Sustainably managing the soil is crucial to biodiversity

Baroness Bennett: Sustainably managing soil is crucial to our biodiversity

Green Party peer and former leader Baroness Natalie Bennett calls on the Government to accept an amendment to the Environment Bill to ensure that soil health and quality is sustainably managed, given that it stores carbon and its biodiversity is ‘severely under threat’.

Perhaps this morning you enjoyed a piece of satisfyingly crisp toast, after you pulled on a soft, favourite cotton T-shirt. You looked out at the garden where the last of the autumn flowers are adding morning cheer.

All of those experiences are entirely – completely – dependent on soil.

Mostly, we don’t think about this key component of life on our land. If we do, it is as ‘dirt’ – trodden into the house by children or dogs, or ‘mud’, something to plod through at festival time.

Yet increasingly, farmers, scientists and governments, are recognising that the soils that feed us, clothe us and provide the basis for the plant oxygen we breathe, are in a terrible state.

The life that should make them thrive – earthworms, tardigrades and the billion microbes that should be in a healthy teaspoonful – has been poisoned by pesticides and artificial fertilisers, and increasingly contaminated with microplastics. A quarter of the world’s biodiversity is in soils, yet it is severely under threat.

Soils are packed down by multiple runs of heavy tractors, the air squeezed out, so the rain rushes off them, and floods our communities. Erosion by water and wind carries soil away, sometimes in great dust storms, other times in turgid, heavy rivers.

We’ve thought a lot more, recently, about the quality of our air and the pollution of our waterways.

Campaigners like Rosamund Kissi-Debrah, whose daughter Ella was tragically killed by filthy air, have been joined by many tens of thousands of supporters to demand a clean-up.

More recently, water campaigners, from SOS Whitstable to the Ilkley Clean River Campaign, which won the first bathing water status for a river, have attracted major attention.

Both of those campaigns are recognised in the amendments sent from the House of Lords for the Environment Bill, seeking to strengthen protections. Sadly, they were rejected, although the word on the street is that the Government might still give way under public pressure on one or both of these issues.

But at least the Government recognised in its plan for the law that long-term, serious targets were needed for air and water.

For soil, there was no target. The Government had produced a two-legged stool in its plans. It won’t stand up without a soil target as well.

That ‘third leg’ was added in the House of Lords, the amendment backed by the equal-highest balance of votes of the 14 sent back to the House of Commons.

Nearly all of them were thrown out (The one clear win was an undeniably sensible measure to change a provision allowing the Government to introduce charges for single-use plastic items to be extended to all single-use items – obviously essential for a circular economy).

There are many important amendments that I’ll be fighting for: for the Office for Environmental Protection to be independent and able to hold the Government to account; for strong water and air protections and for environmental rules to apply to the Treasury and the military.

But the soil is one obvious, essential, really unarguable change. After all, this is only delivering what the Government says is its own target. To have our soils sustainably managed by 2030, a scant nine years away.

And while Boris Johnson tried to say under the pressures of Covid and Brexit that ensuring the nation didn’t go hungry was a job for business, not his concern, it is clear that ensuring we can feed ourselves in future is something that the Environment Bill has to address, by looking after the soils that will do that, as well as store carbon and be the foundation for restoring our terribly nature-depleted islands.

Baroness Bennett of Manor Castle (Natalie Bennett) was leader of the Green Party of England and Wales from 2012 to 2016.

This blog post is part of a cross-party series on Vuelio’s political blog Point of Order, which publishes insight and opinion to help public affairs, policy and comms professionals stay ahead of political change and connect with those who campaign on the issues they care about. To find out more or contribute, get in touch with Vuelio Politics.

Conservative Party Conference 2021

Conservative Party Conference 2021: Health and Social Care Secretary Sajid Javid on ‘renewal and reform’

Delivering his first major speech as Health and Social Care Secretary, Sajid Javid set out his vision for reform and renewal. His immediate priorities are to get the country of the pandemic and to tackle the NHS waiting lists, as well as setting out an agenda for reform across health and care for the long-term.

Although Javid doesn’t shy away from prioritising the funding that the sector will need to come out of the pandemic, he argued that previous Governments have made the mistake of choosing cash or reform. Instead, he promised that 2022 ‘will be a year of renewal’. With this, he mentioned the review of leadership and management in health and social care which will be led by Sir Gordon Messenger. The comprehensive review promises to highlight the outstanding leaders who drive efficiency and innovation across services. He also wants to drive innovation in the NHS to create a fully-digitalised system across the country.

Speaking on the impacts of the pandemic, he said that the country must ‘level up’ on health as entrenched health disparities have been exposed by the pandemic. The Health Foundation has welcomed the Health Secretary’s emphasis on health as part of the leveling up agenda, but highlighted research which shows that the public health grant has been cut by 24% in real terms per capita since 2015/16, with cuts falling more heavily on those living in the most deprived areas of England.

Javid also highlighted that the pandemic has caused long waiting lists for NHS care, which are currently hovering around 5.6million but could reach up to 13million under the Government’s own projections. He suggested that surgical hubs and 40 new Community Diagnostic Centres will form part of the catch-up programme. NHS Confederation has said that although inroads are being made in waiting lists, there is still intense pressures on health services and the Government ‘must now be upfront and level with the public as to how long it will take to deal with the care backlog’.

Speaking on social care, Javid said the upcoming social care reforms will prevent people from having to pay ‘catastrophic’ costs for their care, but fundamentally people should depend on their families and their community before they turn to the state.

Labour’s long-term social care campaigner Barbara Keeley has argued that this would force more of the care burden onto unpaid carers, she said: ‘These comments by Sajid Javid are shocking and deeply worrying from the Secretary of State responsible for social care’.

The Women’s Equality Party has highlighted the gender implications of Javid’s remarks, as women are more likely to hold the burden of care, asking: ‘And what do you actually mean by this? That women’s unpaid labour should be relied upon to uphold the state thereby pushing women out of careers and into financial decline? Are women not included in your plan to ‘level up’?’

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Labour Party Conference Rachel Reeves

Labour Party Conference 2021: Shadow Chancellor Rachel Reeves on the ‘everyday economy’

Speaking at her first Labour conference as Shadow Chancellor, Rachel Reeves said she doesn’t look at the economy as just some lines on a graph but instead she concentrates on the ‘everyday economy’, the workers that got us through the Covid crisis and the businesses which give life to our high streets. The steps she outlined ‘represent an approach that is unapologetically pro-worker and unapologetically pro-business’.

Accusing the Government of not respecting the workers that keep our economy going, she highlighted that the Conservatives would take £20 a week from Universal Credit recipients and increase National Insurance tax while allowing food, fuel and energy costs to increase. She set out Labour’s economic plan for Government, including a new deal for all workers which will see zero hours contracts banned, fire and rehire outlawed, sick pay increased, flexible working from day one as well as higher living wages. This came as Shadow Work and Pensions Secretary Jonathan Reynolds told the conference that Labour would not only cancel the cut in Universal Credit but also look to replace Universal Credit with a better system.

In her speech, Rachel Reeves also pledged to make the tax system fairer. Labour will ensure that the tax burden isn’t just falling on the wages of working people, but that those at the top pay their fair share, too. This would include a review of the current tax break system so that it delivers for the taxpayer, rather than those ‘who can afford the best advice’. George Dibb, head of IPPR’s Centre for Economic Justice, welcomed the focus on a fairer tax system saying that right now the system is skewed to tax workers more than those who get their income from property or shares, and hasn’t kept up with the massive boom in property wealth over the past 20 years.

The Shadow Chancellor has pledged to scrap business rates and replace them with fairer system. Labour is also calling on the Government to freeze business rates next year and to increase the threshold for small business rates relief, giving small and medium sized businesses in all sectors a discount next year. To pay for these measures, Labour proposed that the Digital Services Tax should be increased to 12% on some online companies that thrived during the pandemic.

Responding to the Shadow Chancellor Rachel Reeves’ pledges on business rate reform, the Federation of Small Businesses highlighted research indicating that 200,000 small firms would be removed from the business rates system if its reforms were taken forward by Labour as pledged. Their research showed that that the English regions that will most benefit from this reform would be the major political and levelling up battlegrounds of the North East, North West, Yorkshire, and South West of England. Tony Danker, CBI Director-General, said that ‘with businesses just recently starting to recoup their losses a freeze in rates will provide much needed breathing room, as will the rise in rates relief for SMEs. But going it alone on digital services tax is high risk and could undermine the UK’s competitiveness at a time when need to be prioritising going for growth’.

Julian Jessop, Economics Fellow at the Institute of Economic Affairs, said that while business rates do need fundamental reform, none of the main parties has a credible alternative. He also criticised the proposed rises in digital services tax as it is a tax on sales rather than profits – and any increase will inevitably be passed on to consumers.

In her speech, Reeves promised that she would be a ‘responsible chancellor’ and announced that Labour will create a new, independent Office for Value for Money tasked with keeping a watchful eye on how public money is spent. Some have questioned whether ‘Labour’s new quango might just be a rebranding of what is already happening’ while others have argued that key to the success of a new Office for Value for Money will be bringing more smaller firms into local and national government supply chains.

Lastly, Reeves promised that she would be ‘Britain’s first green chancellor’, and confirmed that the next Labour Government would commit an additional £28bn of capital investment in the country’s green transition for each and every year of this decade. The new investment would go on projects including offshore wind, developing hydrogen industry, and insulating homes. IPPR welcomed Labour’s ambition to boost investment in the UK’s transition to net zero saying it would be a significant move towards meeting the annual investment in reducing carbon emissions and the transition to net zero that IPPR calculates is needed at least until 2030, if the UK is to meet its existing net zero target.

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COP26 guest post from Vince Cable

Looking ahead to COP26

This is a guest post from Sir Vince Cable, former leader of the Liberal Democrats and a former Secretary of State for Business, Innovation and Skills.

