Johnson is expected to support Sunak by backing plans to only extend the £20 increase in Universal Credit for six months, rather than a year.
  • Job Retention Scheme and Self-Employment Income Support Scheme. Britain’s most influential business groups and the trade union movement warned the Chancellor of mass unemployment unless he extends the schemes. Unemployment could reach 5% or 2.5m people by the end of the year if the job schemes end in April. IFS warned that the schemes should not be extended much beyond the point at which most restrictions are eased, otherwise it will actually choke off recovery. A much more tightly targeted version may be needed where activity is more restricted for longer: perhaps the aviation and airport industry for example.

    The Daily Telegraph reports that self-employed workers may be offered a new wave of grants of up to £7,500 through the Self-Employment Income Support Scheme, before the scheme ends in May. Labour and members of the Treasury Committee have also urged the Chancellor to open his support scheme for the self-employed; to the 200,000 people who only have a 2019/20 tax return.

  • Business rate holiday and VAT deferrals and cuts. An extension to the Chancellor’s business rates holiday and VAT reduction would create tax cuts of £9.4bn and £3.5bn respectively in 2021-22, a total of £12.9bn. According to the TaxPayer’s Alliance this could be key to reviving the economy, boosting the hospitality sector and saving summer holidays. On a similar note, IPPR published new analysis which concludes that more than half a million UK employers are at risk of collapse in the spring without the extension of business support, as cash reserves fall ‘perilously low’. According to The Daily Telegraph, the Chancellor is reportedly set to announce further VAT and business rate cuts.

Alongside the existing measures, the Labour party suggested converting the Bounce Back Loans scheme into a ‘student-loan style’ arrangement, so that businesses only have to start repayments when they are making money. Labour also called for the establishment of a British Business Recovery Agency that would manage the Coronavirus Business Interruption Loans Scheme and Coronavirus Large Business Interruption Loan Scheme in order to create terms that secure the future of businesses, including employee ownership, preference shares and subordinated debt.

Labour also proposed the introduction of Covid recovery bonds which could raise billions of pounds for the National Infrastructure Bank and would give financial security to millions, many of whom have saved for the first time. Keir Starmer also explained how he would directly help to create 100,000 small businesses across the country over the next five years by boosting funding for start-up loans. Shadow Chancellor Anneliese Dodds also demanded U-turns on the council tax hike being forced on councils and the public sector pay freeze.

The Resolution Foundation said that Chancellor Rishi Sunak should combine a £30bn extension of emergency COVID-19 support with £70bn in additional stimulus. This should include a £9bn voucher scheme focused on supporting Britain’s high streets and retailers.

The Daily Mail suggested that Treasury officials are examining plans for major stimulus to the economy. This could include vouchers for high street shoppers and lower alcohol duty for restaurants and pubs, and perhaps a return of last summer’s Eat Out to Help Out.

Vuelio Political clients will receive the Budget Summary on 3 March. 

Weekly Economy Summary

COVID-19: Weekly Economy Summary – 25 February

The Economy Summary is part of our Weekly COVID-19 Bulletin, sent every Thursday. You can sign up to receive your copy here.

The rate of unemployment in the UK rose to 5.1% in the three months to December, official figures showed this week. The Office for National Statistics (ONS) said 1.74m people were unemployed in the October to December period, up 454,000 from the same quarter in 2019. The figures show 726,000 fewer people are currently in payrolled employment than before the start of the pandemic, almost three-fifths of this fall, 425,000, has come from those aged under-25.

A report from the National Institute of Economic and Social Research has shown an explosion in the number of people ‘living in destitution’, putting pressure on Chancellor Rishi Sunak not to abandon support schemes in next month’s budget.

The report has shown the total has risen from 197,400 to 421,500 households in 2020, suggesting the crisis would worsen if the Chancellor ends the furlough scheme or cuts Universal Credit. It also showed stark regional disparities and warned the official unemployment statistics are failing to reflect reality.

‘As a result of lockdowns, levels of destitution seem to be rising across the country,’ Professor Jagjit Chadha, the NIESR’s director commented. He added: ‘The kind of unemployment numbers we’ve currently got seem to be underreporting the true level of unemployment. Given the level of activity we’ve had in the economy – the extent to which it’s fallen – unemployment could rise to at least 8% or 9%, or even further.’

Looking ahead to the Budget on 3 March, Keir Starmer has called for the introduction of Covid recovery bonds, which could raise billions of pounds for the National Infrastructure Bank and would give financial security to millions, many of whom have saved for the first time. Keir Starmer also explained how he would directly help to create 100,000 small businesses across the country over the next five years by boosting funding for start-up loans.

During the Labour party’s first opposition day debate this week, Shadow Chancellor Anneliese Dodds demanded U-turns on the planned cut to Universal Credit, the council tax hike being forced on councils and the public sector pay freeze.

During the second opposition day debate, Labour’s Shadow Chief Secretary to the Treasury Bridget Phillipson, called on the Government to support businesses and individuals still struggling as a result of the coronavirus crisis in the forthcoming budget by:

  • Extending business rates relief for at least another six months
  • Extending the temporary 5% reduced rate of VAT for three months after restrictions are lifted or for another six months, whichever is later
  • Helping British businesses struggling under the burden of Government-guaranteed debt by ensuring that small businesses can defer paying loans back until they are growing again
  • Extending and reforming the furlough scheme so that it lasts while restrictions are in place and demand is significantly reduced
  • Immediately confirming that the fourth Self-Employment Income Support Scheme grant will be set at 80% of pre-coronavirus crisis profits
  • Extending eligibility to that scheme to include anyone with a 2019-20 tax return and fixing the gaps in coronavirus support schemes to support those who have been excluded from the beginning of the crisis

The Resolution Foundation think tank published new research that calls for a £100bn Budget package to boost Britain’s economic recovery from the impact of the coronavirus pandemic. The think tank says that Chancellor Rishi Sunak should combine a £30bn extension of emergency COVID-19 support with £70bn in additional stimulus in order to kickstart the economy’s recovery, and calls for a series of measures including a retraining and job support package, extending Universal Credit, an £18bn green investment scheme, and a £9bn voucher scheme focused on supporting Britain’s high streets and retailers.

Weekly Health Summary

Covid-19: Weekly Health Summary – 25 February

The Health Summary is part of our Weekly COVID-19 Bulletin, sent every Thursday. You can sign up to receive your copy here.

The Prime Minister announced his roadmap to ease lockdown restrictions on Monday. The four-step plan would see schools reopen to all pupils on 8 March, non-essential shops, outdoor dining and beer gardens open no earlier than 12 April, and indoor mixing, drinking and dining, hotel visits and limited crowds at sporting events to return from 17 May at the earliest. If all goes to plan, all the final restrictions, including on nightclubs and mass-attendance events like football matches could be lifted from 21 June.

The Prime Minister said that these ‘cautious’ easements plans would be based on ‘data not dates’ with assessments of the easing of restrictions based on four areas:

  1. Vaccine deployment
  2. Evidence showing that vaccines are effective in reducing hospitalisations and death
  3. Infection rates and hospital capacity
  4. New variants of concern.

He told the House of Commons: ‘The end really is in sight and a wretched year will give way to a spring and a summer that will be very different and incomparably better than the picture we see around us today.’

Leader of the opposition Kier Starmer said that this current lockdown has to be the last, highlighting that this is the third time the country has come out of a national lockdown. He said that the success of the vaccine rollout will be essential, while track, trace and isolate must also be working effectively. He proposed a £500 payment for workers so that they can isolate if necessary, as well as better protection for school children and teachers.

NHS Providers welcomed the cautious approach to releasing restrictions. Chief executive Chris Hopson said: ‘While the cautious approach outlined in today’s Roadmap won’t be fast enough for some, history has sadly taught us that rushing headfirst into lifting lockdown leads only to rapid reimposition, tragic loss of life and avoidable patient harm.’

Hopson also called for continued momentum behind the vaccination programme and an effective strategy to rapidly identify and control future outbreaks from variant strains. NHS Confederation’s chief executive Danny Mortimer echoed this point, arguing that there needs to be more clarity on the four tests laid out by the Government and effective public messaging, warning, ‘we can cannot afford a fourth national wave of COVID-19, which would risk even greater damage to a fragile and tired health service’.

The Health Foundation said that easing of lockdown should be used as an opportunity to Build Back Better: ‘As we see the light at the end of the tunnel, the Government needs to ensure that no one is left behind, particularly the most vulnerable. Longer term there must now be a major Government focus on eradicating the deep-seated health inequalities that the pandemic has exposed.’

In other news, the Health and Social Care Secretary came under fire this week for claiming that the NHS did not run out of Personal Protective Equipment (PPE) during the peak of the pandemic last year. This comes after a judge last week found that the Health Secretary had breached his legal obligation to publish details within 30 days of PPE contracts being signed. Hancock has since claimed that details were published late because his Whitehall staff were focused on ensuring that there was no national shortage of PPE.

Speaking in the House of Commons Shadow Health Secretary highlighted that there were instance off PPE shortages, he said: ‘The National Audit Office reported on it, we saw nurses resorting to bin bags and curtains for makeshift PPE, hundreds of NHS staff died.’ He called for greater scrutiny of the PPE contracts and any money to be recovered on contracts which produced unusable PPE.

It was announced that people with severe learning disabilities would be given greater priority in the Vaccines Delivery Plan. The Joint Committee on Vaccination and Immunisation (JCVI) confirmed that all those on the GP learning disability register would be invited to receive a vaccine as part of cohort 6. This is because of their perceived risk to Covid-19, due to issues including that individuals in the group are more likely to have underlying health issues and that some people with learning disabilities are more exposed to Covid-19 if they live in residential care.

Responding to the decision, Disability Right’s UK said: ‘People with learning disabilities are six times more likely to die from coronavirus than people without learning disabilities. It is hugely welcome news that everyone with learning disabilities can now be urgently protected by vaccination.’ The Learning Disability charity Mencap also welcomed the ‘fantastic news’.

