Skip to content
Wednesday 22 July 2026London --:--Frankfurt --:--Zurich --:--
NewslettersSearchEN · DE
City PM

European business, markets and politics

FTSE 100
10,716.97
+1.24%
DAX
25,155.41
+0.58%
CAC 40
8,437.89
+0.89%
STOXX 50
6,316.99
+0.50%
  • Europe
  • Markets
  • Business
  • Economy
  • Technology
  • Politics
  • Opinion
More
GermanyFranceBankingAIEnergyFintechPropertyCapital Markets
  • Germany
  • France
  • Europe
  • Markets
  • Business
  • Economy
  • Technology
  • Politics
  • Opinion
  • DE
Thursday 05 November 2020 3:25 pm  |  Updated:  Thursday 05 November 2020 4:52 pm

Editorial: Chancellor’s move is a five-point-turn that has already cost jobs

By: Andy Silvester

Add as a preferred source on Google
The Chancellor Hosts A Roundtable For Business Representatives
(Photo by Stefan Rousseau-WPA Pool/Getty Images)

If it wasn’t such a serious matter, Rishi Sunak’s description of his furlough u-turn today as the result of a flexible and agile approach would have been darkly comic.

Because a U-turn it most certainly is, albeit not of the handbrake variety. Instead, it has been by degree, a five-point turn that has already cost jobs. 

It is but weeks ago that the Chancellor, whose Midasian touch appears to be waning, was saying that he wanted only to protect viable jobs and that an extension of the furlough scheme would be economically unwise. 

Businesses made decisions about their staff, with entrepreneurs and managers making the toughest decisions of their lives to lay people off, and those made redundant looking at an even bleaker version of this liberty-free winter than they were. 

Read more: Covid-19 cases begin falling in London

Those comments have had consequences. If today’s scheme was announced in September, many if not all of those redundancies don’t happen. 

Of course, the scheme – even if it was announced weeks ago – is still deeply flawed. It’s a one-size-fits-all sticking plaster for an economy that is anything but. 

A scheme that needed fixing, not revisiting

In its purest form, in which staff are unable to work at all, it actively encourages inactivity. In firms that are totally shut, that makes sense. But it is nonsensical that the policy has no flexibility for firms that are able to operate, just at lower levels than in ‘normal’ times. It encourages businesses to shut up shop, rather than keep the till ticking over at a slower rate.

It is also ruinously expensive, but such arguments about fiscal prudence – and the apparently antiquated belief that it is broadly unwise to run a country on IoU notes – don’t have much cut through these days. 

In March there was an excuse: an unprecedented spike in cases of a new and unknown disease. 

In October, there is less of one: just as appears to have been the case in other areas of the pandemic response, the lessons of the first wave have gone unlearnt in the second. 

Read more

Burnham has a chance to build trust in AI

Andy Burnham discussing AI advancements at a business conference podium with delegates in the background

The inconsistency of the self-employed scheme, which continues to spray cash to many of those who don’t need it whilst ignoring nearly half a million who do, is again a horrendous failure of policy and planning over the summer. 

Sunak was right to talk about viable jobs. He was right to resist pressure for this clunker of a scheme to stick around for the winter. 

But if he was going to change his mind, then doing so several weeks ago could have prevented the wave of redundancies we have just seen. 

And though no doubt the Government will claim the virus has moved the goalposts, they cannot say they weren’t warned. 

We have seen the SAGE modelling. 

If the Government takes those projections as gospel – and one assumes they do, since we are being consigned to house arrest for four weeks – then they should have adjusted their economic policy then. Instead, Sunak continued to essentially tell employers to get on with redundancies.  

There are parallels to the Government’s lockdown strategy here, too: it is not for the first time that the Government has been committed to one course of action, before changing its mind just after the point at which a change of heart would have the most positive consequences. 

The Resolution Foundation describe this by-hook-by-crook u-turn as “deeply suboptimal.” Paul Johnson, boss of the economic wonk factory the Institute for Fiscal Studies, says he is “baffled” by the announcement. 

It seems churlish to complain about a project that will save jobs. But count us amongst those who, on trying to ascertain the Government’s strategy, see only sporadic, often panicked tactics. 

Read more: There has to be another way out of Hotel California lockdowns

Read more

UK investors turn to bonds as equities valuations continue to stretch

Traders analyzing data on screens at London Stock Exchange, showcasing investment trends and market activity

Share this article

  • Facebook
  • X
  • LinkedIn
  • WhatsApp
  • Email

Similarly tagged content:

Sections

  • News
  • Opinion

Categories

  • Opinion
  • Politics

Related Topics

  • Coronavirus
  • Re-lockdown

Trending Articles

  • Romesh Ranganathan makes it hard to defend the BBC

  • Exclusive: Rugby World Champions Cup set to be mothballed

  • Tax rises ‘guaranteed’ as Healey faces £22bn black hole from Burnham spending plans

  • John Healey becomes Chancellor as Andy Burnham names top Cabinet appointments

  • Rachel Reeves’ sister takes top legal role in Burnham’s Cabinet overhaul

More from City PM

  • Burnham has a chance to build trust in AI

    Opinion
    Andy Burnham discussing AI advancements at a business conference podium with delegates in the background
  • UK investors turn to bonds as equities valuations continue to stretch

    Markets
    Traders analyzing data on screens at London Stock Exchange, showcasing investment trends and market activity
  • FCA eyes tougher AI rules as Brits turn to chatbots for financial advice

    AI
    An all-party parliamentary group said on Tuesday that the FCA's treatment of both internal and external whistleblowers was “alarming”.
  • What a room full of the Indian diaspora’s biggest names revealed about Britain’s AI opportunity

    Partner
    Indiaspora event at Londons skyline showcasing cultural diversity and networking among global Indian leaders
  • British Business Bank cuts jobs in automation push

    Banking
    British Business Bank 10th anniversary celebration featuring executives, commemorative banners, and festive decor
  • Burnham premiership begins with decline in job postings

    Economics
    Andy Burnham, Mayor of Greater Manchester, in a professional setting.
  • Treasury minister: Meeting Nato defence pledge is Burnham’s job

    Politics
    UK defence strategy meeting, officials discussing military advancements and security measures in a conference room setting
  • The devastating prognosis for the UK’s public finances

    Economic News/Analysis
    Dramatic cloud formation over Westminster, capturing a striking skyline with iconic landmarks under a moody sky.
CityPM

Independent European business, markets and political news for decision-makers.

Morning Briefing

Europe

  • Germany
  • France
  • Europe
  • UK & Ireland

Business

  • Markets
  • Banking
  • Technology
  • Energy
  • Property
  • Fintech

Editorial

  • Opinion
  • Editorial Policy
  • Corrections
  • Contact

Company

  • About City PM
  • Privacy Policy
  • Terms of Use
  • Cookie Policy
© 2026 City PM Ltd · Published by CityPM Media, Bahnhofstrasse 65, 8001 Zürich, Switzerland
Privacy · Terms · Cookies · Facebook