COP26 is a vast intergovernmental conference under United Nations auspices and hosted by the UK in Glasgow. The key objective is to secure agreed national commitments leading to demonstrable action to limit climate change.

These annual conferences review progress in implementing the broad commitments agreed at COP21: the Paris Agreement. This year matters more than most since the scientific evidence and the consequences of climate change are starker than ever. A series of natural phenomena – unprecedent wildfires, flooding, extremely high temperatures in Siberia – have illustrated the risks of unchecked warming. COP 26 is crucial to get governments to commit themselves to ambitious but realistic targets for curbing emissions of Greenhouse Gasses (GHGs) which are consistent with safe and tolerable levels of warming (around 1.5% over the century).

It is easy to be cynical. Heads of government will give speeches making commitments to be implemented long after they have left office. Officials will then craft a communique reflecting the interests of countries ranging from small, island states worried about being swamped by sea-level rise to hydrocarbon-based economies like Saudi Arabia and Russia; from major GHG emitters like China and the USA to microstates; from post-industrial, to industrialising to pre-industrial societies.

There are some reasons for optimism. Biden has replaced Trump. Trump was skeptical about climate change; was a strong advocate of the coal industry; and withdrew from the Paris Agreement. Biden has re-joined the Paris Agreement and will commit the USA to ambitious targets backed up by money and legislation. He also sets store by alliance-building and may be able to extract commitments from hitherto uncooperative countries like Australia. Optimists can also point to the success of earlier multilateral agreements like the Montreal Protocol governing chemicals which damage the ozone layer (an agreement in which Britain’s Margaret Thatcher played a key role)

But there are serious obstacles to radical policies in the USA. Support varies greatly from state to state – from committed California to hostile Texas – and Congressional support is not guaranteed. Even in countries with a strong environmental awareness, action lags rhetoric, as with Germany’s continued attachment to coal. And many developing countries will demand large amounts of money from industrialised countries to adapt to climate induced changes that they themselves did not create. Britain’s cut in its aid budget sends the wrong message.

The biggest problem however is China which is currently the world’s biggest emitter by some margin. President Xi has made a strong commitment to reach net zero emissions by 2060 and to reduce emissions after 2030; but there is little detail and a continuing plan to build many new coal-powered power stations, though China has now committed itself to stop supporting overseas coal burning power stations. Relations with the USA are toxic making collaboration in science research and technology exchange more difficult. Anger over Britain’s role in an alliance to confront China also increases the risk that China may choose to postpone its climate change offer until after Glasgow.

The British government has put the odds of a successful summit at 60:40. My heart is with the 60%; my head with the 40%.

Want more on climate change and the environment? Check out our Top 10 UK Green Blogs ranking and advice shared during CIPR’s Climate Change and the Role of PR half-day conference earlier this year. 

All-Party Parliamentary Groups

Are All-Party Parliamentary Groups something to worry about?

This is a guest post by Gavin Devine, founder of Park Street Partners and member of the PRCA Public Affairs Board.

At the start of August, two newspapers splashed stories about All-Party Parliamentary Groups. First the Mirror claimed that a ‘Tory MP [had] handed paid roles on Parliamentary groups’ to a lobbyist; and then the Guardian said that ‘MPs serving on informal parliamentary groups while working in second jobs are facing scrutiny’. In both cases it was All-Party Parliamentary Groups in the spotlight. And each story revealed a whole bunch of misapprehensions about these Groups and also how regulation of them is actually working rather well.

First, the misapprehensions. It is standard fare for the media to overstate the importance of All-Party Parliamentary Groups, implying that they give some sort of privileged access or play a formal role in the legislature’s activities. Sometimes they are put on a par with Select Committees; as a former Parliamentary Clerk, this used to be pretty irritating. The fact is, they have none of these powers or responsibilities.

What APPGs do is bring together MPs with an interest in a particular subject to debate and discuss the issues, and perhaps even to work out ways to make their case to Ministers. But they have no formal role and their powers are no greater than an individual MP or Peer acting on their own. They have no access to public money, so the idea of doling our paid roles is a touch misleading. What these Groups do can be important, but it is really important not to overstate their influence.

Another misapprehension surrounds the ‘revelation’ that MPs who have interests in the subject matter often serve on these Groups – or even set them up. Well, that’s the point. Surely it can be no surprise that MPs from former coalmining areas dominate the Coalfield Communities APPG, or that those who have an interest in manufacturing or have relevant firms in their constituencies are part of the Aerospace APPG? And is it really unexpected that an MP who worked in the packaging industry for 30 years now has a role as Chair of the Foodservice Packaging Association and at the same time runs the Packaging Manufacturing Industry APPG? What is the Guardian’s point: that Mark Pawsey shouldn’t use his experience and contacts to ensure that an important industry is regulated efficiently and effectively?

Which brings us to the second point: that regulation of these matters works rather well. In fact, neither of these articles could have been written without the transparency engendered by the existing rules. We know that the various MPs cited by the Guardian have paid external roles, and even how much they are paid, because they have declared it in the Register of Members’ Interests. We know they serve on various APPGs because they have completed the very frequent returns required for the Register of All-Party Parliamentary Groups. We can see who their fellow office-holders are and if anyone provides them with support in the same, available-to-the-public-on-the-internet, register. In this case, at least, Parliament’s rules and regulations really deliver.

It seems to me that what’s really bothering the media isn’t APPGs at all: it is MPs having second jobs or being too close to ‘business’. There’s a debate to be had about Members received money from outside sources; personally, I think it is entirely legitimate if it is declared for all to see. And the discussion about proximity to companies is a tired conversation about lobbying itself. I don’t know how many times it has to be pointed out that if Parliamentarians do not speak up for major employers in their constituencies or industries they used to work in or businesses they understand and support we will end up with bad laws and regulations devised by officials who can never have knowledge of every facet of the economy and society they oversee. Lobbying is all about ensuring that the legislative process is well-informed, and if APPGs play a role in that, great.

Sitting behind all this is the on-going inquiry by the Committee on Standards into the rules for and regulation of All-Party Parliamentary Groups. This will consider all of the issues raised by the two newspaper articles and much else besides. I hope that the Committee will put any prejudices about ‘big business’ aside and judge the work of APPGs representing industry in the same way as those that are ostensibly more ‘worthy’. And I hope too that it will reflect on the way that the existing rules already promote openness; and that without APPGs MPs and Lords with common interests would simply get together informally without any transparency at all.

Read more political analysis from the PRCA in this overview of the association’s investigation into unregulated lobbying from February of this year

For more on the intersection of PR with politics, check out this guest post from BDB Pitman’s Stuart Thomson Guilt by association and why we need to fight back

Inflation spikes

Can the inflation spike still be justified as temporary?

As we emerge into a post-pandemic era, the inflation debate has been heating up. The key question is: will the price increases be isolated and short lived, or are they a cause for concern? It seems like central banks are not worried over inflation now – the catchword regarding inflation seems to be ‘transitory’ – but for how long is yet to be seen.

In the UK, the Consumer Prices Index (CPI) rose by 2.5% in the 12 months to June 2021 – up from 2.1% in the 12 months to May; up from 1.5% in the 12 months to April 2021 and 0.7% in the 12 months to March 2021. CPI was at 0.7% in January 2021.

The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target and in their most recent report the Committee’s expectation is that CPI will pick up further above the target, owing primarily to developments in energy and other commodity prices, and is likely to exceed 3% for a temporary period. More generally, the Committee’s central expectation is that the economy will experience a temporary period of strong GDP growth and above-target CPI inflation, after which growth and inflation will fall back.

Explaining this further, Governor of the Bank of England Andrew Bailey said that Covid has not had the same impact on our economy as other shocks did in the past. That’s because lockdown affected both supply and demand in the economy. The fact that the UK authorities supported many people’s wages, and helped business to keep going during lockdown means the economy should bounce back quicker. So he doesn’t expect the economy to suffer long term damage. He does expect the cost of living to go up in the coming months, but that should only be short-lived. Mr Bailey said: “It is important not to over-react to temporarily strong growth and inflation, to ensure that the recovery is not undermined by a premature tightening in monetary conditions.”

While the Bank’s Monetary Policy Committee (MPC) dismissed the rise in inflation as “transitory”, on his last day as Chief Economist Andy Haldane sounded the alarm over rising inflation. He expects that by the end of this year, UK inflation to be nearer 4% than 3%. He said ‘this increases the chances of a high inflation narrative becoming the dominant one, a central expectation rather than a risk. Even if this scenario is a risk rather than a central view, it is a risk that is rising fast and which is best managed ex-ante rather than responded to ex-post.’ Andy Haldane was the only member of the MPC to vote for tighter policy to head off the threat to price stability.

Michael Saunders, an external MPC member, has sent the strongest signal that he is now inclined to vote for an early end to quantitative easing, saying last month that ‘it may become appropriate fairly soon to withdraw some of the current monetary stimulus’. Sir Dave Ramsden, BoE deputy governor for banking and markets, has also taken a more hawkish tone, saying the conditions for tightening could be met ‘somewhat sooner than I had previously expected’.

Debates around inflation come as the British Chambers of Commerce (BCC) warned that UK companies were the most concerned about inflation for almost a decade. 46% of respondents to the Quarterly Economic Survey cited inflation as an external factor of concern to their business, the highest percentage since Q4 2011, and up significantly from 30% in Q1. However, the BCC said there were signs that current pressures could prove temporary because there was little evidence of inflation from employers raising workers’ wages – regarded as pivotal for sustained price rises.

According to the most recent forecasts by the National Institute of Economic and Social Research (NIESR), CPI inflation is expected to rise to 3.5% in the last quarter of 2021, peaking at 3.9% in the first quarter of 2022 but then falling again to settle around 2% in 2023. ‘To prevent a possible dislodging of inflation expectations, the MPC should prepare the ground for normalising its monetary policy stance, and this involves clearly communicating how Bank Rate and asset purchases will be adjusted in response to higher inflation,’ NIESR Deputy Director Hande Kucuk said. The BoE’s Monetary Policy Committee should emphasise that policy tightening would be gradual, to avoid a sudden tightening of financing conditions that could derail recovery, she added.


