Business support still needed as nation navigates Johnson’s pandemic roadmap

Would it have killed the government to at least announce an extension of the furlough scheme alongside its reopening plans? Business groups and unions say it can’t be allowed to end in April, reports James Moore

Cash-strapped: the chancellor must dig deep for firms (Reuters)

There was a hint of optimism in the air from the business community as Boris Johnson outlined his roadmap to the end of the pandemic. Life could, he said, be back to normal by the end of June.

But let’s be clear here: there should be an emphasis on the “could”. There are still a number of challenging looking Aintree-sized fences to clear, including the “four key tests” the government wants passed before through each stage. 

The vaccination programme must continue to move at pace with high levels of take up, the evidence needs to show that the jabs are sufficiently effective in reducing hospitalisations and deaths in those vaccinated, and infection rates can’t be so high as to risk a surge in hospitalisations.

The final test – that risk assessments aren’t altered by new nasty variants – is the one I’d file under “X factor”. The virus is the joker in the pack. It’s just that no one’s laughing.

But let’s assume for a moment that new nasties don’t spoil the party and come 21 June it’s genuinely safe to venture out for a glass of something cold at the local hostelry.

Even if it is, it won’t be “over” for that hostelry’s owners. 

There seems to be an impression in some places that businesses will suddenly be able to go from 0 to 60 like Lewis Hamilton taking the latest Mercedes F1 car for a spin at the team’s test track. 

Take off those furlough sweat pants, workers of Britain’s, it’s back to the grindstone because there’s a wall of money going to crash over your employers.  

It might work like that in the fever dreams of Britain more naive politicians but in the real world it’s a different matter. Businesses have multiple moving parts; supply chains to handle, staffing needs to calculate, revenue forecasts to make, cost bases to adjust, debts to manage. And manage. And manage some more.

Boris Johnson has told MPs the government will not “pull the rug out” from under businesses and their employees for the duration of the pandemic, which does rather depend on how you define that term. More details will be forthcoming when the chancellor, Rishi Sunak, unveils his next Budget on 3 March, we are told.

Would it really have killed the pair of them to at least have provided some clarity on the furlough scheme? As TUC director general Frances O’Grady pointed out, the prime minister’s plan means some businesses will not be able to reopen before the job retention scheme closes at the end of April, leaving workers worrying about what might happen to their jobs and their incomes in the gap.

Now Johnson’s statement makes it pretty clear that Sunak will act to prevent that from happening. So why not simply put an end to any lingering uncertainty, something the UK has had quite enough of courtesy HM government? Is political theatre really that important?  Apparently it is.

This isn’t just a union plea. Business groups have also called for an extension of the furlough scheme. The Institute of Directors called for “cashflow support “ and “discretionary grant funding” as well. 

“We think that the government’s roadmap for easing England’s current Covid-19 lockdown will direct the economy back to its pre-pandemic size by Q1 2022,” Capital Economics said optimistically. 

Goodness knows there’s been little enough of that to be had and it would be marvellous were that forecast to prove accurate.

But business groups have made it clear that the road leading to that destination isn’t easily navigable and an awful lot of businesses are driving cars with faulty engines that lack the power to clear some of the pitfalls along the route. An early end to the furlough scheme is just one of those. 

As he works at his Budget, Sunak urgently needs to think about building some bridges. UK plc is going to need them.