Businesses and unions call for state help after England adopts Covid Plan B

Labyrinthine Covid Reminder System Is The Real Reason For The Delays

The government faces increasing pressure to revive leave and other emergency financial assistance programs after it imposed work-from-home orders in England due to the rapid spread of the Omicron coronavirus variant.

Business leaders and unions have warned that failure to provide assistance to businesses and their workers in the hardest-hit sectors of the economy could squander the progress made since the related restrictions were relaxed. pandemic in early fall.

Some reacted angrily, accusing the prime minister of trying to “save his skin” by announcing sidewalks in order to distract from the week’s political scandals.

Ruby McGregor-Smith, President of the UK Chambers of Commerce, said: ‘The government must once again stand by business and provide a package of support to ensure we get through a difficult winter without seriously hampering our economic recovery. . ”

Warning that support from the Treasury and measures to fix the sick pay system were glaring omissions from the government’s announcement on tougher restrictions, union leaders said leave would be needed for the worst sectors. hardest hit in the economy.

Work from home, masks and Covid pass: Boris Johnson exposes plan B - video
Work from home, masks and Covid pass: Boris Johnson exposes plan B – video

Frances O’Grady, general secretary of the TUC, said: “Requiring people to work from home during the busy Christmas season will affect jobs – unless ministers reinstate the leave. Housekeepers, receptionists, conference and banquet staff, and hospitality and retail workers will be short of work if people don’t come into the offices, ”she said. .

“Ministers must reassure workers in hard-hit sectors like hospitality, recreation and travel that their livelihoods are secure. “

Manuel Cortes, general secretary of the transport union TSSA, said: “Many more workers are going to feel the pinch as Plan B goes into effect. new restrictions.

Boris Johnson has told employers in England their staff should work from home whenever possible from Monday and announced mandatory vaccine passports for nightclubs and places with large crowds.

Matthew Fell, director general of policy at the CBI, said the new restrictions were a “big setback for business”, especially in hospitality, retail and transportation at a key time of year for sales during the holiday season.

“It will be vital that the impact of these restrictions is closely monitored and that the government is ready with targeted support if needed,” he said.

Even before Johnson’s announcement on Wednesday, concerns over Omicron had already shaken consumer confidence, affecting sectors of the economy where face-to-face interaction is most important, such as hospitality, travel and entertainment. .

Pubs, hotels and restaurants had previously reported a wave of Christmas holiday cancellations, while tighter controls on overseas travel meant travel and tourism companies had suffered a drop in bookings from winter vacation.

Michael Kill, chief executive of the Night Time Industries Association, said the new rules would have a “devastating impact” on sites and questioned the timing of the announcement.

“Is this sound evidence-based public policy or is it an attempt to shift the current affairs agenda from a damaging story about the Downing St Christmas party?” It feels like nightclubs and bars were thrown under the bus by the Prime Minister to save his skin.

The trade body, which represents nightclubs, theaters and other venues, said its members’ businesses in Scotland and Wales – where measures similar to those planned for England have already been announced – had experienced a drop in trade of up to 30%.

Hotel industry executives said there had already been a slowdown in activity due to mixed messages from the government, while warning that orders for office staff to work from home would affect footfall at establishments from the city center during the crucial Christmas period.

Alex Proud, the owner of Proud Cabaret’s three venues in London and Brighton, said bookings had already fallen by more than a quarter, as the passport program would trigger further cancellations. “It’s an armageddon for us. It is a disaster that does not need to happen.

Martin Williams, boss of M Restaurants and the Gaucho steak chain, said hospitality jobs would be at risk. “Any government measure must be offset by additional support to our sector in terms of extending commercial tariffs and a permanent reduction in VAT,” he said.

Despite fears about the fallout from the latest measures, economists said the new controls were relatively light compared to previous phases of the pandemic, meaning a relatively moderate impact on the economy as a whole.

Paul Dales, UK chief economist at consulting firm Capital Economics, said Plan B would likely cut between 0.2% and 0.5% of GDP. “It seems pretty small, if people don’t buy train tickets, go to work or the pub near the office. It’s very different from closing all retailers and the hospitality industry, ”he said.

However, launching more stringent controls such as shutting down non-essential retail businesses, hotels and schools would cause more damage. That could trigger a 3% drop in GDP in January, Dales said. Barclays analysts said the economy could be pulled down 4% to 5% in the first three months of 2022 in such a “worst case” scenario.

Economists increasingly expect the Bank of England to hold back from raising interest rates when its monetary policy committee meets next Thursday.

However, the impact could be mitigated as companies have adapted and found ways to continue trading during times of restrictions and lockdowns, for example by using online channels. As a sign of progress since the crisis began nearly two years ago, US investment bank Goldman Sachs said it expected in a “bearish scenario” with “national restrictions” imposed for three months, the economy could sink by just 1.7% in the first quarter of 2022.

This contrasts sharply with a collapse of nearly 20% in the second quarter of 2020 during the first wave of Covid-19, amid the worst economic slump on record.

However, any move to tighten controls further would trigger an immediate contraction in the economy and turbocharger demands for emergency economic support measures such as business subsidies, loans, tax cuts and holidays. .

Dales said: “If the Chancellor did not reinstate the leave program, the fall in the economy would be more severe or last longer. “


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