Commenting on the Chancellor’s Winter Economy Plan, Ryan Shorthouse, Director of Bright Blue, said:
“The Chancellor has, in effect, extended and evolved current government support for job retention, now expecting employers to make a greater contribution to wages and employees to be in work for a period of time if employers are to receive state subsidy. This is understandable: employers need skin in the game to avoid taxpayers subsidising dead-end jobs.
“It is right to restrict eligibility to the new Jobs Support Scheme on the basis of company size or if turnover has been affected by COVID-19, but coupled with the Jobs Retention Scheme, government support for wages remains very untargeted. The financial support is likely to be unnecessarily generous for some employers, but insufficient for those businesses that are facing a substantial and long-term collapse in demand.
“This unprecedented spending is causing a significant increase in our budget deficit. Considering our historic and projected economic growth, it is highly unlikely that growth alone will be able to service it in the long-run. Since there is strong demand for and commitments to increased spending in public services, this means it is inevitable that taxes will eventually have to rise. Indeed, the Chancellor did warn today that the cost of COVID-19 is being paid by all of us.
“COVID-19 will transform not only the state of our public finances, but the shape of our economy. Individuals, especially the increasing numbers now facing unemployment, need more support from the government to help reskill and upskill. Just as the Chancellor is providing generous loans to businesses, he needs to do so to individuals to help them train for the changing jobs market. As Bright Blue has recommended, those at any point in their working lives need to be able to dip into new lifetime learning loan accounts to pay for a variety of different training and educational courses, which could eventually be repaid on an income-contingent basis.”
Image: Number 10
