Coronavirus: What happens when lockdown ends? – BBC Newsnight

published on July 20, 2020

Businesses are confronting a new reality this kitchen is busy but it's producing food for cook 19 a charity delivering meals to NHS workers the other side of the kitchen door is a different story we don't know when restaurants will open or what the rules will be but the reality

Of dining while distancing may not be appealing to customers and strict limits on capacity at scene in Spain just may not work for many in the sector the consequences for this industry would be catastrophic and I think by catastrophic

I mean not just that maybe 10 or 20 percent of restaurants and bars and pubs would shut which I would have thought is likely irrespective of the actions government takes decisions they make I mean more like 7080 percent of those

Businesses would shut and those jobs would be lost because the truth is in this country and the way that the economics of restaurants and bars work restaurants and bars have to be busy to make money the hospitality industry

Accounts for about 10 percent of UK employment that Hawksmoor the vast majority of its 700 staff are on the government's job retention scheme known as furlough if restaurants are allowed to open while

They're perceived as a public health risk or if they are allowed to open when the chances are they're going to make loss is greater than the losses they're making now when they're closed and being supported we need some kind of tapered

Support from this job retention scheme to make sure that we can continue to survive and that we continue to be an employer there is a deadline looming the furlough scheme at the moment finishes at the end of June but for businesses

Struggling with lock down and wondering if they'll be able to operate profitably under social distancing the pinch point comes before that the consultation period for redundancies can be up to 45 days so some companies are going to be

Starting to take decisions pretty soon the furlough scheme currently pays 80% of the wages of staff who aren't working at all up to a cap of two and a half thousand pounds of month it's estimated it could ultimately cover perhaps eight

Million workers furloughing wasn't just about safeguarding people's incomes it was about stopping businesses failing and keeping that link between employer and employee which should make it easier to restart the economy but

With consumers weary and business struggling that restart could be very slow indeed and that presents a whole new risk the success of the scheme has been preventing that wave of redundancies that we expected but there

Is a real chance that actually all we've done is delayed them and if the government can't find a way to ensure that there's a real easing off of the state aid that businesses are receiving then there is a huge risk that actually

A lot of those people that were furloughed will simply be moved on to a redundancy process and then ultimately will be left unemployed British Airways this week announced up to 12,000 redundancies nearly half the number of

Staff it furloughed Ryanair today flagged 3,000 job cuts and companies from traveled to retail to manufacturing are trying to figure out how to operate after lockdown it means the furlough scheme will need to change we published

A report saying strongly they should consider allowing part-time working or you could look at it on a sector-by-sector basis that somehow the government has to put in place unchanged to the scheme that means we don't see

That sort of delayed response which does see millions more people because that is the risk millions more people are becoming on employee the Chancellor said this week he plans gradual changes to government support so a scheme estimated

To cost as much as 14 billion pounds a month could be with us for some time as the skies clear after lockdown there will be more calls to reduce furloughs generosity and to beef up provisions aimed at abuse or chlorine back funds

From companies whose profitability ultimately hasn't hugely suffered that's not a debate here I think the argument from restaurants from bars is that we're a relatively special case we are we are mandated to shut but also I think we're

Worth preserving restaurants are part of the social fabric of this country right but they're part of communities or pubs and restaurants parts of communities irrespective of the size of the town village or city that you live in all of

That is at risk if we don't get these decisions right over the next few months spaced out tables perspex screens or scaled down menus whatever post lockdown brings the challenge is to ensure too many businesses don't decide staying

Empty it's preferable to operating half-full Helen Thomas we also discussed the future shape of the post corporate economy and the role of government is supporting those who may be engulfed by the coming storm I'm joined by Lord

Hesseltine former Conservative Deputy Prime Minister soon I'll be joined by Francis a greedy the general secretary of the tea you see and Mail stride the chair of the Treasury select committee and good

Evening now Lord has no time first of all you have witnessed every post-war economic crisis in terms of the breadth and the depth of this how does it compare do you think this is much more serious it must

Have complex interrelationships between the science and medical side of our society and the job creation and job maintenance side my specialist in artists have always been in the regeneration of urban deprived areas and

In my experience that is the stage which the government has not talked enough about my anxiety is the longer they delay in looking at this regenerative approach the more it will sign the form to

Whitehall would so simply to do what it always does which is to hand out money to specialist groups that are part of the power structure of the housing department lis education Department of rep Transport Department and whereas

What I've discovered in my experience is that there were three things you've got to do first of all you've got to base your recovery on a bottoms-up strategy based on local circumstances secondly you have to somebody in charge and we

Fortunately have mayor's in nine of our great conurbations and and of course London and thirdly you have to distribute the money in a way that will generate the maximum cooperation between the wealth-creating sector and the third

Sector of the universities in other words you've got to harness this national agreement that we have seen in fighting the coronavirus you have to harness that sense of local pride local ingenuity local enterprise in the battle

To regenerate the economy we're in a situation now where it's very clear there'll be no return to austerity in fact Boris Johnson said he didn't even like the word yesterday so no return to austerity but how do you level up now

