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Express & Star comment: Economic upheaval will be far reaching

By Star Comment | Opinions | Published:

The economic upheaval resulting from the Covid-19 pandemic will be far reaching.

Pellicci's Cafe in Bethnal Green, east London. Chancellor of the Exchequer Rishi Sunak announced, in his summer economic update, a VAT cut from 20% to 5

A significant proportion of Britain’s workforce remains on furlough and of those people, estimates indicate that more than a million could be made unemployed when the Job Retention Scheme ends in October.

Despite the Government’s targeted support towards the hospitality industry, the UK’s third biggest economic sector into which billions are being ploughed, restaurants and pubs are closing at a rate of knots. The vast Pizza Express chain appears to be the latest casualty with up to 15 per cent of restaurants expected to close, adding a further 1,100 to the unemployment total.

The Job Retention Scheme was a masterstroke by Chancellor Rishi Sunak. Though it cost many billions and plunged the nation into unprecedented debt, the situation would have been far worse without its creation.

Many businesses that are now starting to take their first, faltering steps back towards a new reality were kept afloat by furlough. From builders to office workers, from those in hospitality to those in tourism, from creative workers to people in industry; there is little doubt that many millions more would now be on the dole queue had their jobs not been temporarily protected.

It is impossible, however, for such schemes to operate indefinitely. They are simply too expensive to be sustainable. As we look towards an uncertain future in which social distance is the present ‘normal’, more action must be taken. Grants, incentives and targeted support for those who need it most must be on the agenda for both national, regional and local policy makers.

Yesterday’s Getting Building Fund announcement, which promises millions for shovel-ready projects, is a step in the right direction. Such investment is vital if the region is to recover from the impact of Covid-19.

Our economy faces a challenge on a scale that has not been seen in a generation. The Government must continue to innovate and invest it attempts to navigate a pathway to a brighter future.

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