Baroness Bennett: ‘We have to stop wrecking other people’s countries’

This is a guest post by Green peer Baroness Bennett of Manor Castle (Natalie Bennett), who was leader of the Green Party of England and Wales from 2012 to 2016.

What’s been called the development of the Global North – the creation of the society we have today – was built on expropriation and extraction through force from the rest of the world. It is been calculated that India alone saw $45 trillion in wealth extracted over 173 years.

But the practice isn’t just history. It is still ongoing today, as the conclusions of the UK’s independent Global Resource Initiative Taskforce (GRIT) demonstrate. It was a far from radical group – including reps from Cargill, McDonald’s and Tesco – but it could not but conclude that the UK needed a ‘new strategic approach… to overcome the challenge of commodity-driven deforestation and land conversion.’ Between 2016 and 2018, an area equivalent to 88% of the total UK land area was required to supply the UK’s demand for just seven agricultural and forest commodities.

The new Schedule 17 of the Environment Bill – addressing products from forests and deforested lands – aims to address some of that. But in the debate in the Committee stage of the Bill, members from all sides of the upper house tore into that weakness of the Schedule.

It was the Conservative Lord Randall of Uxbridge who put down the most far-reaching amendment, calling for a global footprint target. In our climate emergency and nature crisis, in a world wracked by poverty and inequality, the need for that is obvious and undeniable. We need to reduce our ecological footprint by around 75% to fit within ecological limits.

In commenting on that, I looked at the ways in which it would directly, immediately, benefit the UK. It would reduce the risk of future pandemics. It would help safeguard against the economic costs of biodiversity decline and climate change; the WWF Global Futures report calculated that will cost the world at least £368 billion a year, with the UK suffering annual damage to its economy of £16 billion a year by 2050. It would also support the resilience of UK and global businesses and help businesses to manage risk proactively.

Crossbencher Baroness Meacher moved the simplest – unarguably right – amendment, noting that the Schedule only covers companies doing due diligence to ensure that they are not taking products from illegally felled forest land. But ‘legal’ deforestation is often profoundly disastrous and unsustainable: 2.1 million hectares of natural vegetation within the 133 Brazilian municipalities that currently supply the UK with soya could be legally deforested. It also introduces a perverse incentive to encourage the legalisation of deforestation.

UK businesses could also benefit from this amendment. Currently, in many parts of the world, laws relating to land use, forests and commodity production are numerous, uncertain, inconsistent and poorly implemented. It is very difficult to determine legality, and companies can be trapped in a regulatory, paperwork minefield from which the amendment could free them.

An amendment from Baroness Jones of Whitchurch brought in a further dimension, the inter-relationship of human rights and the protection of nature. It called for the recognition of customary land ownership and control. Some 80% of indigenous and community lands are held without legally recognised tenure rights. We know that in indigenous and tribal territories, deforestation rates are significantly lower. Ensuring respect for customary tenure rights is an efficient, just and cost-effective way to reduce carbon emissions.

A further amendment, tabled by Lib Dem Baroness Parminter, was essentially the reverse of what the House of Lords achieved in the Financial Services Bill. After a lot of wrestling, the House of Lords finally got a reference to climate into that. What we also need to do is to get the need to control the disastrous impacts of finance addressed in all the other Bills.

The UK is the single biggest source of international finance for six of the most harmful agribusiness companies involved in deforestation in Brazil, the Congo basin and Papua New Guinea, lending £5 billion between 2013 and 2019.

If deforestation was a country, it would be the third largest emitter of carbon, behind China and the US. Some 80% of deforestation is associated with agricultural production, yet figures published recently from five major UN agencies show that the number of people without access to healthy diets has grown by 320 million in the last year. They now number 2.37 billion in total. A fifth of all children under five are stunted because of lack of access to the most basic resource of all: food.

The need to reform Schedule 17 when we get to Report Stage in the House of Lords in September is clear. We have to stop wrecking other people’s countries. We have to ensure that our lives are lived within the limits of this fragile planet, and that everyone else has access to that basic level of resources that is their human right.

This blog post is part of a cross-party series on Vuelio’s political blog Point of Order, which publishes insight and opinion to help public affairs, policy and comms professionals stay ahead of political change and connect with those who campaign on the issues they care about. To find out more or contribute, get in touch with Vuelio Politics.

Moves at the Department of Health and Social Care

What’s on Sajid Javid’s agenda at the Department for Health and Social Care?

During an eventful weekend, Matt Hancock resigned from his position of Secretary of State for Health and Social Care after he and his aide Gina Coladangelo were caught on camera kissing in his Whitehall office, breaching Covid guidelines.

He has now been replaced by Sajid Javid, who being no stranger to Cabinet roles, is an experienced Government minister. He has previously been Home Secretary, Housing Secretary, the Business Secretary, and most recently Chancellor. In a statement, Javid said: ‘I’m incredibly honoured to take up the post of Health and Social Care Secretary, particularly during such an important moment in our recovery from COVID-19… I want our country to get out of this pandemic and that will be my most immediate priority’.  Jeremy Hunt, a former Health Secretary, has said Javid is an ‘excellent choice’ and argued that as an ex-Chancellor he will be able to ‘negotiate formidably’ with the Treasury.

However, Labour’s Shadow Health Secretary Jonathan Ashworth has raised concern over the decision. He called Javid’s appointment a step backward for the UK and highlighted that the NHS and social care suffered underfunding and cuts due to the decisions taken by Treasury ministers including Javid, ‘a key architect of Tory austerity’.

Meanwhile, the former Special Adviser Dominic Cummings has called Javid ‘bog standard’ and an ‘awful’ choice to replace Matt Hancock.

Stakeholders from across the health and social care sector have highlighted that Javid will likely find himself with a rather busy workload despite only starting his new role on Saturday. Aside from the immediate priorities of addressing the ongoing coronavirus pandemic, rising NHS waiting lists, social care reform and NHS restructuring will be other key priorities for the new Health Secretary.

On his first day on the job Javid was focused on the ongoing coronavirus pandemic, and firm in his position that coronavirus restrictions should not be extended past 19 July. In his first statement to the House of Commons as Health Secretary, he said: ‘There remains a big task ahead of us: to restore our freedoms, freedoms that, save for the greatest of circumstances, no government should ever wish to curtail.’ This comes despite mounting concern over the spread of the Delta variant, which is reportedly responsible for 95% of cases in the UK.

The new Health Secretary will be supporting the ongoing Covid-19 vaccine rollout to reach the 19 July date. It is planned that that two-thirds of all adults in the country would have had both doses by then.

NHS Providers have highlighted the wider impacts of the pandemic on the health service. They have said Javid must provide the sector with the ‘support it needs to clear the substantial backlog of care’. This comes as NHS waiting lists are recorded at a record high with more than 5 million patients awaiting treatment, while demands on mental health and emergency services are also rising.

Social care reform was a key 2019 Conservative manifesto commitment, but there still seem to be no concrete plans. In the recent Queen’s speech, the Government promised it would bring forward detailed reform proposals by the end of this year. These proposals will need drive and commitment from the new Health Secretary if they are going to relieve the economic and structural pressures on the sector.

Aside from social care reform, plans to restructure the NHS are already underway with the Health and Care Bill expected to be brought forward to Parliament soon. This Bill would see NHS Integrated Care Systems placed on a statutory level and divulge greater powers over to the (newly appointed) Secretary of State. In the coming weeks, Javid will also help to choose a new NHS England Chief Executive as Sir Simon Stevens will step down from this role in the summer.

Court case backlog

The backlog of court cases: impact on the legal/justice system

The COVID-19 pandemic has had a huge impact on the justice system and has created an unprecedented backlog of court cases, presenting a challenge to the courts like never before. The impacts of lockdowns and social distancing has minimised court appearances, citing safety concerns for both staff and everyone involved.

The BBC reported that towards the end of 2020, that the most serious cases have piled up to 195,000 which may not be completely addressed until 2024. The issues within the legal system is not one that has stemmed from COVID and in fact the backlog of court cases predates the pandemic but has now reached record levels. The need for Government intervention to reform the courts and the judicial system is clear to see. Many issues are created because of these problems both to the victims, defendants and wider society, however the pandemic has also revealed ways to modernise and adapt our court systems and continue to make them more accessible.

Analysing why the backlog of court cases started before the pandemic reveals various factors and issues that have led to an overstretched system. A report produced by the House of Lords Select Committee on the Constitution which focused on COVID-19 and the Courts discussed some of these longer standing failures which have resulted in this situation. These issues included the decrease in Government funding over the last decade which has fallen by 21%, the decrease in legal aid budgets which have fallen by 40% and the fact that fewer staff were being employed into the workforce by HM Courts & Tribunals Service. All of this has led to a system under intense strain, exasperated by the unprecedented effects of COVID-19, where the Government had left the justice system exposed by a lack of risk assessments and preparation for an emergency situation like this.

The Crown Prosecution Service have highlighted the level of change faced for the justice system, where court workload is 44% higher now than it was prior to the pandemic and that waiting times for crown courts have increased by 25% since last year. The concerning aspect of this situation is that justice delayed is justice denied and there is a risk that victims and witnesses will lose interest and hope in their cases if they are continuously pushed back, with an outcome to their cases unclear. The backlog of court cases also has a domino effect to the rest of the criminal justice system, it has also led to an increase of remand prisons who are kept in an uncertain position, with no access to programmers and support which they would have if they were convicted, leading to a growing group of disgruntled prisoners kept in the unsettling nature of custody.