Covid-19 vaccine with syringe

Budget 2021 Speculation: supporting the vaccine rollout and boosting the health and social care sector

The Spring Budget will likely set out what the Autumn Spending Review of last year attempted to achieve: support the health sector in its immediate efforts to reduce the spread of Covid-19 transmission and then help the wider sector recover from the battering of the pandemic.

Another coronavirus wave later, the Budget needs to support the continued roll out of the Covid-19 vaccine and NHS Test and Trace. As it is hoped that the current lockdown is the last, the Budget should lay forward plans to drive improvement across health and social care following on from the pandemic. This imperative given the wide impacts Covid-19 has had on NHS health services and social care.

Measures to prevent the spread of the pandemic have proven costly during the past year. The controversial NHS Test and Trace scheme has seen its budget for 2020-21 grow over time, now standing at £22bn. Despite initial concerns that the system was only having a ‘marginal impact’ in reducing Covid-19 transmission, figures in recent months are more promising. More than three million people were tested during a single week in February and NHS Test and Trace successfully reached 87% of those who received a positive test result, and 93.5% of their contacts.

However, even with this progress, the scheme is far from perfect. Giving evidence to the Science and Technology Committee in early February, Dido Harding, Chair of NHS Test and Trace, said an estimated 20,000 people a day who are asked to isolate were not doing so fully.

With testing and contact tracing expected to be used for the country to come out of lockdown during spring, it seems likely that political focus will once again switch to NHS Test and Trace, with long term commitment to the scheme essential to keep the country out of lockdown.

The roll out of the Covid-19 vaccine will need continued momentum from the Treasury. The Government has already invested over £300m into manufacturing a successful vaccine. This includes securing 100m doses of the Oxford/AstraZenca vaccine and 40m doses of Pfizer/BioNTech vaccine, which are both currently in deployment. However, the emergence of Covid-19 variants across the world could hinder the effectiveness of these vaccines, and new vaccines may need to be developed and deployed in the future.

The Health Secretary suggested earlier this month that new treatments and vaccines would play an important role in turning Covid-19 from a pandemic into another illness that we have to live with, like we do with flu.

Aside from the pandemic response, the upcoming budget must support the wider health sector. With many non-Covid treatments cancelled and delayed over the past few months, the think tank Reform has suggested that 10m patients could be on an NHS waitlist by April 2021.

Large amounts of funding have already been earmarked for NHS services, including a £3bn NHS recovery package announced in the Spending Review last autumn. £1bn of this was allocated to support the NHS in tackling the elective care backlog and support hospitals to cut long waits for treatment by carrying out extra checks, scans and additional operations or procedures.

It is likely that this support will have to be expanded in the upcoming Budget to account for the pressures faced by the health sector in recent months, which saw hospitals severely stretched by unprecedented levels of Covid-19 hospital admissions, almost double the number seen during the first wave in spring 2020.

Cancer Research recently argued the sustained disruption of the pandemic has ‘left a deep rift in cancer care’, with 40,000 fewer people starting cancer treatment across the UK last year. Meanwhile, the British Heart Foundation (BHF) has highlighted that tens of thousands of potentially life-saving operations have been cancelled or delayed during the pandemic. BHF has called for the Chancellor to announce an additional £10bn investment this year to deliver the aims of the NHS Long Term Plan as well as invest in public health programmes.

NHS Providers has appealed for support to tackle the growing and long-term pressures arising from Covid-19, as well as funding to drive forward improvements in patient outcomes, quality and efficiency. Additionally, it has called for the Government to recognise the contribution to the pandemic response from NHS staff over the past year, with a pay rises and a workforce plan.

Social care cannot be forgotten in the upcoming Budget. When the Government published its White Paper on NHS reform earlier this month, it promised to publish separate proposals for social care later this year. It would be encouraging if the Budget could set out some of this essential long-term investment for the sector.

NHS Providers said that this is vital considering the impact the Covid-19 pandemic has had on social care. The Association of Directors of Adults Social Services also recently called for wide reform across social care including a commitment to long- term funding.

Vuelio Political clients will receive the Budget Summary on 3 March. 

DCMS budget

Budget 2021 Speculation: supporting digital growth while saving culture and sport

The effects of Covid have created extensive issues that have decimated the creative sector and it now needs to be supported by the upcoming Budget. However, Covid has also scaled digitalisation across the UK and may prompt Chancellor Rishi Sunak to drive more funding towards the roll out of digital connectivity.

The creative sector is predominantly made up of freelance artists who have been badly affected because of lockdown measures. Many freelancers have been unable to find work due to cancellations of events, with some forced to retrain to find employment.

There have also been stark criticisms directed towards the Government as the Self Employment Income Support Scheme (SEISS) did not cover those with jobs that involve moving from freelance contract to freelance contract on a short-term basis. This includes many people who work in creative industries, such as musicians. The Treasury Committee’s third report on the economic impact of coronavirus: ‘Gaps in Support and Economic Analysis’ stated that ‘ONS data indicates that 3% of all self-employed in the UK have become self-employed since April 2019, which, roughly estimated, suggests that around 150,000 newly self-employed are unlikely to be eligible for support under the SEISS.’

It is therefore essential that the upcoming spring Budget tackles this issue and in the words of Mel Stride MP: ‘the Chancellor must not forget those who have fallen through the gaps around previous support packages and must provide the necessary workforce support measures and economic plan for the self-employed.’

Another issue within the creative sector has been the complete cancellation of festivals and gigs. The flagship economic study by UK Music by Numbers revealed that before COVID-19, the UK music industry contributed £5.8bn to the UK economy, with live music making up £1.3bn of this and contributing to the employment of 34,000 people. As all these events were cancelled last year, this left a huge financial gap in takings for the industry, and prospects for events to go ahead this year look increasingly unlikely.

In a recent DCMS Committee evidence session, which focused on the future of UK music festivals, witness Sacha Lord, co-founder of Parklife and The Warehouse Project, spoke about necessary Government intervention that is needed for events to restart and go ahead this year, including the need for a Government-backed Coronavirus cancellation insurance scheme, an extension to the VAT rate reduction on tickets carrying on at 5% for the next three years, extension on business rate reliefs, and a ‘more nuanced, specified furlough scheme for specific industries, for festivals’ until events are fully running with 100% capacity.

These are all measures that could be introduced in some capacity in the upcoming Budget.

Committee chair Julian Knight has also called for the Government to address these issues, where he has emphasised the need to introduce a Government-backed Coronavirus cancellation insurance scheme, saying: ‘Insurance must be the first step in unlocking the huge contribution that festivals make to our economy, protecting not only the supply chains, but the musicians who rely on them for work’, and that ‘the industry says that without Government-backed insurance, many festivals and live music events just won’t happen because organisers can’t risk getting their fingers burnt for a second year.’

The upcoming spring budget provides the Government with the perfect opportunity to introduce this much needed measure.

Both of these issues have been highlighted by the Creative Industries Federation, which has set priorities it expects from the upcoming spring budget that include: extending the Self-Employed Income Support Scheme for as long as restrictions on work remain, urgently plugging the gaps in support for freelancers, extending the Job Retention Scheme, temporary business loans, grants and rate reliefs across all UK nations for as long as restrictions remain, introducing a Government-backed insurance scheme for live events, extending the VAT rate reduction on tickets beyond March 2021 and repurposing the Tradeshow Access Programme to support virtual, not just physical, events.

It also expects the Budget to reevaluate and boost funding towards digital connectivity, especially as COVID-19 emphasised the need to boost digital connectivity. The pandemic has forced the workforce towards remote working and has digitalised many aspects of society.

Focusing on digital connectivity, it is widely expected that the upcoming budget will replace the current Rural Gigabit Connectivity Programme (RGC), which is due to end by 31 March 2021, with a new progamme and fresh funding.

The RGC was launched in 2019 and focused on helping properties in rural locations to access faster broadband. A main part of this was a voucher scheme that, as defined by Building Digital UK, allowed ‘community and small to medium sized businesses to aggregate vouchers together in group schemes to fund the cost of gigabit-capable broadband to their community.’

DCMS has reported that an independent review revealed that ‘The £2.6bn Government scheme to roll out superfast broadband to ‘commercially unviable’ parts of the UK sparked a surge in home values of up to £3,500, according to a new report, and more than 96% of homes and businesses can now access superfast broadband.’

It is expected that a successor programme will be introduced to continue progess on the Government’s £5bn UK Gigabit Broadband Programme, which aims to provide ‘gigabit-capable’ network coverage to a minimum of 85% of society by the end of 2025. DCMS also recently published the Planning for Gigabit Delivery in 2021 report, in which it stated that ‘following the success of the Gigabit Broadband Voucher Scheme, we’re keen that we continue voucher-supported delivery during 2021’, and ‘the voucher team will continue to work with suppliers and communities to transition smoothly from the current to the new voucher.’ The question remains of how much funding will be made available for the new voucher, expected to be announced in next week’s budget.

The closures of gyms and leisure centers because of COVID-19 has become a worrying issue that also needs to be addressed. This issue has been highlighted by Rebecca Passmore, the managing director of PureGym, at a DCMS committee oral evidence session. She said: ‘Gyms have had no income for 34 of the last 54 weeks, we have had no revenue coming in. We haven’t been able to do click-and-collect or takeaways. It’s clearly taking its toll on operators. Balance sheets are being pushed to their limits.’

The Guardian reports the measures representatives from gyms and leisure centers are seeking from the Government to help them recover and survive from the effects of coronavirus. The Budget could include these measures, which ask the Government to apply ‘the same VAT rules to the physical active sector as it does the hospitality industry, which has had to pay the Government only 5% of the 20% VAT it has collected in lockdown’, and calls for the Government to ‘extend the rent holiday and to also legislate so that the burden of rent was shared between landlord and tenants during the lockdown.’

