Flexibility is a virtue in Rishi Sunak’s Treasury. It allows the government to stay nimble and responsive to changing needs as it seeks to combat the pandemic and keep the economy moving.
But while keeping billions of pounds in reserve during troubled times might serve the City hedge fund manager that Sunak used to be, the unemployment figures for October showed it was a deeply flawed position when confronting a deadly virus outbreak and one that contributed to higher job losses than might otherwise have materialised.
It is clear that companies shed workers in the belief that the Treasury would stick to its guns and end the furlough scheme as scheduled in November. Sunak said the move was all part of a switch to a scaled-back system of support that put an emphasis on retraining the jobless.
With legal obligations to meet concerning notice periods and consultation, firms had little option but to consider terminating employment contracts before the deadline.
Little did they know that the chancellor was biding his time, waiting to see if the second lockdown was going to be imposed. This was the lockdown that countless health professionals said back in the summer was coming after the virus began to gather strength.
Not long after the pandemic struck, the French and German governments promised businesses and households that state support would stretch into 2021 and remain in place until the effects of the virus had waned.
The Treasury’s tactical approach meant a similar commitment was ruled out, until it was too late for some.
We cannot know how many of the 370,000 redundancies during the three months to October, most of them from the retail and hospitality industries, might have been saved. It is fair to say, quite a few.