The reaction of the court systems to try to tackle these issues in the short term, has increased an avenue which can continue to be used more in the future. The Coronavirus Act 2020 extended the use of remote hearings which have acted as a good substitute and should be considered as a widely used alternative form of serving justice in the future . This has led to many adapted procedures, such as prerecorded interviews and statements from both vulnerable witnesses and victims, which has provided them with a more comfortable and confident environment to communicate their evidence. Remote hearings also allow live streaming so that the public can see and hear them. In the longer term, this method can help to clear this backlog as it speeds up and makes court processes easier to carry out. The success of remote hearings has been presented by the Institute for Government who have stated in their performance tracker 2020, that:

‘On 23 March, 550 court or tribunal hearings used video or audio technology. Two weeks later, the figure stood at more than 3,000, accounting for around 90% of the total cases processed.’

This shows that although the backlog of cases has grown substantially, the situation would have been much worse without remote hearings. There is a need for the Government to assess both the success and failures in introduced technologies during the pandemic to improve the ability to digitise our court services and improve access to justice.

Government reaction to this, both in the short term and long term, is crucial to tackling this issue of court case backlogs and the underfunding of the judiciary system. In terms of an immediate response, the Government has focused on investing more money into the courts, opening temporary courtrooms to increase the accessibility/availability of environments for trials to take place. However, this is a not a long-term solution nor is it at the rate needed to sufficiently tackle this backlog.

The recent Queen’s Speech revealed details around the Government’s plan in reforming areas of the legal system, with many measures welcomed, albeit overdue. Within the Queen’s Speech, the Government spoke about modernising court processes through documentation being transferred to more electronic means and more procedures being completed online, such as stating pleas. The Government’s focus is ensuring legislation as ensures the timely administration of justice. The Government has focused funding towards the roll out of new technology – though virtual and remote hearings, hiring more staff and adding up to 60 nightingale courtrooms, totaling investment of over £250mn. In reference to victims losing trust in the courts system as they have continuously seen their cases pushed back, the Government also committed to increased funding for victim support services this year, totaling to £151mn and an additional £5mn for Witness Care Units, to support witnesses/victims through these court processes.

Overall, the Government is investing over £1 billion to transform the courts and tribunals system and a further £142 million in COVID-19 funding to support court recovery and upgrades necessary to tackle these growing issues. Although an assessment on the successes of Government intervention can only be made after an extensive period, we have already seen some stabilisation of the court backlog, where the rise of the backlog has stalled, acting as a good indication that the Governments interventions are having an immediate effect.

G7 overview

Overview of the G7

The G7 communique, published at the end of the summit last Sunday, sets out six areas of global action: 1) End the pandemic and prepare for the future, 2) Reinvigorate our economies, 3) Secure our future prosperity, 4) Protect our planet, 5) Strengthen our partnerships and 6) Embrace our values.

Among these goals, there are ambitions to help developing countries recover from the pandemic and ‘build back better’ for the future. Despite the ambitious pledges, there are still concerns from the international development sector on the level of commitment shown by the G7 leaders, particularly the UK which is the only G7 country to have reduced its foreign aid budget in light of the economic cost of the pandemic.

Covid-19 vaccine distribution
Ahead of the summit, G7 leaders committed to providing 1bn Covid-19 vaccines over the next year, including 100m surplus coronavirus vaccinations from the UK. The UK has committed to delivering 5m doses by the end of September, beginning in the coming weeks, primarily for use in the world’s poorest countries. Of the 100m doses, the UK will donate 5m doses by the end of September, beginning in the coming weeks, primarily for use in the world’s poorest countries. 25m more will be donated by the end of 2021. 80% of the 100m doses will go to COVAX and the remainder will be shared bilaterally with countries in need. At the end of the summit, the communique totaled the final commitments at 870m, just short of the 1bn planned.

UNICEF has welcomed the commitment from the G7 to rollout vaccines, emphasising that without a global vaccination programme, the world will be more at risk of variants that could threaten the vaccinated and unvaccinated. They also call for an accelerated timetable in light of several forecasts which suggest that G7 countries will have enough vaccine supplies to donate 1 billion doses by as early as the end of 2021, rather than the 2022 goal proposed.

Moreover, despite the large numbers of vaccines promised, it is not clear that they will go far enough. In a critique, former Prime Minister Gordon Brown argued that 11bn vaccine doses are needed to guarantee all countries the same levels of anti-Covid protection as the west. He said: ‘The gift of 1bn doses from the richest countries to the poorest is headline-grabbing and welcome. But it falls billions of doses short of a solution and does not answer what Johnson called “the greatest challenge of the postwar era”.’

Alongside the communique, the G7 set out frameworks to strengthen its collective defences against threats to global health. This includes the ‘Carbis Bay Declaration’ which promises to reduce the time taken to develop and licence vaccines, reinforce global surveillance networks, and reform and strengthen the World Health Organisation.

Girls’ education has been a primary objective for UK foreign policy in recent years so it was no surprise that this was a focal point for the UK, particularly with the Global Partnership for Education (GPE) coming up next month. The UK pledged £430 million to the GPE to get the world’s most vulnerable children, particularly girls, into school. This funding pledge is on top of the £400m of UK aid which will be spent this year on bilateral efforts to increase girls’ access to education.

At the session, G7 leaders discussed also how to build back better from the coronavirus pandemic in a way that creates opportunities for everyone. Leaders reaffirmed their commitment to targets set at the G7 Foreign Ministers’ meeting in May to get 40 million more girls into school and 20 million more girls reading by the age of 10 in the next five years.

Plan International has welcomed the funding commitments from the G7 and the action plan to address the ‘devastating impact’ of the pandemic on girl’s education. However, it argues that the G7 funding commitments to GPE, totaling $2.75 bn will not be enough. GPE hopes to raise $5bn from donors, including $3.5bn from the G7.

Meanwhile, ActionAid has highlighted that the new funding pledge for girl’s education comes at the same time as the Government is cutting its aid budget on girls’ education by 40%. They argue that advancing girl’s education should form part of a wider Government response to gender equality, including by tackling violence against women and girls.

Climate change
Under the Prime Minister’s plans to Build Back Better for the World he laid forward a new approach intended to give developing countries access to more, better and faster finance while accelerating the global shift to renewable energy and sustainable technology. It includes a £500m Blue Planet Fund to protect the ocean and marine biodiversity and a Nature Compact to reverse biodiversity loss by 2030. WWF has welcomed these announcements but has called for pledges to be converted into concrete policy goals and implemented at pace to reach the targets of the Sustainable Development Goals by 2030. This will be vital ‘to abate the induced catastrophes the world is increasingly experiencing and will continue to unless we urgently transform our broken relationship with the natural environment.’

Alongside this UK, Germany and USA announced new action to scale up protection for the world’s most vulnerable communities against the impacts of climate change. The £120m new funding from the UK and £125m new funding from Germany will enable quicker responses for vulnerable people when extreme weather and climate-linked disasters hit. This will protect those most at risk in Africa, South East Asia, the Caribbean, and the Pacific and help reduce losses and damage to communities, infrastructure and livelihoods caused by climate change.

Finally, the G7 Development Finance Institutions (DFIs) and multilateral partners also pledged to invest over $80 billion in the private sector in Africa over the next 5 years. The investments will support the long-term development objectives of African economies, including those which have been negatively hit by the COVID-19 pandemic. With investments focused on renewable power, infrastructure, manufacturing, agriculture, and technology sectors it is aimed that they will provide clean, reliable power to millions of people, help create jobs and reduce poverty.

Investment in education

Reactions to the resignation of the Education Recovery Commissioner

The Education Recovery Commissioner Sir Kevan Collins’ letter of resignation followed the Government’s announcement that it was offering a further £1.5bn in education catch up support for young people, around 10% of what he had suggested was needed.

Sir Collin was direct about the impact of this gap between the two figures, stating: ‘I do not believe it is credible that a successful recovery can be achieved with a programme of support of this size’. He also said he believed ‘the settlement provided will define the international standing of England’s education system for years to come’.

This link to international standards in education was picked up by Labour leader Keir Starmer at last week’s Prime Minister’s Questions. Starmer pointed out the funding, equivalent to £310 per child over the next four years, paled in comparison to the US’s catch up plan worth over £1,600 per child and £2,500 in the Netherlands. He quoted Sir Kevan Collins describing the catch up as ‘too small, too narrow and too slow’.

Labour responded to the announcements with an opposition day debate on investing in children and young people, which Shadow Education Secretary Kate Green commented that the amount of catch up funding offered is inexplicable given the Prime Minister’s claim that children’s education is his priority. The Secretary of State for Education Gavin Williamson did not attend the debate and it was instead taken by the Secretary of State for School Standards Nick Gibb. The entire House voted to issue a motion of regret of the resignation of the education recovery commissioner and:

‘…agrees with Sir Kevan’s assessment that the current half-hearted approach risks failing hundreds of thousands of young people; and therefore calls on the Government to bring forward a more ambitious plan before the onset of the school summer holiday which includes an uplift to the pupil premium and increased investment in targeted support, makes additional funding available to schools for extracurricular clubs and activities to boost children’s wellbeing, and provides free school meals to all eligible children throughout the summer holiday.’

The Government has expressed that what has been announced is only part of the full catch up plan, of which more is to be revealed at the Spending Review. This is despite previous commitments to have Sir Collins’ recommendations delivered outside of that process, and a catch-up programme in place by September 2021. As Green rightly pointed out, Johnson has repeatedly said that education and the future of young people is a priority and key element of the coronavirus response. This makes the comparably low funding which caused the Commissioner to seems strange and out of touch with the Government’s skills drive, particularly given the lack of support for 16-19 education within the support programme. Pundits have wagered the Treasury ‘took a carving knife’ to more substantial plans set out by Secretary of State Gavin Williamson, leading calls for his resignation. Researchers at the IFS, however, commented that the decision may have been taken out of fears of the benefits of extra tuition and education support leading to a permanent increase in spending.