The BBC has also reported that ‘A coalition of athletes, celebrities and health bodies have written to the prime minister asking for the “fullest possible support” to help sports and exercise facilities survive the pandemic.’ Overall, there is a clear need and expectation that the upcoming budget will outline plans and funding towards the survival and recovery of gym and leisure centers.

It is clear that digital, cultural and sport sectors are among the most adversely affected by COVID-19 and the upcoming budget is expected to outline plans to resolve these issues, and support Covid recovery and job protection. At the same time, the acceleration of digitalsation within the UK because of COVID-19 could see accelerated measures introduced to boost digital connectivity.

Vuelio Political clients will receive the Budget Summary on 3 March. 

Budget 2021 education predictions

Budget 2021 Speculation: the education and skills crisis

According to the Institute for Government, the upcoming Budget will focus on the Treasury’s ‘Plan for Growth’, although growth may be a little hard to envisage while the UK remains in lockdown and unemployment rises. However, it safe to assume, even in ‘the new normal’, that much of the Budget this year will focus on protecting jobs and promoting skills.

According to IPPR, half a million employers are at risk of bankruptcy once job support schemes close, together employing approximately nine million people. Labour is joined by a plethora of voices calling for Chancellor Rishi Sunak to announce an extension to the furlough scheme, due to end in April, to prevent more large-scale job losses.

Despite emerging data on the positive impact of the UK’s vaccine roll-out on transmission and severity of illness,  2021 will undoubtedly pose another challenging year for the labour market. It is therefore essential that Sunak sets out how crisis support will meet the winding down of restrictions.  Another furlough extension does seem quite likely, given that the last extension was granted before the current lockdown was announced.

The Government already set out a plan for jobs last summer, with a number of schemes to incentivise businesses to take on apprentices or to support individuals to upskill in order to find work, so one could assume these bases have already been covered. However, the Lifetime Skills Guarantee won’t come in until April this year, with the further education sector already voicing concerns about the probability of its success. These worries join concerns about the uptake of incentives like Kickstart, despite the Education and Skills Funding Agency recently sharing how employers are benefitting from the scheme.

At a time when young people are struggling the most to gain and maintain paid work, it is essential that job support is offered where it is needed, and that schemes for job creation are changed quickly if found to be ineffective. Such changes have been suggested by the Institute of Fiscal Studies, who support an extension to the Kickstart Scheme beyond 2021. A strong focus on jobs is therefore essential if the Government is to deliver on the mantra of ‘building back better’ from the pandemic.

One way to do this is to keep the commitment to raising the minimum wage in April, which would go some way to addressing the low pay of keyworkers we have all relied on over the course of the last year. However, as the Learning and Work Institute argues, this must be part of a broader package of ‘good work’ practices to reduce job poverty and improve standards in the UK.

Another obvious and immediate need is for a well-resourced catch-up programme for children who have now been learning from home on and off for a year, with a devastating impact on education across the board. Anyone who regularly listens to Prime Minister’s Questions will have heard Prime Minister Boris Johnson say that remedying the damage to children’s education is a focus for the Government.

Large amounts of funding have already been allocated for tutoring, catch-up and digital access, although there is further discussion on how best to implement catch up. This funding has recently been supplemented with a further £300m, in light of the delay to reopening schools. However, there are reports that even this amount will not cover the damage, and that schools per pupil funding has fallen in real terms this year to below what it was in 2010-11 due to the pandemic. Despite this, it seems unlikely that more catch-up support will be offered in this years’ Budget although it would be welcome.

Yet to be addressed (depending on who you ask) is the need for an equivalent catch up programme for the early years sector, requested by The Sutton Trust last year. Crucial to educational attainment and even job prospects later down the line, lost access to high quality early education either through choice or forced closure is already having an impact on school readiness. But as Fleur Anderson MP recently pointed out in a session of the Education Select Committee, with ministers Nick Gibb and Vicky Ford, there has been no catch-up programme for the early years. Ford, the Minister for Children and Families, said this was due to providers staying open in lockdown while schools had to close. This has not stopped Labour’s Shadow Minister for Children and Early Years Tulip Siddiq asking the Secretary of State for Education Gavin Williamson what discussion on a long-term funding settlement for maintained nursery schools he has had with the Chancellor.

The Budget this year is likely to feature heavily on job support and creation, as the job market continues to be impacted by restrictions caused by the pandemic. Although it is clear the Government will have to prioritise certain areas of support after an incredibly difficult year, the consequences of inadequate funding for education and the early years sector has the potential to push another crisis further down the line.

Vuelio Political clients will receive the Budget Summary on 3 March. 

Green recovery budget 2021

Budget 2021 Speculation: How might Rishi Sunak deliver a green recovery?

Much has changed since Chancellor Rishi Sunak delivered his last Budget almost a year ago, but one thing which hasn’t is the need to tackle climate change and to protect the environment, both in the UK and internationally.

When the Treasury announced that 2021’s Budget would be on 3 March, it said that it would ‘set out the next phase of the plan to tackle the virus and protect jobs’. As the widespread calls, both from within the Government and from a wide variety of interested parties, to ‘build back better’ and deliver a ‘green recovery’ show, these two aims can be delivered in parallel.

So far, the Government has released some of the building blocks to inform and help deliver these aims. We’ve had the Ten Point Plan for a Green Industrial Revolution, the National Infrastructure Strategy, the Energy White Paper, the interim report of the Treasury’s Net Zero Review and the Dasguta Review on the Economics of Biodiversity. More strategies are promised, digging into some of the toughest areas of decarbonisation: heating, transport, energy-intensive industries. With the UK hosting COP26, the UN’s climate change conference, this year, the Government will want to show that it is leading by example.

But to deliver on these strategies, the Chancellor will need to pull some of the levers at his disposal. To look at it in the most simplistic way, the Government has two ways of doing this: spending and tax. Sunak could announce investment in technologies and projects to deliver a ‘green recovery’ or changes in taxes to incentivise others to do so, such as new reliefs. Equally, he could announce increases or adjustments to taxes to penalise those responsible for emissions and environmental damage, embracing the ‘polluter pays’ principle.

One tax which could rise is fuel duty. The Daily Telegraph recently reported that Conservative backbenchers believed that an increase is ‘inevitable’. A ‘Northern Tory’ told the paper that ‘the Government can wrap itself up in the green cloak of COP26 and the British public might not love it, but they will stomach it’. However, ending the decade-long freeze would not be without political problems. The Sun, which strongly backed the freeze, has already mobilised against the change, enlisting backbenchers Robert Halfon, who said ‘a fuel duty increase would level down – far from building back better and would damage the foundations of economic recovery’, and Craig Mackinlay, who claimed it would be ‘bad for the economy, bad for business and bad for jobs’.

The Times has reported that the Government has been considering options for new carbon taxes, with departments ordered to set ‘prices’ for emissions from all parts of the economy as part of a plan to ‘implement some form of carbon pricing’ in the next decade. This would form part of a strategy to ‘deliver a carbon price for the whole economy’ ahead of COP26. However, this plan has been blocked by Boris Johnson according to the Daily Mail.

BDO suggests that further changes to taxes linked to climate and the environment could be announced, such as capital allowances ‘that support the Government’s carbon reduction agenda’, new taxes on more single-use items such as coffee cups, or higher VAT rates for ‘environmentally damaging goods and services’.

If the Government is minded to go down this route, it would do well to examine the findings of a recent National Audit Office report that concluded the Treasury and HMRC ‘tend to focus more on the revenue that environmental taxes raise rather than the environmental impact they achieve’ and ‘do little’ to identify measures ‘which impact on Government’s wider environmental objectives but which are not recognised as environmental in nature’. If the Government wants to use the tax system to incentivise environmentally beneficial behaviour and penalise irresponsible activity, it needs to be sure that it’s doing so in an effective way.

Of course, another way in which the Government can act is for Rishi Sunak to produce the national chequebook. As the Institute for Fiscal Studies notes, ‘we need a plan for measures that increase the productive capacity of the economy and help steer and ease the transition to a new normal’ which should include ‘investments in physical and digital infrastructure, training, and science’ to help ‘achieve goals such as reaching Net Zero by 2050’.

The use of Government investment to deliver this green recovery is being advocated by business and unions. The TUC is continuing to push its plan to create 1.24m jobs in green infrastructure by bringing forward at least £85bn of infrastructure investment. This would see investment across a range of industries, including energy, land, buildings, transport, waste, manufacturing and digital, delivering a range of positive outcomes both for the environment and the economy.

The CBI has recommended that the Government commit to deliver seven more gigafactories by 2040 (these build batteries for electric vehicles), ensure that private sector investment is crowded-in by the new National Infrastructure Bank and invest in sustainable aviation fuels, as well as introduce reliefs for businesses which invest in property and machinery energy efficiency.

The Institute for Directors has advocated the creation of a ‘new digital and green Recovery Credit incentive for SMEs’, helping to support their investment in digital and green technologies, noting that at the moment British small businesses ‘tend to lag peer nations when it comes to adopting best practice’. It also wants a ‘retraining Recovery Credit incentive for SMEs’, which would especially focus on digital and green skills.

One area to particularly watch out for will be the future of the Green Homes Grants. Launched with much fanfare by Sunak as part of his Plan for Jobs last summer, recent news has not been encouraging. The grants were advertised as being worth £2bn, allowing homeowners and landlords to apply for vouchers for energy efficiency improvements. However, 95% of the £1.5bn for householders has not been spent and, while the grants have been extended until March 2022, the funding is not being rolled over to the next financial year. Instead, £320m will be available from March – a much smaller sum.