Because that was all about the the debt the Tories owed for the last election of votes along the red wall coming – how do you level up in these areas is one thing saying there's good to be regeneration but how do you stop the inequalities

Well you level up by looking at the strengths and opportunities of the area and by mobilizing local support from people who live there create jobs there understand the challenges there and are prepared to cooperate working together

That's the first thing you have to see you have to have somebody in charge and then you have to use the money based upon what you can give up from other people the government we know the government has not only got them further

Scheme which is about preserving existing jobs but there's a wall of public money which is now to be spent on the capital investment programs of the public sector and instead of just spending that for example on roads or on

Housing there should be a system whereby the local people say if you build a road here we will develop this particular site if you give us a research grant from the universities we will try and develop a science Park if you improve

The local Doc's we've got people who will in would invest you have to think as the local people would think as opposed to how Whitehall would traditionally think thank you very much for that at France we're greedy and

Figures from the US show that unemployment levels are not those see not since the Great Depression in your view we've already got some incredible statistics already in terms of industries which are suffering what do

You think that the figures will look like when the ferocity is scheme that you helped to design actually starts to taper away it depends I deal with this next phase what's really important I think is to

Have a proper green industrial strategy that's jobs rich and puts jobs and skills at the heart but we also need to ensure as people have already said that we taper this for you so we get off this merry-go-round when of Burnett's

Redundancy motifs is going to be issues and the fact isn't it there are going to be redundancy notices issued they just are not every job is going to be saved I think we have to say that mail strike what do we do about that they were in a

Situation where it's almost latent unemployment and people are going to actually be devastated probably in another four or five weeks thinking I am I going to be kept on no I am NOT we've just heard from that the film there how

Difficult is going to be to restart some of these businesses particularly for example in the catering sector in those kind of sectors these business are going to find it very hard to survive yes indeed Kirsty a lot of

Businesses will and it's I think the Chancellor's made it clear that you know you can't save every company the art here is going to be to do the best that we possibly can under the circumstances and a couple of points on this one is as

You pointed out these measures are incredibly expensive 14 billion pounds a month is about the amount that we spend on the whole of the National Health Service so these are colossal sums of money and at some point we are going to

Have to step back from support but we're going to have to do it in an appropriate and measured way and that certainly doesn't mean doing it too early because the danger there as you've highlighted is that you simply end up having a

Number of employees parked for a period of time and then simply going to redundancy but we've also got to take a sector-by-sector approach to this I believe so that those areas that need longer support can have

That support they're provided they're fundamentally viable sectors in what will be a rather different economy once we come through this crisis if rasberry on the question of the economy looking different will full-time work look

Different is this actually a time to do something radical about the nature of work how we share it out how we upskill people and how we make sure that everybody has something but not necessarily everything

Well the TPC had been for productivity and technology changes to fund a four-day week ultimately at some point and this has happened in a way perhaps that we didn't want and didn't expect but I think what we will find is that

We'll have our generation of workers who will expect much more flexibility from work you know we've had a it's a tale of two countries really we've had millions of people continuing to work through this crisis it's important that their

Work is safe and that their livelihoods are protected we've had another part of the country working from home or furloughed and I think a new generation of workers will expect flexibility pro worker flexibility from day one so on

Their terms not just on the and Mel straight you were talking about the economic impact of that I mean it is possible in terms of the debt that you we've got massive debt that could be with us for a very long time and

Borrowing could rise to 38 percent of GDP this year have we just got to accept that that's the look at what the new world we live in and that we are going to be a country of massive debt for a very long time well in terms of

Affordability of debt of course it's not just the size of the amount that you owe it's the interest that you pay on that debt and the good news there is that at the moment I think for the foreseeable future the government is likely to

Continue to be able to borrow at historically low interest rate so in a sense that's a very strong insurance policy when it comes to leaning further into debt but I think inevitably once we're through this crisis we will take a

Different view of debt financing to that which perhaps we had a decade ago and we're going to have to lean more into debt probably as has been suggested that the appetite for cutting spending will probably not be there and there'll be

Good reasons for spending in many areas somewhere weak sure Mike there's just outline and of course however there will be implications here for tax and we talked earlier that you do think the tax burden should certainly not following

The young just how it fell on their you know the the young felt the felt fall out of 2008 more than anybody else briefly Michael Hairston there did you ever see think you would see a Conservative Party which is is of such

Huge our sight is such amazing interventionists and we'll have to be interventionist for a very long time did you ever think you would see that well all my life as a senior cabinet minister I have practiced interventionist

Policies and so that my experience is based on a partnership between the public and the private sector which in practice is the only way in which modern economies can work we have a particular system party political system in this

Country which tends to rather accentuate the two components and to minimize the interdependence between them what the coronavirus has demonstrated beyond any human question is that dependence between the

Two and the government faced with the crisis through a throne every possible energy at using the resources of both and of building on the strengths of both and what what it has done and that this is a very encouraging aspect it has

Provoked an upswell of community enthusiasm and commitment from people across the whole spectrum thank you very much indeed so I'm so sorry I'm afraid we're going to have to finish that there thank you

Very much for joining us tonight

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