During a media round following the resignation news, vaccines minister Nadhim Zahawi recentred teachers’ unions as detrimental to education catch up, mentioning their opposition to extending the school day. Angela Rayner hit back, stating Tory Minister’s ‘always try to attack unions to distract from their own failures’.

Although the investment in education recovery so far totals over £3bn, as Sir Collins said, reducing spend in education at this point is a false economy. Further, the Institute for Fiscal Studies noted that if the losses to learning over the last year are not addressed ‘costs could easily run into hundreds of billions as a result of lost skills and productivity’. The sector will eagerly await the next announcements at the Spending Review, although it seems unlikely that it will meet the former Recovery Commissioner’s recommendations amongst a package of spending. The question left after that is whether Sir Collins was right in his estimations of what failing to make up for the learning loss of the pandemic will mean.

Sector responses:
• Labour Shadow Education Secretary said:
‘Kevan Collins’ resignation is a damning indictment of the Conservatives’ education catch-up plan.
He was brought in by Boris Johnson because of his experience and expertise in education, but the Government have thrown out his ideas as soon as it came to stumping up the money needed to deliver them.’

• Liberal Democrat Spokesperson for Education Daisy Cooper said:
‘Sir Kevan was a good appointment and many of us were cheering him on. The Government’s pitiful offer of a £1.4bn to support a generation of young people who have lost months of learning was an insult to him and to our young people.

Our children deserve better than this useless Education Secretary. Time and time again he keeps getting it wrong. It really is the last straw – the Education Secretary has to go.’

• Director of Education & Skills at Nacro Lisa Capper commented:
‘We must see more focus on closing the clear and significant attainment gap among 16-19-year-olds, an often-overlooked group. It is also vital that no matter where you learn, all 16-19 year olds see the benefit of this funding, including those who learn with charitable and independent providers. These students are often those most in need of support to catch up, and who benefit from the wrap around support these centres provide.’

• Sutton Trust Executive Chair and Education Endowment Foundation Chairman Sir Peter Lampl said:
‘Creating an ambitious, sustainable recovery plan to support every pupil is a considerable challenge. The extension of tutoring for the most disadvantaged young people is crucial as it’s a highly cost-effective method of making up for lost learning. The focus on quality teaching, investing in the teaching profession and early years practitioners is also much needed.

‘However, the proposed funding is only a fraction of what is required. Low-income students who have already been most heavily impacted by Covid-19 will be disadvantaged even more and overall standards, which have fallen dramatically, will be very slow to recover.

‘Sir Kevan Collins is right that much more will be needed if we are to mitigate the long-term impact of the pandemic.’

• National Association of Head Teachers General Secretary Paul Whiteman said:
‘Today’s statement confirms the disappointing scope and scale of the government’s ambition for children and young people. The government has missed an opportunity to make a real difference to the lives of young people in the short term, and ignored the necessity of putting down some firm recovery foundations for the long term. By every measure, this is a low-cost option when what pupils deserved was something first class.’

• Education Policy Institute
The EPI found that the new education recovery package of £1.4bn amounts to around £50 extra per pupil per year – a fraction of the level of funding required to reverse learning loss seen by pupils since March 2020. They commented the Government ‘decided not to take the opportunity’ to offer evidence-based interventions to protect against long-run negative impacts to education and wellbeing.

• Association of Colleges Chief Executive David Hughes said:
‘The plans for the next steps of the recovery plan will disappoint colleges and students with the least amount of time left in education. The extension of the tuition funding is good news but the failure to fund additional teaching hours or to extend the pupil premium to age 18 means that many disadvantaged students may fall through the gaps.’

Global Tax Reform

Global tax reform

The G7 has agreed to back a historic two pillar international agreement on global tax reform that will mean the largest multinational tech giants will pay their fair share of tax in the countries in which they operate – and not just where they have their headquarters. As part of this landmark deal, Finance Ministers also agree to the principle of a global minimum rate that ensures multinationals pay tax of at least 15% in each country they operate.

The plan is based on two ‘pillars’ that have long been under discussion by the OECD, Group of 20 (G20) countries and their so-called Inclusive Framework. Under pillar one, countries would get a new right of taxation over a share of profits generated in their jurisdiction by an overseas-headquartered multinational. This would mean taxing the source of a company’s revenue regardless of the firm’s physical location. This would crack down on profit-shifting to low-tax jurisdictions. The rules would apply to global firms with at least a 10% profit margin – and would see 20% of any profit above the 10% margin reallocated and then subjected to tax in the countries they operate.

Under Pillar Two, the G7 also agreed to the principle of at least 15% global minimum corporation tax operated on a country by country basis. This is lower than a 21% proposal put forward by the US president, Joe Biden, earlier this year and lower than what the Labour party has been calling for. However, it is still regarded as a turning point, and the inclusion of “at least” in the G7 deal means it could be negotiated higher.

Which companies would it apply to?
The burden is likely to fall primarily on technology and pharmaceutical firms that have been able to place their business locations and intangible intellectual property in low- or no-tax locations and book their revenues in those jurisdictions. The details about which firms would be affected have yet to be worked out. The Biden administration has proposed that about 100-150 multinationals would be within the scope of pillar one. At any rate, the digital profits tax would apply only to firms making profit margins of over 10%–meaning many firms with low margins, including possibly Amazon – would remain exempt (its profit margin in 2020 was only 6.3%).

Moreover, the Chancellor Rishi Sunak is reportedly pushing for the City of London to be carved out of the G7’s plans for a global tax agreement. The Financial Times quotes an official close to the discussions as saying that the UK was one of several countries pushing for ‘an exemption on financial services’.

How much would it raise?
The OECD estimated last October that as much as $81bn (£57bn) in additional tax revenues each year would be raised under the reforms. Pillar one would bring in between $5bn and $12bn, while pillar two, the global minimum rate, would collect between $42bn and $70bn. However, this assumed that a global minimum rate of 12.5% would be applied under pillar two. It also captures a larger number of multinationals under pillar one. The Tax Justice Network advocacy group estimates that a 21% minimum rate would bring in $640bn in underpaid tax each year.

There are various estimates for how much individual countries would recover. According to the Institute for Public Policy Research thinktank’s Centre for Economic Justice, the UK would reap an extra £14.7bn annually from a 21% global minimum rate. IPPR reported that a global minimum corporation tax rate of at least 15% could raise £7.9bn for the UK, but warned this rate would not be enough to end the race to the bottom on tax. The Labour party said that the lower rate of 15% would let big multinational firms off £131m per week which could be used to fund the NHS and other public services instead.

What next?
The topic will be discussed at OECD group meetings in Paris on 30 June – 1 July 1st, and then again when G20 Finance Ministers and Central Governors meet in Venice on 9 – 10 July.

However, global corporate tax reform will prove difficult to implement. In the EU the plans will require a directive, subject to veto by the low-tax economies such as Ireland or Hungary, and passage of associated changes by national parliaments. Ireland’s finance minister Paschal Donohoe tweeted: ‘I look forward now to engaging in the discussions at @OECD. There are 139 countries at the table, and any agreement will have to meet the needs of small and large countries, developed and developing’. The battle for low-tax countries is likely to be about building support for a lower minimum rate (closer to Ireland ‘s current rate of 12.5%) or seeking certain exemptions.

Political prospects are difficult in the US too. Biden team could probably push through the global reform in the evenly divided Senate under so-called ‘reconciliation’, which requires a simple majority, if they can do so before the November 2022 mid-term elections or do not lose seats in that electoral contest.

Cabinet office

Cabinet reshuffle speculation

This is a post from Daniel Loman and Jennifer Prescott. 

Despite Number 10 saying there is no reshuffle planned speculation continues to mount as to what changes the Prime Minister may decide to make to his Cabinet. And if as Number 10 said in late May there are no plans for a reshuffle it does not mean one cannot happen in the weeks or months to come or events cannot transpire that forces the hand of the Prime Minister. Here are our thoughts based on reports and the Government’s direction and policy priorities of where each member of the current Cabinet stands.

Chancellor of the Exchequer, Rishi Sunak: Despite Sunak’s stock not being as high as it was this time last year it would be very shocking to seem him depart the Treasury. For the moment he seems to have been unharmed from the Greensill lobbying row. Sunak was also probably received the most praise during Dominic Cumming’s mammoth committee appearance, but in the eyes of the Prime Minister that could be a negative.

Secretary of State for Foreign, Commonwealth and Development Affairs; First Secretary of State, Dominic Raab: Dominic Raab has managed to stay out of any Covid related scandals and when Johnson was in hospital he acted as deputy PM. Dominic Cummings said the Foreign Secretary did not get ‘enough credit as he should have done’. Similar to Sunak, praise from Cummings could do more to harm Raab than help him.

Home Secretary, Priti Patel: Towards the end of last year it seemed inevitable that Patel would be moved from the Home Office. However despite the finding that she had broken the ministerial code of conduct Patel now seems to be on more steady ground. Patel also seems quite central to the Government’s priorities and the Prime Minister would probably have some people scratching their head if he moved on from Patel now considering he has backed her throughout everything that has already been.

Minister for the Cabinet Office, Chancellor of the Duchy of Lancaster, Michael Gove: There has been speculation that Gove could take over as Health Secretary, with sources claiming he is a consensual figure within the Cabinet, as well as one of the most experienced. Dominic Cummings spoke favourably of him, insisting that he was not responsible for the failings of the Cabinet Office. However, recent reports that he acted unlawfully by awarding a Government contract without tender process may jeopardise his promotion.

Lord Chancellor and Secretary of State for Justice, Robert Buckland QC: Publicly there has been little to suggest the Prime Minister would have a reason to move on from Buckland. The impact of Covid on prisons hasn’t really been a headline issue and neither has the court backlog. Buckland has spent more time in his job than the four people who held it before and he is probably good value to continue, he is also the first QC to have the job since Ken Clark (2010-2012).