Shadow Business, Energy and Industrial Strategy Ed Miliband said that the Government was ‘denying homeowners the energy improvements they need, denying installers the work they need and denying the country the green transition we need.’ The Government blamed the low take-up on ‘an understandable reluctance on the part of the public to welcome tradespeople into their homes.’ If Sunak does want to revisit the design or funding of the scheme, the Budget would be a good opportunity.

With so much happening in the environmental and climate policy landscape in 2021 – including another budget, the UK’s Sixth Carbon Budget – it would be a missed opportunity if the Chancellor didn’t take the Budget as an opportunity to ensure that the Government’s tax and spending decisions were in line with its ambitious climate ambitions.

Vuelio Political clients will receive the Budget Summary on 3 March. 

Weekly Health Summary

Covid-19: Weekly Health Summary – 18 February

The Health Summary is part of our Weekly COVID-19 Bulletin, sent every Thursday. You can sign up to receive your copy here.

Last weekend, the Government hit its target of offering the Covid-19 vaccine to the top four priority groups: all elderly care home residents and their carers; everyone over 70; all frontline health and social care workers; and everyone with a condition that makes them extremely vulnerable to the virus. Prime Minister Boris Johnson has called the news an ‘unprecedented national achievement,’ highlighting that 90% of over 70s took up their offer for a vaccine.

Reaching the target has meant that the vaccines delivery programme entered a new phase this week, with the roll out extended to people aged 65 to 69 and those who are clinically vulnerable against Covid-19.

NHS England and Improvement has indicated that GP led vaccination sites will focus initially on the clinically vulnerable to ensure continuity of care. NHS Confederation’s Primary Care Network Director Ruth Rankine has welcomed this approach, she said: ‘Working as part of an integrated system, primary care is best placed to offer vaccinations to clinically extremely vulnerable people. Primary care services are at the heart of communities and have already found ways to improve access through targeted public information and local engagement.’

Over the weekend, the Government published a Vaccination Uptake Plan to further enforce the roll of community- led engagement in vaccine distribution. The plan aims to make the vaccine more accessible including to ethnic minorities and those with disabilities. It has been welcomed by NHS Providers, which has noticed that vaccine uptake is lower in certain groups, including a reluctance among BAME NHS staff. Chief executive Chris Hopson said that NHS Trust leaders will welcome strengthened collaboration between the Government, charities and health organisations to build upon ‘successful local initiatives and innovations, so that disparities can be eliminated.’

A further 1.7m people are expected to be added to the shielding list and will prioritised for the Covid-19 vaccine. It follows a new model that was developed to consider extra factors including, ethnicity, deprivation and weight. Runnymede Trust called the news a ‘watershed movement, signally a recognition that class and race impacts your vulnerability to Covid-19’.

According to latest figures from the REACT-1 community surveillance study, Covid-19 infections have fallen by more than two-thirds since the start of February. Although infection levels remain high, these latest findings indicate that lockdown restrictions have had an impact on reducing infections across the country. Health Secretary Matt Hancock said: ‘These findings show encouraging signs infections are now heading in the right direction across the country, but we must not drop our guard. Cases and hospital admissions remain high – over 20,000 COVID-19 patients are in hospital – so it is vital we all remain vigilant and follow the rules as our vaccination rollout continues at pace.’

The House of Commons Science and Technology Committee held an evidence session on easing lockdown measures in England on Wednesday. Here, it was suggested by Mark Woolhouse, Professor of Infectious Disease Epidemiology at the University of Edinburgh, that the country could potentially begin to ease out of lockdown earlier than it did the first-time round because of promising data on Covid-19 transmission.

He also praised the high take up of vaccinations, highlighting that the vaccine roll out has reduced transmission. On the other hand, the Government’s deputy chief scientific adviser, Professor Angela McLean, struck a more cautious argument and said that is vital that lockdown measures are reduced in line with the rollout of vaccines.

NHS Providers said four tests must be met before lockdown restrictions can be reduced. Firstly, Covid-19 infections should be around 1,000 a day; NHS capacity must be high enough to treat all patients; the vaccination campaign should be sufficiently advanced and, finally, an effective strategy should be in place to rapidly identify and control future outbreaks.

Weekly Economy Summary

COVID-19: Weekly Economy Summary – 18 February

The Economy Summary is part of our Weekly COVID-19 Bulletin, sent every Thursday. You can sign up to receive your copy here.

Data from the Office for National Statistics shows that the UK economy shrunk by a record amount (9.9%) last year, more than twice the previous largest annual fall. However, it grew by 1.2% in December when some restrictions were eased, making it likely that the UK can avoid a double-dip recession.

As stringent Covid-19 restrictions are expected to remain elevated until early spring, along with the effects of post-Brexit adjustment, the NIESR’s forecast is for GDP growth to decline by 3.8% in the first quarter of 2021.

The Treasury Committee has published the third report of its inquiry into the Economic Impact of Coronavirus – ‘Gaps in Support and Economic Analysis’. Its recommendations include: Government must set out criteria for how and when it will lift lockdown restrictions with economic and epidemiological modelling to support it; HM Treasury should be more transparent with economic analysis that informs Government decisions; HM Treasury should use 2019-20 tax returns to help the newly self-employed; Eligibility for Government support should be extended to those missing out, including limited company directors and freelancers.

The IPPR think tank released a new briefing paper, in which Chancellor Rishi Sunak is urged to quadruple the Government’s planned crisis spending to £190bn in order to restore jobs, investment, and services. Failure to deliver such a boost risks condemning the UK to a ‘stagnation trap’ with about half the rate of economic recovery. It would mean lower business investment and leave unemployment at more than 10% in spring next year.

The British Chambers of Commerce published a new COVID survey that finds that 25% of respondents say they will have to make staff redundant if Government financial support ends in March and April. The BCC is calling on the Government to keep financial support going while firms reopen and rebuild, with a clear roadmap for reopening to help increase business confidence.

Similarly, a £13bn tax rescue package could be key to reviving the economy, boosting the hospitality sector and saving summer holidays, according to a report from The TaxPayer’s Alliance. The report claims an extension to the Chancellor’s business rates holiday and VAT reduction would create tax cuts of £9.4bn and £3.5bn respectively in 2021-22, a total of £12.9bn. If extended until after 2022-23 as proposed, this would generate total savings of £25.6bn for the sector over the two years.

Labour set out new plans to back British businesses, as it calls on the Government to help ease the Covid-debt burden faced by firms across the country. The party suggested converting the Bounce Back Loans (BBLs) scheme into a ‘student-loan style’ arrangement, so that businesses only have to start repayments when they are making money. Labour also called for the establishment of a British Business Recovery Agency that would manage the Coronavirus Business Interruption Loans Scheme (CBILs) and Coronavirus Large Business Interruption Loan Scheme (CLBILs) in order to create terms that secure the future of businesses, including employee ownership, preference shares and subordinated debt.

Shadow Chancellor Anneliese Dodds’s business-backing plan comes after a week in which Labour has called for business rate holidays and VAT cuts to be extended and for a smarter furlough scheme to last until necessary health restrictions are lifted.

Almost two millions workers were unemployed or fully furloughed in January and had been for at least six months, according to a report by The Resolution Foundation. The report finds that the number of people on the Government’s Job Retention Scheme (JRS) has risen to around 4.5m during the current lockdown, almost half of the peak during the first lockdown; indicating that firms have adapted to operating during the pandemic.

The report calls for the full JRS to remain in place for several months after public health restrictions have been lifted to give firms time to bring staff back, and remain in place for longer in sectors still subject to legal restrictions, such as hospitality and leisure.

Budget speculation Housing

Budget 2021 Speculation: Housing

In the run up to next month’s Budget, housing industry bodies have been leading numerous campaigns – from protecting leaseholders from cladding costs, to extending various tax cuts, to accelerating the decarbonisation of buildings.

Here are six policies that could be included in the Chancellor’s statement.

1. Stamp Duty holiday extension
Many in the housing sector are calling for the six-month Stamp Duty holiday to be extended beyond the current 31 March expiry date. Both buyers and sellers have called for an extension to the six-month tax break, introduced to support the property market during the pandemic. Experts have predicted that the end of the scheme could see house prices decrease significantly. Other than setting the end of the Stamp Duty holiday to another date, the Chancellor could choose to introduce exemptions for buyers already at a certain stage along the process, or permanently maintain the threshold for eligibility at properties over £500,000.

2. Property tax
There have been reports that Stamp Duty could be scrapped altogether, along with council tax, to be replaced with a new property value tax. This could appear in the form of a proportional property tax – a levy that homeowners would have to pay each year on the value of their property. For landlords with more than one residential property, the tax would apply for each property owned. There have been suggestions that the money raised from the levy could be split between the Treasury and the local authority.

Housing Secretary Robert Jenrick has already announced that developers seeking permission to develop certain high-rise buildings in England will have to pay a ‘Gateway 2’ developer levy. In addition to this, a new tax will be introduced for the UK residential property development sector, expected to raise at least £2bn over a decade to go towards cladding remediation costs. Details of this will be the subject of a consultation paper, which could be put forward at the Budget.

3. Domestic reverse charge
The ‘domestic reverse charge’ change means companies in the construction supply chain will no longer receive their 20% VAT payment when they submit bills. The VAT cash will instead be paid direct to HMRC by the customer receiving the service, who will reclaim it in the normal way.

Despite the changes coming into effect on 1 March, industry bodies, such as the Construction Leadership Council and the Federation of Master Builders (FMB) are hoping for a last-minute change of plan ahead of the Budget, warning that more than 150,000 construction companies will experience a 20% drop in cash flow as a result. In a letter to the Chancellor, Chairman of the Construction Leadership Council Andy Mitchell argued that the policy ‘risks reversing any recovery industry has made from Covid-19 and will limit the scope for protecting and creating jobs across the UK’. An Early Day Motion expressing concern over the Treasury’s decision to go ahead with the policy was tabled last week by SNP MP Kirsten Oswald.

