I have constantly pointed out to the government that closing down more than a third of the economy for an unspecified period will put many people out of work, bankrupt many businesses and create hardship for people who lose their income. I suggested a number of measures to offset some of this damage. I am pleased to report that the government has announced a scheme to enable companies to furlough their staff, keep them on the payroll when not working, with the government paying 80% of the cost for the period of shutdown up to an individual pay ceiling. It has announced a similar scheme for many self employed people. It has also offered state guarantees for commercial banks to lend to keep companies with much reduced turnover going through the difficult period.
I welcome this big response, but do not think it goes far enough. I am trying to persuade the government to underwrite more jobs and incomes, and to make the payments earlier. Only if we keep company workforces in being can we be ready for recovery as soon as the restrictions are lifted.
I am also about to tackle the government on the all important timing of exit from these emergency measures. I understand cautious advisers wanting to stamp out the disease want maximum isolation for the maximum number of people for as long as possible. They are worried that if we lift the bans early with numbers ill falling there could be a second wave. The government, however, has to balance this risk against the undoubted substantial extra damage to jobs and incomes if we keep the closures in being for too long.
John Redwood MP