Secretary of State for Defence, Ben Wallace: Another Minister who is probably safe, the Prime Minister will likely want someone with some experience after the announcements made in the Integrated Review earlier this year.

Secretary of State for Health and Social Care, Matt Hancock: Dominic Cummings has claimed that Hancock should have been fired for ‘15, 20 things’ so surely, he will be moving on from the Department of Health and Social Care. It seems most commentators (including us) think Hancock will be moved on. However it is worth considering that Number 10 will probably be eager to avoid validating Cumming’s concerns. The Prime Minister may also take the view that he wants Covid as far back in the rear-view mirror as possible before changing Health Secretary and that may be a little further down the line.

COP26 President, Alok Sharma: Sharma is thought to be safe in his role, especially as it could be disruptive to switch ministers just months ahead of COP26 in Glasgow.

Secretary of State for Business, Energy and Industrial Strategy, Kwasi Kwarteng: Having only being in role since the beginning of the year, it seems unlikely that Johnson would choose to move Kwarteng, who is seen as a passionate champion of the PM’s plans for a green industrial revolution.

Secretary of State for International Trade and President of the Board of Trade, Minister for Women and Equalities, Elizabeth Truss: There are rumours that Liz Truss could be in line for a promotion to the role of Foreign Secretary. She has consistently been ranked as one of the most popular figures of the Cabinet amongst Conservative members and her performance as Trade Secretary has impressed many.

Secretary of State for Work and Pensions, Dr Thérèse Coffey: The Work and Pensions Secretary sent a tweet to footballer Marcus Rashford questioning his comments about low income families just hours before the PM performed a U-turn over the provision of free school meals vouchers, which was seen as an embarrassment for Downing Street.

Secretary of State for Education, Gavin Williamson: Williamson is perhaps the Minister who is the surest thing to either be sacked or reshuffled. The resignation of Sir Kevan Collins and the constant criticism for a lack of support for pupils during the pandemic are things Williamson is having put at his door and this doesn’t even speak on what went on around free school meals.

Secretary of State for Environment, Food and Rural Affairs, George Eustice: Eustice has been a very vocal opponent of tariff-free meat imports from Australia, positioning himself against Liz Truss and the PM. This could be a reason for Johnson to remove him. It is reported that Eustice and Truss have rowed over the deal, which Eustice believes is a bad for British farmers. Another reason he could possibly lose his role is that he is not fully on board with the green agenda the Government is pushing. There is talk that chief whip Mark Spencer could take over as Environment Secretary.

Secretary of State for Housing, Communities and Local Government, Robert Jenrick: Jenrick is a strong ally of Rishi Sunak’s and seems to be well liked by the PM, however, it is uncertain whether this would be enough to save him in a reshuffle after his role in the ‘cash-for-favours’ housing bid scandal.

Secretary of State for Transport, Grant Shapps: Shapps is perceived to have done a decent job as Transport Secretary and has become one of the Government’s more reliable communicators. He managed to secure a deal with France to open the border back after the Covid variant scare in December and despite being in Spain last summer when his Department changed the quarantine rules, he has largely managed to avoid any negative attention.

Secretary of State for Northern Ireland, Brandon Lewis: Lewis has kept a relatively low profile, apart from when he made the news after stating in the Commons that the Government would go against international law as part of a new Brexit proposal for trade across Northern Ireland’s borders.

Secretary of State for Scotland, Alister Jack:  Jack will probably stay in post as presuming the Prime Minister would only accept an MP from a Scottish constituency there are only five alternatives. Douglas Ross is also the leader of the Scottish Conservatives and an MSP, so he is surely of the running, David Mundell was sacked as soon as Boris Johnson became PM. That leaves only John Lamont, David Duguid and Andrew Bowie as possible candidates so Alister Jack is probably safe.

Secretary of State for Wales, Simon Hart: Simon Hart seems to be doing a good job of selling the Government’s Levelling Up agenda in Wales. There is no obvious reason the PM would want somebody else to take over the role.

Leader of the House of Lords, Baroness Evans of Bowes Park: Baroness Evans has been Leader of the House of Lords since Theresa May’s first Cabinet. There would be no apparent reason to move Evans so unless the Prime Minister just feels like a change, she should be safe.

Secretary of State for Digital, Culture, Media and Sport, Oliver Dowden: Dowden finds himself in a situation not too dissimilar to Robert Buckland, Covid has had a big impact on the area he oversees, but with the exception of Andrew Lloyd Webber’s defiance none of it has really been headline news.

Minister of State, Lord Frost: Frost has been in the news a lot recently as he has been angering EU diplomats over his approach to the Northern Ireland Protocol, so much so that the EU has reportedly been urging Boris Johnson to remove Frost from his Cabinet role.

Minister without Portfolio (Co-Chair of the Conservative Party), Amanda Milling: There is no real reason to think Milling will be moved, however the position she occupies lends itself to the possibility of her being moved.

Chief Secretary to the Treasury, Steve Barclay: Barclay stands as a figure who is probably unlikely to see himself drop out of the Cabinet, he might be an outsider for a position of Secretary of State if Johnson finds himself with one too many positions to fill.

Lord President of the Council, Leader of the House of Commons, Mr Jacob Rees-Mogg: Rees-Mogg is a controversial figure as one of the Conservative Party’s highest profile Brexiteers and a key member of the European Research Group. His latest gaffe was his attack on a journalist under cover of parliamentary privilege. A reshuffle could be a chance for the PM to get rid, however, not having Rees-Mogg on his side could be even more troublesome.

Chief Whip, Mark Spencer: Spencer is being touted for the top job at DEFRA if Eustice departs, if this happens there has been some rumblings that Gavin Williamson could go back to being Chief Whip.

Attorney General, Michael Ellis QC: Ellis is currently filling in for Suella Braverman QC who is on maternity leave, so it is unlikely to expect any change here.

Weekly Economy Summary

COVID-19: Weekly Economy Summary – 13 May

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


UK gross domestic product (GDP) is estimated to have grown by 2.1% in March 2021, the fastest monthly growth since August 2020, as schools in some parts of the UK reopened throughout the month. March’s GDP is 5.9% below the levels seen in February 2020, and 1.1% below the initial recovery peak in October 2020. Latest estimates also show only small revisions to GDP in January (now negative 2.5%, from negative 2.2%) and February (now growth of 0.7%, from 0.4%). 

Economic outlook 

NIESR central forecast for UK economic growth in 2021 has been revised up to 5.7%, compared to 3.4% in February, with 4.5% growth forecast for 2022. The significant upward revision reflects a better-than-expected first quarter – a greater resilience to further lockdowns – and the large rise in Covid-related public spending in the 2021-22 fiscal year announced in the March Budget.   

The poor Covid-19 performance has greater permanent cost for the UK compared with other major economies. The size of the economic contraction means that the level of GDP is nearly 4% lower in 2025 than NIESR had forecast it to be before the Covid-19 pandemic, equivalent to around £1,350 per person per year (2018 prices) falling further behind the US and Germany as a result. 

Thanks to the extension of furlough and other support measures to the autumn, NIESR now forecast unemployment to peak at 6.5% in the final quarter of this year (compared to 7.5% in February). This central forecast is compatible with an assumption that around 450,000 of those remaining on furlough in September will not be taken back after the scheme ends. 

Income growth and a degree of forced savings under lockdown provide a strong basis for a consumption growth forecast of 5.9% in 2021. NIESR forecast household saving then to fall to a level higher than that seen before the pandemic but close to historical averages: a faster or further fall constitutes the principal upside risk to our consumption and GDP forecasts in 2021. 

NIESR’s central forecast is for CPI inflation to rise over the coming months, reaching 1.8% in the final quarter of 2021 before falling to 1.5% at the end of 2022 and settling just below its 2% target between 2023 and 2025. Bank Rate is not forecast to rise until 2023 but there is considerable uncertainty regarding both the direction and instruments of monetary policy.   

Double jobs and mental health crisis facing young people risks outlasting the pandemic 

Young people have experienced the largest employment hit and sharpest increase in mental health conditions of any age group during Covid-19 in a ‘double crisis’ that risks outlasting the pandemic, according to a report by the Resolution Foundation. The report, Double Trouble, examines the worrying trends in young people’s mental health in the run-up to and during the crisis, their links to changes in the labour market, and the risks posed to young people’s post-pandemic living standards. The think tank recommends that the government intensifies efforts to keep young people in work by expanding and extending the Kickstart Scheme, and ensures that access to mental health support is strengthened in the period after pandemic.  

Business confidence 

The success of the UK’s vaccine rollout has also influenced an increase in service sector confidence, which has risen to its highest level in over a year. BDO’s latest services optimism index shows that confidence among businesses in the service sector hit a fourteen-month high in April. Businesses in other sectors also recorded improved optimism, while BDO’s output index showed a month-on-month increase in debit and credit card spending in line with the reopening of non-essential retail last month. 

Weekly Health Summary

Covid-19: Weekly Health Summary – 13 May

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

Covid-19 spread 

On Monday the UK COVID-19 alert level moved from level 4 to level 3 in reflection of Covid-19 case numbers, deaths and hospital pressures have fallen consistently. In a joint statement, the UK Chief Medical Officers warned that despite the drop in level, Covid-19 is still circulating and ‘we all need to continue to be vigilant.  

This comes as findings from the Imperial College London and Ipsos MORI show infections have halved since the last REACT-1 study in March, with only 1 in 1,000 people infected. The main findings from the eleventh round of the REACT study show that between March and May national prevalence has dropped by 50% from 0.20% to 0.10% The data showed that the vaccination rollout continues to impact positively on prevalence. The study found a divergence between the prevalence of infections and hospitalisations and deaths, suggesting infections may have led to fewer hospitalisations and deaths since the start of the vaccination rollout.  