4. National Retrofit Strategy
There have been numerous calls from industry bodies, including the National Housing Federation and the FMB, for a National Retrofit Strategy. Decarbonising homes and buildings is a vital step in achieving net zero emissions by 2050. In its Energy White Paper released in December, the Government said a programme for retrofitting homes to improve energy efficiency will be introduced. This could happen at the Budget.

5. Another extension to the Green Homes Grant
The Green Homes Grant has already been extended once, until March 2022, however, poor uptake of the scheme – described as complex and difficult to access – has led the Government to cut funding by £1.5bn from April. Chair of the Environmental Audit Committee Philip Dunne argued that unless the scheme is further extended, it will fail to meet its ambitions.

6. Extension to the Universal Credit uplift
Universal Credit claimants have been receiving a weekly £20 rise during the coronavirus pandemic. The Government is under increased pressure to extend the rise past 31 March, however, speaking on the Andrew Marr Show, Foreign Secretary Dominic Raab said it was a ‘temporary measure’ and that the Budget would set out support ‘in the round’.

Instead of extending the rise, there have been numerous reports in the media that the Chancellor is contemplating offering Universal Credit claimants a one-off payment of £500. However, this was rejected by Work and Pensions Secretary Thérèse Coffey.

Vuelio Political clients will receive the Budget Summary on 3 March. 


Health and care system reform

The Government laid out wide ranging reform of the health and care system yesterday. The White Paper ‘Integration and Innovation’, marks a structural shift away from the coalition Government reforms of 2012, and sets out ambitious legislative proposals for a new Health and Care Bill. 

The main aims of the proposals are to integrate healthcare systems, reduce bureaucracy and strengthen accountability in the sector. Announcing the plans, Health and Social Care Secretary Matt Hancock said: ‘Even before the pandemic, it was clear that reform was needed to update the law, to improve how the NHS operates and to reduce bureaucracy… All parts of the system told us that they want to embrace modern technology, to innovate, to join up, to share data, to serve people and, ultimately, to be trusted to get on and do all that so that they can improve patient care and save lives.’

The plans propose that Integrated Care Systems (ICS) are rolled out across the country, bringing together NHS organisations, local government and wider partners at a system level. In order to increase collaboration, bureaucracy will be reduced and there will be greater flexibility for the workforce with increased data sharing mechanisms. Aiming to improve accountability and public confidence, the Secretary of State will have greater powers of intervention, including over a newly merged NHS England and NHS Improvement organisation.

Response to the proposals is mixed; although plans to integrate the healthcare system are largely positive, there is some concern over moving power away from NHS England to central Government. Additionally, with the health system still battling an acute wave of the coronavirus pandemic, some are concerned that now is simply not the right time for reform.

Shadow Health and Social Care Secretary Johnathan Ashworth welcomed integration plans, but asked for greater clarity on how the new structures will be governed. He called the decision to give more control to the Government a ‘power grab’ and suggested that changes to competition rules would leave the door open for ‘institutionalised cronyism at the top’.

NHS Providers suggested that the proposals provide an ‘important opportunity to speed up the move to integrate health and care at a local level’, but called for greater detail on the Secretary of State’s new powers over NHS England.

NHS Confederation called the reforms ‘vital for improving patient care’ after the 2012 reforms have ‘largely failed’.

Lou Patten, CEO of NHS Clinical Commissioners and NHS Confederation ICS Lead, called the decision to establish ICSs across the country a ‘logical step’ to build on the progress seen from the past few years. He called for greater detail on how the new systems will be governed, highlighting that retaining the expertise of senior staff throughout the restructuring process is essential.

Alzheimer’s Society said that with the pandemic exposing how ‘truly broken’ the social care system is, greater integration between health and social care is a ‘good step forward’. It argued that any reforms should come in conjunction to a social care system ‘overhaul’.

The Health Foundation also welcomed the decision to increase collaboration between services, suggesting that the proposals could bring ‘real benefits’. However, it argues that with the NHS facing huge challenges due the pandemic and rising waiting lists, a reorganisation of the health system could cause ‘distraction and disruption’. Furthermore, the decision to increase Government power is ‘politically driven’, it argued that ‘the Government’s handling of Covid-19 is no advert for more ministerial intervention in the health system’.

The King’s Fund also welcomed greater collaboration across the heath and care sector. Richard Murray, Chief Executive of The King’s Fund, said: ‘These new plans could give the NHS and its partners greater flexibility to deliver joined-up care to the increasing numbers of people who rely on multiple different services.’

However, it worries that under the new proposals, the day-to-day clinical and operational independence of the NHS will be diminished, and argued that devolving greater power to NHS England was one of the ‘successes’ of past reforms.

In a similar vein, the Institute for Government’s Nicholas Timmins has said greater ministerial control ‘threatens to take the NHS back to the wrong sort of future’. He suggests it could lead a ‘constant chopping and changing of goals’ and less public pressure from within NHS England, which would ultimately be to the detriment of long term performance.

Vuelio Political clients received their copy of the white paper summary yesterday. Find out more about our political products and services.

Weekly Health Summary

Covid-19: Weekly Health Summary – 11 February

The Health Summary is part of our Weekly COVID-19 Bulletin, sent every Thursday. You can sign up to receive your copy here.

Efforts to roll out the Covid-19 vaccine have continued, with the latest figures showing that 13,058,298 have had their first dose.

Close to meeting the Government’s 15 February target of offering the vaccine to everyone 70 and over, to all frontline NHS and care staff, to older care home residents and to all those who are clinically extremely vulnerable, the Prime Minister Boris Johnson called for everyone who hasn’t had a vaccine, but is eligible, to book a appointment and take up the offer.

He also said that, if we can keep the pace and supplies of vaccines up, the Government hopes to reach everyone in cohorts one to nine, which would include all those over 50, by the end of April. He said that it is vital that the public takes up their offer of a vaccine ‘to save lives, prevent serious illness, and so the whole country can take another step on a long and hard road back to normality.’

New measures have been brought in at the border to increase the country’s security against new variants of concern arriving from abroad. As well as having to take a predeparture test, and quarantine for 10 days upon arrival, all international arrivals, will soon be required by law to take further PCR tests on day two and day eight of that quarantine.

From Monday, those arriving from ‘red list’ countries will have to stay in an assigned hotel room for 10 days from the time of arrival and carry out their quarantine there. The new measures have come with strict enforcement plans, including a £5,000 fixed penalty notice, rising to £10,000, for arrivals who fail to quarantine in a designated hotel, and for anyone who lies on a passenger locator form and tries to conceal that they’ve been in red-list country in the 10 days before arrival will face a prison sentence of up to 10 years.

Announcing the new measures, Health and Social Care Secretary said: ‘Our fight against this virus has many fronts. And just as we’re attacking this virus through our vaccination programme, which is protecting more people each day, we’re buttressing our defences through these vital measures so we can protect the progress that we’ve worked together so hard to accomplish.’

Office for National Statistics figures published this week showed that the number of deaths registered in England and Wales in the week ending 29 January was 18,448; this was 228 fewer deaths than in the previous week. The number of deaths was 44.6% above the five-year average.

Responding to the figures, Dr Layla McCay, director at the NHS Confederation, said: ‘These figures are a clear reminder of the heavy human cost of the Covid-19 crisis. This is still a very real emergency, with more than 112,000 lives tragically lost to the virus across the UK, and nearly 30,000 people in hospital with Covid-19 – more than at the height of the first peak last spring.’

Nuffield Trust said the figures show the ‘harsh reality of the second wave’, adding: ‘It is striking how long and widespread the impact of the second wave has been. In all regions, the number of deaths recorded has been above the five-year average for 12 weeks running. The lasting impact on families and carers after this long period cannot be underestimated.’

Finally, a report by the Public Accounts Committee on supply and procurement of Personal Protective Equipment (PPE) published this week argued that front line health workers were left ‘risking lives to provide treatment and care’. It said that an ‘inadequate’ pandemic plan and equipment stockpile left frontline workers having to care for people with Covid-19 or suspected Covid-19 without sufficient PPE to protect themselves from infection.

Surveys by staff representative organisations showed at least 30% of participating care workers, doctors and nurses reported having insufficient PPE, even in high-risk settings. PPE from central government was sometimes not usable and the Government’s emergency helplines referred them to suppliers that did not have PPE.

The British Medical Association (BMA) has welcomed the Committee’s recommendation that the Government improve its approach to managing and distributing stocks of PPE. BMA council chair Chaand Nagpaul said: ‘The Government needs to listen to the experiences of doctors, of all health and social care workers, understand the life-threatening risks they had to take to care for their patients and then, do everything possible to make sure no healthcare worker is ever put at risk in this way again.’

NHS Providers said the Committee report highlights the difficulty in accessing PPE supply in the early pandemic stages: ‘PPE supplies are now much improved, including in social care settings, where the situation was worst. UK manufacturing efforts have been successful, and it is important that these continue to ensure sustainability of future supplies.’ It argued that ensuring staff have the right equipment to do their jobs safely is an ‘absolute priority’.


Weekly Economy Summary

COVID-19: Weekly Economy Summary – 11 February

The Economy Summary is part of our Weekly COVID-19 Bulletin, sent every Thursday. You can sign up to receive your copy here.

This week, the Government announced that businesses that took out Government-backed Bounce Back Loans to get through Covid-19 will now have greater flexibility to repay them.

The Treasury’s Pay as You Grow repayment flexibilities enable borrowers to tailor their repayment schedule, with the option to extend the length of their loans from six to ten years (reducing monthly repayments by almost half), make interest-only payments for six months or pause repayments for up to six months. They can also delay all repayments for a further six months, meaning businesses can choose to make no payments on their loans until 18 months after they originally took them out.

Pay as You Grow will be available to more than 1.4m businesses that took out a total of nearly £45bn through the Bounce Back Loan Scheme.

The resurgence of Covid-19 has led to a downward revision in forecasts of UK economic growth in 2021, made by the National Institute of Economic and Social Research (NIESR), from 5.9% to 3.4%.

In NIESR’s main-case forecast scenario, unemployment is expected to rise significantly following the end of job schemes in April, reaching 7.5% or 2.5m people by the end of the year. The report warns against Covid support being withdrawn prematurely and calls on the Chancellor to announce policies to support the labour market beyond April.

Similarly, Labour warned that businesses face a bombshell in April of more than £50bn, which will cost jobs and blow a massive hole in the recovery, as rates holidays, tax deferrals, VAT cuts, the furlough scheme and other Government support packages are due to end. On a similar note, IPPR published new analysis which concludes that more than half a million UK employers are at risk of collapse in the spring without the extension of business support, as cash reserves fall ‘perilously low’.

Resolution Foundation agrees with the extension of current support but also goes further, urging the Chancellor to introduce targeted grants for firms in the sectors most affected. Similarly, the Institute of Directors’ Budget submission calls for Chancellor Rishi Sunak to put entrepreneurs at the heart of his Budget and deliver a ‘shot in the arm’ through a stimulus package to unleash investment in start-ups alongside measures for the millions of owner-directors who have been without significant financial support for almost a year.

Members of the Work and Pensions Committee argued that the Chancellor must maintain for another year ‘at the very least’ the £20 per week increase in Universal Credit (UC) and Working Tax Credit introduced to support families during the coronavirus pandemic. The report warns that removing the payment as planned in April, while the effects of the pandemic are still being felt, would ‘plunge hundreds of thousands of households, including children, into poverty’ while dragging those already in poverty ‘down into destitution’.

While the Committee recognises that continuing with the increase would come at a ‘substantial cost’, it argues that this should be seen in the context of the Treasury’s own £280bn figure for total spending on coronavirus support measures this year.

The Joseph Rowntree Foundation has estimated that keeping the £20 rise would cost around £6.4bn in the next financial year. Similarly, in a new Women and Equalities committee report, committee members have issued 20 recommendations for the Government to tackle the gendered economic impact of coronavirus, including maintaining the £20 increase to Universal Credit.

Weekly Economy Summary

COVID-19: Weekly Economy Summary – 4 February

The Economy Summary is part of our Weekly COVID-19 Bulletin, sent every Thursday. You can sign up to receive your copy here.

It has been reported that proposals to support the economic recovery will be published in the week of 22 February, alongside a ‘road map’ out of the current Covid-19 lockdown in England.

In a letter to business secretary Kwasi Kwarteng, the Confederation of British Industry (CBI) warned that the current lack of clarity for businesses is hindering investment. CBI has called for more details from the Government on which sectors will be allowed to reopen first and how any new tier system will work, to enable them to plan ahead. Running alongside the roadmap, CBI argued there must be clear parameters for determining what, and for how long, economic support measures remain in place. On this, the trade group UKHospitality is urging the Government to extend the current VAT cut for the hospitality sector for another 12 months, alongside a business rates holiday for 2021-22.

Rishi Sunak has been warned by the leaders of Britain’s most influential business groups and the trade union movement that he risks plunging Britain into a period of mass unemployment unless he extends the furlough scheme.

Before the upcoming budget on 3 March, both sides of industry told the Chancellor that the economy was too fragile to end the wage subsidy scheme at the end of April and that he risked undoing the efforts to protect jobs over the past year if he did so. Frances O’Grady, the TUC general secretary, said Sunak should announce immediately that furlough would remain in place until the end of the year. The British Chambers of Commerce also called for an extension. It warned that the planned phased relaxation of lockdown restrictions does not mean that the problems of business are at an end.

Last Friday marked the deadline for applications to the third phase of the Self-Employed Income Support Scheme (SEISS). The Labour Party suggests that 2.4m self-employed people who rely on the SEISS scheme will be ‘left in the dark’ for weeks, with no announcement on the fourth grant due until the Chancellor’s 3 March Budget.

Bridget Phillipson MP, Labour’s Shadow Chief Secretary to the Treasury said that ‘leaving entrepreneurs in the dark about future support risks pushing even more out of business – and that will damage our recovery’. Labour also called on the Chancellor to open his support scheme for the self-employed to the 200,000 people who only have a 2019/20 tax return.

The APPG on Poverty released its report on the impact on poverty of not keeping the £20 uplift in Universal Credit and working tax credits, and of not extending the uplift to legacy and related benefits. The report references modelling carried out by Policy in Practice which found that if the uplift was withdrawn, 683,000 households, including 824,000 children, would no longer be able to afford to meet their essential needs. This number grows by 11% when the impact of the two-child limit is taken into account.

Research by Save the Children indicates that parents who received the uplift predominantly spent the money on essentials such as food, rents and bills, and items for home schooling. The APPG received multiple submissions calling for the extension of the uplift to legacy and related benefits. This was particularly pertinent as most people claiming legacy and related benefits are disabled, carers or have a long-term illness – the majority of whom fall in the poorest 10% of the population.

Similarly, according to a report by the Trussell Trust, nearly a quarter of a million parents who receive Universal Credit say they would be likely to cut back on food for their children if the £20 uplift to the benefit is removed. Over 40% of people who receive the benefit, around 2.4 million people across the UK, would be likely to cut back on food for themselves, the report reveals, and the charity forecasts a rise in the need for food banks if the £20 uplift is removed. It recommends maintaining the uplift and extending it to legacy benefits.

Weekly Health Summary

Covid-19: Weekly Health Summary – 4 February

The Health Summary is part of our Weekly COVID-19 Bulletin, sent every Thursday. You can sign up to receive your copy here.

Speaking at the Downing Street Press Conference this week, England’s Chief Medical Officer Professor Chris Whitty said that the number of cases, hospitalisations and deaths are on a ‘downward slope’.

This is the first time since the onset of the current wave that the numbers are being to fall, but despite this, the level of infection is still ‘incredibly high’ with the number of people in hospital with Covid-19 still above that of the first peak in April 2020. The Prime Minister suggested that by 22 February, the Government would be setting out a roadmap on restrictions including on plans to reopen schools in March.

Responding to the Press Conference, NHS Providers said it is ‘really good’ that infections are falling, but the situation for hospitals, the mental health community and ambulance services ‘remains extremely difficult’ with more than 27,000 Covid-19 patients in hospital and intensive care running at one and a half times baseline capacity. It argues that: ‘We should only loosen restrictions when we are absolutely sure we won’t risk triggering another wave of infections.’

On Wednesday, the UK recorded a further 1,322 deaths reported within 28 days of a positive test for coronavirus, bringing the total number of people who have died by this measure to 109,335, while a further 19,202 new cases were recorded.

Office for National Statistics (ONS) figures show that last week the number of deaths in care homes related to Covid-19 increased, accounting for nearly half of all deaths in care homes. Responding to the numbers, the Alzheimer’s Society has called on the Government to roll out the second dose of the Covid-19 jabs across care homes, and to provide a ‘concrete plan for safe meaningful visits to ensure people with dementia get vital contact with family carers’.

Nuffield Trust said the ONS figures represent another ‘terrible and deadly week of this relentless wave of the pandemic’. It has stressed that the level of death is ‘a long way from a typical winter’ highlighting that ‘excess deaths against the five-year average for this time of year are over 40% higher’.

Efforts to roll out the Covid-19 vaccine have continued this week with the Government reporting that more than 10 million people in the UK have received their first dose of a vaccine, including nine in 10 people aged 75 and over in England. It puts the Government in line with its Vaccines Delivery plan which aims to offer vaccines to the top four priority groups by the middle of February. It is thought that these top four groups account for 88% of COVID deaths, which is why the vaccines will play such a crucial role in saving lives and reducing the demand on the NHS.

Announcing that 10 million people have been vaccinated, the Health Secretary Matt Hancock said: ‘This terrific achievement is testament to the monumental effort of NHS workers, volunteers and the armed forces who have been working tirelessly in every corner of the UK to deliver the largest vaccination programme in our history.’ NHS Confederation said that the milestone is an ‘amazing achievement’ but called for clearer information on how well the vaccines will guard against ever-changing COVID-19 mutations as well as more clarity on the supply and delivery of the vaccines.

Finally, a study from Oxford University shows that the Oxford/AstraZeneca coronavirus vaccine provides sustained protection of 76% during the three-month interval until the second dose. After the second dose vaccine efficacy from two standard doses is 82.4% with the three-month interval being used in the UK.

The study supports the 4-12 week prime-boost dosing interval being adopted by the UK. Furthermore, the study indicates that the vaccine may have substantial effect on transmission of the virus with 67% reduction in positive swabs among those vaccinated. This is the first study to show this trend.


LGBTQ+ flag

LGBT+ History Month: Where we are now and what comes next

February is LGBT+ History Month, making it an appropriate time to review the progress made so far with LGBT+ rights in the UK and also some of the issues where action is still needed.

As a helpful summary by the House of Lords Library shows, the last two decades have seen a sustained push forward at Westminster with legislation to deliver LGBT+ rights. This started with the equalisation of the age of consent in 2000, moving through the 2003 repeal of Section 28 of the Local Government Act 1988 (this forbade local authorities from ‘promoting homosexuality’ and schools from teaching ‘the acceptability of homosexuality as a pretended family relationship’) and the 2004 introduction of civil partnerships and Gender Recognition Certificates, to the introduction of same-sex marriage in 2013.

There has also been action to right historic wrongs, most recently shown by the inclusion of posthumous pardons for army personnel convicted or cautioned for buggery under legislation dating back to 1688 in the Armed Forces Bill introduced last week.

Westminster has changed a lot since the era of the first openly lesbian MP Maureen Colquhoun, whose death was recently announced. 55 MPs identify as LGBT and the UK Parliament has been described as ‘the gayest in the world’, though there are no trans MPs.