Care backlog 

NHS England has announced a new £160 million accelerator initiative to tackle waiting lists, by increasing the number of tests and treatments and by developing a blueprint for elective recovery. This comes as waiting list figures published this week show that there are currently 5 million patients are waiting to start elective treatment.  

NHS Providers has called the new initiative is important, Chief Executive Chris Hopson. He said: ‘Trust leaders are telling us that, in the places with the biggest challenge, getting through the backlog could, on current trajectories, take between three to five years. We know this is unacceptable and that the NHS needs to develop a bold, radical, plan to go a lot faster, with appropriate extra funding from the government.’ 

Nuffield Trust’s Deputy Director of Research Dr Sarah Scobie has said: ‘It is now very clear that the NHS will need much greater support from the government to aid the service and exhausted staff to work through a frightening level of postponed care…New funding announced by NHS England to support pilot areas to innovate and identify ways to speed up efforts to tackle the backlog of care is welcome. But additional staff and resources will not be easy to find given the NHS will need to prioritise urgent care, remain responsive to hospitalisations for Covid and continue to roll out the vaccination programme across the population.’ 

Mental health 

On Monday the Government announced £17 million for mental health funding in schools and colleges to help them recover from the challenges of the pandemic. Up to 7,800 schools and colleges in England will be offered funding worth £9.5 million to train a senior mental health lead from their staff in the next academic year, part of the Government’s commitment to offering this training to all state schools and colleges by 2025. Funding also includes a new £7 million Wellbeing for Education Recovery programme, which provides free expert training, support and resources for staff dealing with children and young people experiencing additional pressures from the last year – including trauma, anxiety, or grief. 

Announcing the new funding, Minister for Mental Health, Nadine Dorries, said: ‘It is essential that children and young people can access the support they need and this extra funding further cements our commitment to their wellbeing, equipping them with the tools to look after their mental health’. 

Research from the Centre for Mental Health published this week found that 10 million people, including 1.5 million children and young people, in England will need support for their mental health as a direct result of the pandemic over the next three to five years. Based on an analysis of over 200 high-quality studies from around the world, the report identifies key groups of people who face an especially high risk of poor mental health as a result of the pandemic. These groups include people who have survived severe Covid-19 illness (especially those treated in intensive care), those working in health and care services during the pandemic, people economically impacted by the pandemic, and those who have been bereaved.

Weekly Health Summary

Covid-19: Weekly Health Summary – 6 May

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

Vaccine rollout  

The Covid-19 vaccine rollout reached 50 million administered doses this week. More than 34 million people have had at least one jab while 15 million have had both doses of the vaccine. Data from Public Health England (PHE)’s real-world study shows the vaccines are already having a significant impact in the UK, reducing hospitalisations and saving more than 10,000 lives in England alone by the end of March. The Government remains on track to offer a jab to all adults by the end of July. Vaccines Minister Nadhim Zahawi said: ‘The UK’s vaccination programme has been a huge success so far with more than 50 million doses administered – a fantastic achievement. We have one of the highest uptake rates in the world and over 15 million people have now received 2 doses and maximum protection from this dreadful virus.’ NHS Providers have said that the 50 million figure is a ‘remarkable achievement’, but have urged everyone to carry on following social contact rules as ‘we still have a long way to go before we reach our next big milestone of offering all adults their first jab by the end of July.’ 

The Government has announced a new testing centre to fast-track Covid-19 variant vaccines. The Government will invest £29.3 million through the Vaccines Taskforce in Public Health England’s new testing facilities at Porton Down, to assess the effectiveness of existing and new vaccines against variants of concern. Health Secretary Matt Hancock has said that the labs will help ‘future-proof country from the threat of new variants’.  

Female health and care staff 

NHS Confederation has published a survey which shows that the physical and mental wellbeing of female health and care staff in England significantly worsened as a result of working through the COVID-19 pandemic with a marked deterioration since last summer. The poll was carried out by the NHS Confederation’s Health and Care Women Leaders Network in February and March in the aftermath of the deadly peak of the virus in January. It found that more than 80 percent of female respondents who completed the new survey – including nurses, doctors, managers, admin staff, and allied health professionals – reported their job had a greater negative impact than usual on their emotional wellbeing as a result of the pandemic, up from 72 percent last summer. The results also showed 65 percent reported a negative impact on their physical health – a 13-percentage-point jump from the last survey. 

Rebecca Smith, managing director of NHS Employers, which is part of the NHS Confederation, said: ‘These findings again highlight the burdens faced by the female health and care workforce as a result of working through the COVID-19 crisis… We now need additional investment from Government, coupled with the existing and ongoing direct support by health and care organisations, to make sure the female workforce is properly looked after. As we come out of this crisis we must continue to do all we can to protect and support our staff.’ 

Mental health  

Data from the Office for National Statistics (ONS) found 1 in 5 adults experienced some form of depression in early 2021, between January and March. This is an increase since November 2020 and more than double that observed before the coronavirus pandemic. Younger adults and disabled adults were more likely to experience some depression, whilst women aged 16-29 were more likely to experience depressive symptoms than men of the same age. Mind, the mental health charity, has said: ‘We cannot underestimate the impact that the pandemic has had on the nation’s mental health – whether that’s bereavement, the devastating loss of life, the impact of lockdown, or the impact of the latest economic recession which may have affected our jobs and livelihoods.’ 

Weekly Economy Summary

COVID-19: Weekly Economy Summary – 6 May

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

Older workers during the coronavirus (COVID-19) pandemic 

While the impact of the coronavirus (COVID-19) pandemic has been greatest for younger workers, recent ONS statistics showed that older workers aged 50 years and over have been affected to a greater extent than those in the middle age groups. From December 2020 to February 2021, those employees aged 50 years and over were more likely to report working fewer hours than usual (including none) in the past week because of the coronavirus than those aged under 50 years, with those aged 65 years and over the most likely to say they had worked reduced hours. Among older employees working reduced hours, the 65 years and overs were the most likely to receive no pay and the least likely to receive full pay. 

Over a quarter of furloughed employments are people aged 50 years and over (1.3 million),  with 3 in 10 of older workers on furlough thinking there is a 50% chance or higher that they will lose their job when the scheme ends. Moreover, older people who become unemployed are more likely to be at risk of long-term unemployment than younger people. In December 2020 to February 2021, 29.9% of unemployed 50 years and overs were long-term unemployed compared with 18.9% of those aged under 50 years (seasonally adjusted). Previous research has shown that the more time spent out of work, the less likely someone is to return to employment, and the likelihood of returning to work decreases with age. 

UK’s rising debts ‘can be coped with’ 

The Institute of Economic Affairs (IEA) has said no emergency measures are needed to pay off the UK’s £2 trillion debt, with the think tank advising Treasury officials to focus on controlling spending and introducing measures to boost growth. In a report published on Monday, the IEA said debt incurred during the coronavirus pandemic “can be coped with” and argued against trying to reduce it too quickly. Inflation is a real danger, but an “honest government” can work to protect against this eventuality. The authors of the report state: “Clearly steps should be taken by government to curb spending and behave extra prudently. Our central point is that large-scale debt is far from unknown in our economic experience. And it would be misguided and futile to jump to tax-raising measures. The debt can be coped with and the best way of doing that is to encourage economic growth.”  

Economy and society indicators  

The Office for National Statistics (ONS) has published research on the impact of the coronavirus (COVID-19) on the UK economy and society between April and May. It showed that the percentage of businesses currently trading has increased from 77% in early April to 83% in late April 2021. This is now at a similar level to that seen in mid-December 2020 (Business Insights and Conditions Survey (BICS)).  

For retail footfall, it found in the week to 1 May 2021, UK retail footfall saw a slight weekly decrease of 2% but remained much stronger than the levels seen earlier in the year, and at 74% of its level in the equivalent week of 2019. The recent rise in retail footfall is in line with the easing of lockdown restrictions in England on 12 April 2021, which allowed non-essential shops across the country’s high streets and shopping centres to reopen.   

The number of people traveling to work has also increased. The proportion of working adults that had traveled to work in the last seven days was 60%. This proportion has been gradually increasing since mid-February (44% in the period 10 to 14 February 2021). 

Another ONS release on the coronavirus pandemic UK businesses and the economy, has found the proportion of businesses’ workforce on furlough leave has fallen from 17% in late March 2021 to 13% in mid-April 2021, as a result of coronavirus restrictions continuing to be relaxed across the UK. The wholesale and retail trade industry expects the highest percentage of its workforce to return from furlough to the normal workplace in the next two weeks, at 29%. 

It also found that the main challenge reported by currently trading businesses for exporting and importing continues to be additional paperwork, at 37% and 42% respectively. The larger business reported more exporting challenges, while smaller businesses had more importing challenges. 

Interest rates 

The Bank of England (BoE) will set interest rates today amid the backdrop of an economic recovery as the country slowly emerges from lockdown. Reuters predicts that the BoE will say Britain’s economy is heading for a much stronger recovery this year than it previously expected and it might start to slow its pandemic emergency support. The BoE forecast in February that the world’s fifth-biggest economy would grow by 5% in 2021, having slumped by 10% in 2020. That was a bigger hit than in most other European economies after Prime Minister Boris Johnson was slower to impose a coronavirus lockdown and had to keep it in place for longer in an economy heavily reliant on face-to-face consumer services. But many economists say Britain is now set to grow by more than 7% this year, boosted by its fast COVID-19 vaccinations.

Weekly Economy Summary

COVID-19: Weekly Economy Summary – 29 April

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

Economic outlook 

Independent, business-led coalition which aims to provide ‘new ideas to ensure that the UK emerges from the pandemic a stronger and fairer economy’ published its final findings. The report, ‘Ambition 2030’: A Partnership for Growth, argues that the pandemic has had a bigger impact on the UK economy than any event in the last 300 years, and sets out policy recommendations including the creation of at least one new globally competitive industry cluster in every part of the UK by 2030, a commitment to develop a Great British Supply Chain, a ‘Help to Train’ scheme to assist in halving the projected skills gap by 2030, a detailed plan for the decarbonisation of homes over the next fifteen years and the creation of a new Community Infrastructure Endowment Fund to match-fund business investment in communities and the introduction of a Wellbeing at Work Guarantee. 

Despite this hit, the UK economy is expected to grow even faster than that of the United States this year due to the vaccine programme delivering the speediest recovery since the Second World War, according to a forecast from Goldman Sachs. The forecast says British GDP is predicted to grow by 7.8% this year, while the US will see only a 7.2% growth. Meanwhile, economists at Consensus Economics expect the UK economy to grow by 5.4% this year, compared to the 4.2% expected in February. 

Similarly, the Bank of England’s deputy governor Ben Broadbent has said that the UK’s economy will see “very rapid growth” over the next couple of quarters, driven by an increase in consumer spending after lockdown. According to the BoE’s forecasts, people will spend about 5.0% of their Covid-19 savings, though Broadbent added that it was “possible” they would spend more. “The burden of proof it seems to me should be as to why that wouldn’t happen, rather than why it would, so I have tended to be on that more optimistic side,” Broadbent said. 

Despite increasing optimism over the UK’s recovery from the pandemic due to the pace of the vaccination programme, the Bank’s policymakers have been divided over the UK’s prospects for a long-term recovery. But Broadbent joins Andy Haldane, the BoE’s chief economist, in the optimistic camp, though he warned that a “roaring twenties” style recovery was far from assured. 


Resolution Foundation examined the impact of the crisis on older workers, assessed the impact of previous crises, and placed this crisis in the context of longer-term trends in employment among older workers. Although workers aged under 25 have seen by far the largest fall in employment in the past year, workers aged over 50 have seen the biggest decline in employment since the 1980s due to the impact of the Covid-19 pandemic. The fall in the employment rate among the over-50s was twice as big as the decrease for workers aged 25 to 49, with older workers also taking longer to return to employment. The Resolution Foundation has urged the Government to ensure that its extensive Covid employment support schemes can be tailored to the needs of older workers, while retraining opportunities should be extended. 


Weekly Health Summary

Covid-19: Weekly Health Summary – 29 April

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

Labour calls for NHS rescue plan  

New analysis from the Labour Party has revealed the huge increase in waiting lists over the past 12-months, with hundreds of thousands of people waiting more than the 18-week maximum for treatment and thousands more waiting over a year. Over 366,194 patients are waiting more than a year for treatment. In January 2020, the number waiting over a year was just 1,643. Overall, the number of people waiting more than a year for treatment now compared to before the pandemic hit has risen over 200 per cent. The Party has called for an NHS rescue plan that would see patient care prioritised in the recovery from the Covid pandemic, it includes a quarterly plan on the actions being taken to bring down waiting lists, increased planning on staff and equipment, and a strengthening of the NHS constitution to eliminate waits over 52-weeks and offer a cast-iron guarantee. 

NHS Providers have called Labour’s analysis ‘concerning’. It said: ‘Trust leaders are deeply worried about the size of waiting lists, not just for operations and diagnostic testing but for all types of care including mental health services. Despite how quickly trusts are working to deliver for all patients, there are signs that tackling the backlog could take between three to five years on current trajectories.’ 

Covid-19 vaccine roll-out 

42 and 43-year-olds were invited to get their Covid-19 jab this week as Health Secretary Matt Hancock praised the continuing vaccine roll-out. Speaking to the Downing Street press conference, Hancock highlighted that uptake of the first dose among the over 50s is ‘phenomenally high’, at over 95%. The effectiveness of the vaccine is also strong with Office for National Statistics showing that 7 in 10 adults have protective Covid-19 antibodies.   

Additionally, encouraging data from Public Health England published this week shows that one dose of the COVID-19 vaccine reduces household transmission by up to half. It highlights that those who become infected 3 weeks after receiving one dose of the Pfizer-BioNTech or AstraZeneca vaccine were between 38% and 49% less likely to pass the virus on to their household contacts than those who were unvaccinated. 

Moreover, it has been confirmed that the Government’s Vaccines Taskforce has purchased an additional 60 million doses of the Pfizer/BioNTech vaccine. The extra doses have been secured to help support the booster Covid-19 vaccination programme beginning from Autumn. It is expected that the booster programme will be to protect the most vulnerable ahead of winter.  

NHS Confederation’s Chief Executive Danny Mortimer has said that the news on the vaccine rollout gives us ‘another source of hope and offers reassurance’. However, he said that we must not overestimate public protection against the virus and the tragic scenes in India show that ‘no country can be an island in tackling the pandemic’, as Covid-19 variants still spread.  

Social care reform  

An open letter, from 26 signatories including Care England, Age UK and the NHS Confederation, to the Prime Minister has called for a 1948 moment for adult social care to establish a long-term and sustainable future that will be to the benefit of all citizens and the economy. It highlighted that social care has been on the front line of the COVID-19 pandemic with a tragic number of deaths in care homes, over 30,000, and staff, nearly 900. It says that the social care sector is ‘on its knees’ following the pandemic, and is in desperate need of reform.  

Likewise, health and care think tanks, Health Foundation, The King’s Fund and Nuffield Trust have sent a joint letter to The Times which calls for social care reform proposals to be brought forward in the Queen’s Speech. It says that social care reform requires a long- term strategy and investment. The underpaid workforce must also be fairly rewarded, expanded and supported to develop new skills whilst thousands of overstretched care providers will also need stable funding.  

Health inequality in Wales 

 36 organisations from across health, social care, transport, and housing, including the Academy of Medical Royal Colleges in Wales, Shelter Cymru, the British Medical Association have signed up to a joint paper that calls for urgent Welsh Government action on health inequalities. This comes just a week before the Senedd election on May 6th. It argues that the incredible hardship inflicted by the COVID-19 pandemic has not been equally felt by individuals, families, and communities across Wales. The paper calls on the next Welsh Government to (1) publish an ambitious cross-government strategy and delivery plan to tackle inequalities, (2) invest in long-term prevention across all sectors, especially housing, education, health, energy, and transport, and (3) work in partnership with people and communities to change lives for the better. 

Weekly Economy Summary

COVID-19: Weekly Economy Summary – 22 April

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


Headline indicators for the UK labour market for December 2020 to February 2021 show employment was 75.1%, unemployment was 4.9% and economic inactivity was 20.9%. The UK unemployment rate was estimated at 4.9%, 0.9 percentage points higher than a year earlier but 0.1 percentage points lower than the previous quarter. The redundancy rate for the latest quarter was estimated at 7.3 people per thousand employees, which is down from the record high of 14.2 people per thousand employees in the previous quarter (September to November 2020). 

Employment among 18- to 24-year-olds continued to fall, dropping by 5.1 percentage points on the quarter, while there was also a further rise in young people moving into economic inactivity, meaning they stopped looking for work. Payroll data shows the number of young workers has fallen by almost 500,000 since January 2020, accounting for three-fifths of all employee jobs lost. The number of job vacancies increased by 16% between February and March, suggesting that the labour market is starting to thaw as some parts of the economy recover.                                                             

While the latest data hints at some green shoots of recovery, the Resolution Foundation warns that the UK faces a huge task in getting the economy back to normal – such as closing its 6.2 million ‘Covid employment gap’. This gap includes the 827,000 fall in payrolled employment since the pandemic started (between February 2020 and March 2021), an estimated 600,000 fall in self-employment over this same period, and the 4.7 million employees who were fully or partially furloughed in March, according to separate ONS data. 

Concerns over Inflation Rise  

UK inflation jumped in March, driven by the higher cost of petrol and clothes in a signal that prices are moving to an upward trajectory as the economy recovers from the coronavirus pandemic. The Office for National Statistics (ONS) said the consumer prices index rose to 0.7% last month, up from 0.4% in February. 

The British Chambers of Commerce published new research which shows a rising number of firms expecting their prices to increase significantly in the coming months. The figures also document growing concern among businesses over rising inflation. The survey shows that two in five businesses (38%) expect to see their prices increase in the next three months, an increase from 25% in the previous quarter, while the balance of manufacturing firms expecting the price of their goods to increase over the next three months rose sharply to its highest level since Q4 2017. The figures also demonstrate that nearly 1 in 3 (30%) businesses cite inflation as a cause of concern in the coming months, up from 1 in 4 (25%) in the previous quarter. 

Income shocks 

UK households are far more likely to have experienced a severe income shock during the coronavirus pandemic than their French or German counterparts, and are subsequently more likely to have taken on additional debt as a result, according to research by the Resolution Foundation think tank. In households where at least one person has fallen out of work, the report says that 41% have suffered a severe income fall of at least 25%, compared to 20% in France and 28% in Germany. One in three (33%) UK households have reported having to cut back on their spending compared to 23% in France and 21% in Germany, concluding that the financial resilience of UK households must be addressed in order to offer them greater protection in the face of a future economic crisis. 

Unlocking of the economy 

Data published by the ONS provides an indication of the extent to which some economic activity is resuming following the reopening of non-essential retail and outdoor hospitality. On 17 April, UK seated diner reservations were at 60% of the level of the equivalent Saturday in 2019, while retail footfall increased by 31 percentage points in the week to 17 April, compared to the previous week. Other growing measures included credit and debit card purchases of delayable good and the proportion of those leaving the home who had shopped for items other than food or medicine. In contrast, there was a slight decrease in the proportion of the workforce on furlough.   

Further ONS data shows that 77% of businesses are currently trading, up from 71% in January, and 9% intend to restart in the next fortnight. The proportion of businesses with lower turnover than normally expected is at its lowest since records began in June 2020. However, over half of businesses classified as ‘other service activities’ (including hairdressing and beauty treatment) have three months’ cash reserves or less.