Similarly, Government policy has moved on from the era of Section 28 – it has an LGBT Action Plan, which says its ‘vision is for everyone, regardless of their sexual orientation, gender identity or sex characteristics, to be able to live safe, happy and healthy lives where they can be themselves without fear of discrimination.’

Census and data
In another sign of progress, next month’s census will contain questions on sexual orientation for the first time. Iain Bell, deputy national statistician at the Office for National Statistics, says this will improve a situation in which ‘decision-makers are operating in a vacuum, unaware of the extent and nature of disadvantage which LGBT people may be experiencing in terms of health, educational outcomes, employment and housing’.

However, as Bell indicates, it is certainly not true to say that this progress means that LGBT+ people in the UK don’t continue to face significant challenges. The findings of the Government’s National LGBT Survey conducted in 2017 make for stark reading:

  • LGBT respondents were less satisfied with their life than the general UK population
  • Over two-thirds avoid holding hands with a same-sex partner
  • At least two in five had experienced an incident (such as verbal harassment or physical violence) because they were LGBT in the previous twelve months, yet over 90% of the most serious incidents weren’t reported
  • 24% had accessed mental health services in the previous twelve months
  • 2% had undergone so-called ‘conversion therapy’ and a further 5% had been offered it

Ahead of the 2019 election, Stonewall published a manifesto setting out a range of policies to address some of the issues facing the UK and global LGBT+ population. It is worth selecting just a handful of these to see where the Government is coming under pressure to act, and how it is responding.

Trans rights
Perhaps the most contentious issue is reform of the Gender Recognition Act. Stonewall’s manifesto called for reform to ‘remove the requirement for intrusive medical tests, introduce a simple administrative process based on the principle of self-determination, and provide recognition for under 18-year-olds and non-binary people’. The Government consulted on reform in 2018, noting that trans people find ‘the current system intrusive, costly, humiliating and administratively burdensome’ and ‘too few’ are able to get legal recognition.

However, when Liz Truss responded to the consultation last year in her capacity as Women and Equalities Minister, she said ‘the balance struck in this legislation is correct, in that there are proper checks and balances in the system and also support for people who want to change their legal sex’ but the Government would make the progress of applying for a Gender Recognition Certificate ‘kinder and more straightforward’ and open new gender clinics.

Speaking in a debate on Truss’s response, Conservative MP Crispin Blunt said it was a ‘crushing disappointment for trans people’, while Truss’s Labour shadow Marsha De Cordova described it as ‘deeply disappointing’. The decision fell within the broader context of a widespread debate around trans issues, with campaign groups raising concerns about the impact on single-sex spaces for women, and the NHS trust which provides the UK’s main gender identity development service for children currently appealing against a High Court ruling stopping it from referring under-16s to treatment that would block puberty.

LGBT+ education
In November, the BBC reported that the Government had withdrawn financial support from projects to tackle homophobic, biphobic and transphobic bullying in schools, although the Government insisted that the funding had always been due to run out. However, a change to the school curriculum from September 2020 means that the Government now expects ‘all pupils to have been taught LGBT content at a timely point’ as part of relationships and sex education.

Rachel Heah of Lancaster University has warned that the guidance is ‘vague’, while anti-bullying projects are required to ‘truly embed short and long-term positive changes for LGBT+ pupils’. That is this still a contentious subject was demonstrated in 2019 when the High Court upheld a ban on protests against LGBT+ relationships education outside a Birmingham school.

Hate crimes
Hate crimes against LGBT+ people also continue to be a problem, with the number reported to police trebling between 2014-15 and 2019-20 and rising by 20% in just the last year. While this could represent greater confidence in reporting them, the National Police Chiefs Council and Stonewall agree that they continue to be under-reported.

Nancy Kelley, Stonewall’s chief executive, said LGBT organisations were ‘definitely seeing a real increase in people reaching out for help’ and were ‘very concerned that this is a real rise in people who are being attacked because of who they are and who they love.’

Conversion therapy
Another area where campaigners would like to see more action is the ban on so-called ‘conversion therapy’ first promised by the Government as part of its 2018 LGBT Action Plan.

Speaking in the summer, Boris Johnson said the practice was ‘absolutely abhorrent and has no place in a civilised society’, and the Government would bring forward a ban once a study has been completed. In September, Truss said that she hoped this work would be completed by the end of the month, with further steps to be set out ‘shortly’ thereafter.

However, in January, Kemi Badenoch (Minister for Equalities) claimed that research was still ongoing.

National HIV Testing Week
This week is also National HIV Testing Week. Improvements in medicine have led to treatments which can make the virus undetectable and untransmittable, meaning that HIV/AIDS thankfully no longer has to lead to the awful consequences currently being so movingly portrayed in Russell T Davies’ drama It’s A Sin, which follows the lives of a group of young gay men in 1980s London.

To deliver the Government’s commitment to eliminate transmission by 2030, former health minister Steve Brine recently called for the Government’s forthcoming HIV Action Plan to include a commitment to make the ‘wonder drug’ PrEP which prevents HIV transmission available at GP surgeries, and for more routine HIV testing. Action is also needed globally, with the UN estimating that 38m people were living with HIV in 2019.

Finally, it’s worth remembering that the rights won so far are not guaranteed to remain secure. Promoting The Glamour Boys, his recent book about the gay or bisexual MPs who opposed Hitler,  Labour’s Chris Bryant warned ‘I often worry a younger generation of gay men and women think we will never go back to the era of repression. But I just say Berlin was the most liberal place in the world in 1930 – yet by 1934 gays were being arrested.’

Scottish budget Kate Forbes

Scottish Budget 2021-22

Vuelio’s Ingrid Marin writes about the highlights of the Scottish Budget, which aims to rebuild a fairer, stronger and greener economy.

As the Scottish Budget itself observes, this year’s publication ‘is like none before it, and is informed by the experiences and impacts of the past twelve months.’

The Budget has been developed against the backdrop of the clear and significant threat still posed by the virus, but also the hope for better days ahead, with Cabinet Secretary for Finance Kate Forbes claiming: ‘this is a Budget to provide help in the immediate term, but also to rebuild a fairer, stronger and greener economy’.


The Scottish Fiscal Commission forecasts published with the Budget suggest that GDP will fall by 5.2% in the first quarter of 2021, but the vaccine rollout will allow a return to growth in 2021-22, though GDP is not expected to return to pre-pandemic levels until the start of 2024.

These forecasts have assumed that the Coronavirus Job Retention Scheme will end in April and will not be replaced, acting as a driver for the forecast that unemployment will reach 7.6% in the second quarter of 2021. The Scottish Budget also notes the impact of Brexit on the Scottish economy; Scottish GDP could be 6% lower by 2030, compared to full membership of the EU.

In the immediate term, health must come first and lowering transmission rates remains the Scottish Government’s priority. The Budget supports the safe and sustainable recovery of the NHS, with record funding in excess of £16bn – an increase of over £800m in core Health and Sport funding. Acknowledging the impact Covid-19 has had on a significant number of people’s mental health, overall spending on mental health will be in excess of £1.1bn.

The Budget’s tax choices recognise the impact the pandemic is having on people, households and businesses. For example, in recognition of the unique pressures created by the pandemic on household incomes, the settlement includes an additional £90m to compensate councils who choose to freeze their council tax at 2020-21 levels.

The Scottish Government also announced that the 100% non-domestic rates relief for Retail, Hospitality, Leisure and Aviation sectors will be extended for at least three months. Should the UK Government bring forward an extension to their equivalent RHL relief that generates consequential funding, the Scottish Government will match the extension period as part of a tailored package of business support measures.

The Budget also helps people and households by securing £3.5bn for social security and welfare payments, including £68m for the ‘game changing’ Scottish Child Payment, which once fully rolled out will help lift an estimated 30,000 children out of poverty.

Seeing the first signs of hope and optimism for a better future, with the approval and roll-out of vaccinations and looking ahead to the COP26 summit, being hosted in Glasgow in November 2021, the Budget sets out a five year green economic recovery plan. The Scottish Government plans to spend £2bn on low carbon investment across the next five years, starting with £165m in 2021-22 towards large scale green infrastructure projects.

Similarly, over the next Parliament, the Scottish Government will deliver a new £100m Green Jobs Fund. This will invest £50m through enterprise agencies to help businesses which provide sustainable and/or low carbon products and services to develop, grow and create jobs. A further £50m will support businesses and supply chains to take advantage of public and private investment in low carbon infrastructure, and the transition to a low carbon economy, boosting green employment. In 2021-22, £14m will be allocated from the Green Jobs Fund.

The Scottish Government will provide £2.7bn across the Education and Skills budget. To ensure that the workforce can take advantage of the new and emerging employment opportunities as part of a green economic recovery, the Scottish Government will be providing support for individuals to retrain and upskill. In particular, it has developed the Climate Emergency Skills Action Plan and is planning to establish a Green Jobs Workforce Academy.

While this is an ambitious Budget to both protect and renew Scotland, Forbes highlighted that it also comes with significant fiscal uncertainty. She said: ‘In the absence of a UK Budget, much of the information we need to plan with certainty is missing. We must persevere with a Budget based on a partial

Weekly Health Summary

COVID-19: Weekly Health Summary – 28 January

The Health Summary is part of our Weekly COVID-19 Bulletin, sent every Thursday. You can sign up to receive your copy here.

Official statistics this week showed there have been 100,000 deaths attributed to Covid-19 since the start of the pandemic. Speaking at the Downing Street press conference, Prime Minister Boris Johnson said: ‘I am sorry to have to tell you that today the number of deaths recorded from Covid in the UK has surpassed 100,000, and it is hard to compute the sorrow contained in that grim statistic.’

In the House of Commons on Wednesday, he said he takes full responsibility for all the actions that Government has taken during the pandemic and promised to learn the lessons of what has happened. Meanwhile, Labour Leader Kier Starmer called the number of deaths a ‘tragic milestone’ and accused the Government of being slow in its response to the pandemic, including on entering lockdown, distributing PPE, protecting care homes and securing borders.

NHS Providers said it is a ‘tragedy’ that there have been over 100,000 deaths from Covid-19 and paid tribute to the commitment of NHS and care staff. It added: ‘We won’t know the true impact of Covid-19 for a long time to come because of its long-term effects – but, as well as the high death rate, it’s particularly concerning that this virus has widened health inequalities and affected Black, Asian and minority ethnic communities disproportionately.’

The Health Foundation has argued ‘the scene for the current crisis was set long before the virus arrived’, and suggests that a lack of long-term planning and historic underinvestment in public services led to an inadequate social care system, staff shortages in the NHS, and low capacity in public health. The Foundation has called for a full inquiry on the pandemic, which assesses if health and economic inequalities in the UK have hindered its response.

On Monday, the Office for National Statistics released figures on coronavirus related deaths by occupation. It found that between March and December 2020 there were nearly 8,000 Covid-19 related deaths in England and Wales within the working age population (those aged 20 to 64 years). Nearly two-thirds of these deaths were among men, with men in elementary occupations or caring, leisure and other service occupations having the highest rates of death involving Covid-19. Men and women who worked in social care or nursing occupations had a significantly higher rates of death involving Covid-19.

NHS Confederation said the figures ‘demonstrate all too clearly the toll the pandemic has taken’ on frontline workers and said that there must be measures to protect workers who are more exposed to the virus. Meanwhile, the Royal College of Nursing (RCN) has called for more detailed information on how Covid-19 is impacting health and care workers, including factoring in ethnicity. RCN Chief Executive and General Secretary Dame Donna Kinnair said: ‘The loss of life of health care workers is heart-breaking and is felt profoundly by every member of the nursing community…The fact the rate of death amongst nursing staff is significantly higher than the general population highlights the absolute need to properly investigate why this is happening and give them the protection they need.’

Speaking to the Health and Social Care Committee on Tuesday, NHS England Chief Executive, Sir Simon Stevens highlighted the pressures on the NHS front line in light of the ongoing pandemic. There are just under 33,000 Covid-19 inpatients in hospitals within England over the last two weeks, this is a sharp acceleration from Christmas, where the total was around 18,000. The level of coronavirus rates differs across the country, with the Midlands reporting that 75% of its critical care wards are filled with Covid-19 patients.

The latest Real-time Assessment of Community Transmission of Coronavirus (REACT-1) survey, published today, shows that although infections in England have flattened, case levels remain very high. Professor Paul Elliott, director of the programme at Imperial College London, said: ‘We’re not seeing the sharp drop in infections that happened under the first lockdown and if infections aren’t brought down significantly, hospitals won’t be able to cope with the number of people that need critical care.’

The Health and Social Care Secretary Matt Hancock said the figures are a ‘stark reminder of the need to remain vigilant’.

Weekly Economy Summary

COVID-19: Weekly Economy Summary – 28 January

The Economy Summary is part of our Weekly COVID-19 Bulletin, sent every Thursday. You can sign up to receive your copy here.

Recent Office for National Statistics (ONS) data shows that the UK unemployment rate, in the three months to November 2020, was estimated at 5%, 1.2 percentage points higher than a year earlier and 0.6 percentage points higher than the previous quarter. While youth unemployment has stopped rising, young people are bearing the brunt of the UK’s pandemic-induced economic crisis, with 18-24 year-olds accounting for almost half (46%) of the employment fall since the crisis began.

While the Government’s £2bn Kickstart jobs scheme was introduced to ameliorate the impact of the pandemic on young people, data from the Department for Work and Pensions showed that fewer than 2,000 young people have so far started new roles under the scheme. However, the programme, which launched in September, did create 120,000 temporary jobs to date. Chancellor Rishi Sunak said that coronavirus restrictions were making it harder for more young people to get started but he expected the number to rise once restrictions are lifted. Anticipating a rise in numbers, the Government has made it simpler for smaller firms to benefit from joining the scheme by removing the limit requiring they create a minimum of 30 vacancies to apply directly. This means that any business will be able to directly access the Department for Work and Pensions scheme without the need of Kickstart gateways.

Despite unemployment rising, a recent British Chambers of Commerce and Totaljobs survey of business recruitment intentions revealed that there was a ‘modest’ increase in the number of businesses attempting to recruit during Q4 compared to the previous quarter, though the figures are still below pre-pandemic levels. Firms in the public, voluntary and construction sectors were most likely to recruit, with hotels and catering firms the least likely.

During this week’s Treasury oral questions, the Chancellor recognised the significant impact of Covid-19 and stressed that the Treasury will review all its economic measures supporting businesses and jobs at the upcoming Budget in March.

Ex-Prime Minster Gordon Brown called for emergency measures to support businesses in the Budget after new research from the LSE warned almost 1m UK companies – employing 2.5m people – were at risk of failure in the next three months. Using data published by the Office for National Statistics, LSE found that the UK’s micro businesses, with less than ten employees, were particularly at risk of going under. Brown commented: ‘Governments cannot afford to be behind the curve – especially in a crisis. They have to be at least two steps ahead’.

According to analysis of a Bank of England survey by the Labour Party, the Chancellor’s ‘out of touch’ plan for economic recovery is set to ‘unravel’ because only 3% of UK households plan to spend the savings built up during 2021. Citing comments on savings and spending made by Rishi Sunak last month, Labour says the Chancellor ‘is wrong to pin his hopes solely on a consumer boom to get Britain on the path to recovery’, and calls on the Government to take urgent action to build confidence in the economy ahead of a series of ‘cliff edges’ including the deadline for applications to the Self-Employed Income Support Scheme and withdrawal of the £20 Universal Credit uplift.

There has also been much talk this week about those who are still not covered by the Chancellors economic measures. According to a report by the Institute for Fiscal Studies, over 1.5m self-employed workers who do not qualify for support through the Self-Employment Income Support Scheme could be supported at modest cost to the Government. The report says ministers have ‘actively chosen to exclude these people’ from the scheme, and the think tank argues that the Government could help the 1.3m people who receive less than 50% of their income through self-employment and another 225,000 people who have profits more than £50,000. Extending SEISS grants to those with income between £50,000 and £100,000 would cost £1.3bn per quarter with a payment of £7,500 per person, while extending the scheme to people with less than 50% of their income from self-employment would cost between £500m and £800m per quarter.

Weekly Health Summary

Covid-19: Weekly Health Summary – 21 January

The Health Summary is part of our Weekly COVID-19 Bulletin, sent every Thursday. You can sign up to receive your copy here.

The Government has reported the highest daily death toll since the coronavirus pandemic began this week, with daily figures from Wednesday showing that there were 1,820 deaths within 28 days of positive test. Prime Minister Boris Johnson has called the figures ‘appalling’. He said: ‘I must warn people there will be tough weeks to come, but as the vaccine goes in and that programme accelerates, there will be, I think, a real difference by spring.’

Furthermore, Office for National Statistics published data on the number of deaths registered for the week ending 8 January, which showed a large increase in fatality from the previous week. Responding to the data, Nuffield Trust said the rise can be attributed to the rapid spread of Covid-19 throughout December. The Trust highlighted that with over a third of deaths registered attributed to Covid-19 and with Covid-19 accounting for over half of hospital deaths, there is a ‘real pressure’ on services.

Research from the Royal College of Physicians (RCP) published this week shows that pressures placed on doctors by the pandemic are taking a significant toll, with more than one in four doctors reporting that they have sought mental health support during the pandemic. In a survey of its members the RCP found that the majority of doctors (64%) feel tired or exhausted, and many are worried (48%). The RCP argues that the second wave of coronavirus is ‘undoubtedly hitting the NHS far harder than the first’ with the rapid rise in cases is being felt by doctors across the NHS. Additionally, delays to treatment in other areas of medicine due to the prioritisation of COVID-19 patients are also being acutely felt.

Meanwhile, efforts to distribute the Covid-19 vaccine continue. On Tuesday, the Department for Health and Social Care confirmed that more than four million people received first dose of a Covid-19 vaccine. This translates to more than half of those aged 80 and over and more than half of elderly care home residents. Speaking at the press conference on Monday, Health Secretary Matt Hancock said: ‘We’re on track to deliver our plan to vaccinate the most vulnerable groups by the middle of February, the groups that account for 88% of COVID deaths.’

This comes as the Government confirmed it now has the capacity to roll out vaccines to people aged from 70 years and clinically extremely vulnerable people. Though vaccinating the over 80s and care home residents will remain the priority, vaccination sites that have enough supply and capacity for vaccinating further people are allowed to offer vaccinations to the next two cohorts.

Responding to the news, NHS Providers called the development a ‘major milestone in our fight against COVID-19’. However, with intense pressure on NHS services, it warns ‘the pandemic is far from over’. It said: ‘Rising admissions rates mean trust leaders are becoming increasingly concerned about ensuring there is enough capacity – in terms of beds and staff – to safeguard the quality of care for patients.’

Finally, amid increasing staff absences and infection rates in care homes, the Government announced that the social care sector will receive £269 million to boost staffing levels and testing. The new funding will protect and support the social care sector, including care homes and domiciliary care providers, by increasing workforce capacity and increasing testing. Vital infection prevention and control guidance on staff movement in care will also be reinforced. Minister for Care Helen Whatley said the Government is ‘continuing to listen to care providers to make sure they have the help they need, from free PPE to extra testing, along with all the work to vaccinate care home residents, staff and the wider social care workforce.’

Vic Rayner, Executive Director of the National Care Forum welcomed the news and called for the funding to be urgently dispatched. She said that it is positive that the Government has recognised the extreme staffing pressures currently faced by care providers, but suggested that social care funding must be kept under continuous review, so care organisations are ‘properly supported now and in the future’.