Category Archives: Economic policy

Economic cost of Covid crisis prompts call for one-off UK wealth tax

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Tax experts and economists outline ‘fairest, most efficient’ way to repair public finances and quickly raise £260bn

The government has been urged to launch a one-off wealth tax on millionaire households to raise up to £260bn in response to the coronavirus pandemic, as the crisis damages Britain’s public finances and exacerbates inequality.

The Wealth Tax Commission – a group of leading tax experts and economists brought together by the London School of Economics and Warwick University to examine the case for a levy on assets – said targeting the richest in society would be the fairest and most efficient way to raise taxes in response to the pandemic.

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Deadly frost and war with the French: Britain’s recession of the 1700s

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Economic distress caused by pandemic is the first in a very long time to have been brought about by the natural world

The chancellor has said the government will borrow a peacetime record of almost £400bn this year in the face of the worst recession the UK has experienced in more than 300 years. But how many of us know what happened at the time of that distant milestone?

Three centuries ago, Britain looked very different. The country was still largely agricultural and as such was completely at the mercy of nature – though 2020 has shown that perhaps, in a way, it still is. Nonetheless, in the early 18th century it was the success or failure of the harvest, which depended on the weather, that had a profound impact on the rate of economic growth.

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Failure to seal post-Brexit deal would more than halve UK growth, says KPMG

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Accountancy firm warns of stalled economic recovery without EU trade agreement

Failure to strike a post-Brexit trade deal would cut the UK’s economic growth rate by more than half next year, delaying a full recovery from the coronavirus pandemic, according to a report.

The accountancy firm KPMG said the economy would suffer heavily should the UK fail to secure a trade deal with the EU before the end of the Brexit transition period at the end of December, just as the country attempts to escape the deepest recession since records began.

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Five post-Trump obstacles to a global green recovery

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Joe Biden’s win gives the globe a better chance of averting climate catastrophe, but major obstacles remain

Environmentalists have been heartened by Joe Biden’s victory as, if the US rejoins the Paris agreement as expected, it will give the world a much better chance of averting climate catastrophe. However, there are still hurdles to overcome to rein in emissions and keep warming to within 1.5C above pre-industrial levels.

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UK coronavirus live: Boris Johnson holds news briefing on first day of England’s new lockdown

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Latest updates: PM gives televised address after Sunak extends furlough until end of March

Q: What is your response to concerns about the data presented by government? (See 4.11pm.)

Johnson says the government is happy to share the data it has.

Q: Won’t we have to live with restrictions for some time?

Stevens says the NHS is prepared for coronavirus.

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Rishi Sunak announces extension of UK’s coronavirus furlough scheme – video

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The chancellor has announced that the government will extend the UK's furlough scheme until March as the second wave of Covid-19 infections and new lockdown threaten to push up unemployment. In a major climbdown, Rishi Sunak said the Treasury would continue to pay 80% of workers’ wages

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Understanding how this catastrophe occurred is of critical importance

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The catastrophe facing the UK is a direct result of our government’s obsession with libertarian issues. Now we must avoid repeating the same mistakes

Six weeks ago, the government was given a stark warning that the nation faced a “very large epidemic with catastrophic consequences”. Only by imposing an immediate two-week “circuit breaker” lockdown could it hope to reduce the spread of coronavirus, the Sage group of scientific advisers told ministers.

“As over 90% of the population remain susceptible, not acting now to reduce cases will result in a very large epidemic with catastrophic consequences in terms of direct Covid-related deaths and the ability of the health service to meet needs,” the group warned.

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Temporary, timely and targeted. Furlough has proved to be just one of these

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As mark 1 gives way to mark 2, scheme has prevented return to dole queues of 1980s– for now

Temporary, timely and targeted. That was how Rishi Sunak described the government’s strategy for coping with the impact of Covid-19 when he gave his budget speech on 11 March.

Less than two weeks later the UK was in lockdown and the chancellor sought to deliver on his pledge with the Treasury’s job retention scheme, or the furlough as it has become known.

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Sunak’s £12bn scheme for self-employed was ‘terribly targeted’, says analysis

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Review finds testing flaws meant support went to many workers who lost no income but not to others who had

Rishi Sunak’s flagship scheme to help the self-employed through the pandemic has handed £1.3bn to workers who saw no loss of income while giving nothing to 500,000 people left without work, new analysis has revealed.

In a sign of major flaws in the £12.7bn self-employment income support scheme (SEISS), more than 400,000 workers were able to claim support despite losing no income in the crisis.

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PM confirms Covid tier 3 restrictions for Greater Manchester as talks fail

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Boris Johnson refuses to specify how much support region will get

Greater Manchester will be moved into the highest tier of coronavirus restrictions from midnight on Thursday, Boris Johnson has confirmed as he refused to say whether a £60m offer of support for the region remains on the table following failed negotiations.

Speaking at a Downing Street press conference, the prime minister did not specify how much support the region would get. Andy Burnham, the Greater Manchester mayor, had sought £90m in support for businesses and staff affected by the measures, dropping the request to £65m, but ministers offered £60m and ended the talks without a deal.

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Covid could overwhelm NHS without more curbs, northern leaders told

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Decision expected on whether to extend tier 3 rules to Greater Manchester and Lancashire

Deaths from coronavirus will continue to rise for at least three weeks and the NHS risks being overwhelmed unless the strictest curbs are imposed on another 4 million people, leaders in northern England have been told.

A decision on whether to extend tier 3 restrictions – closing pubs and restaurants and banning household mixing – to Greater Manchester and Lancashire is expected on Thursday.

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IMF estimates global Covid cost at $28tn in lost output

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World economic outlook says 2020 impact is less than thought but there will be deep scars

The International Monetary Fund has scaled back its estimate of the hit to the global economy from Covid-19 this year but warned that the final bill for the pandemic would total $28tn (£21.5tn) in lost output.

Gita Gopinath, the IMF’s economic counsellor, described coronavirus as the worst crisis since the Great Depression, and said the pandemic would leave deep and enduring scars caused by job losses, weaker investment and children being deprived of education.

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New furlough scheme may not be enough, say north of England firms

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Covid measures are designed to help businesses forced to close their doors over the winter

Hospitality businesses in the north of England have said they will struggle to survive on the new support package unveiled by the chancellor if they are forced into weeks of local lockdowns.

Carol Ross, the landlady of the Roscoe Head pub in Liverpool, said the new jobs support package- which includes the government paying 67% of employee salaries if businesses are forced to shut down and a further £3,000 a month in cash grants towards other costs – was not enough.

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‘Mr Brexit to Mr U-turn’: German commentators befuddled by Johnson’s zig-zagging

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Media criticise PM’s Covid strategy, as UK adopts job support scheme similar to Germany’s own

The UK followed in the footsteps of the German government by adopting a jobs support scheme on Thursday. The announcement came as German commentators spoke of their confusion at the zig-zag approach to tackling the coronavirus, describing a nation caught up in feelings of panic, disbelief and disillusionment.

“Military intervention to control coronavirus rules a possibility,” ran one banner headline in the business daily Handelsblatt this week, while an editorial in the Süddeutsche Zeitung was titled: “Johnson’s skittishness endangers his country.”

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What’s missing from the chancellor’s new scheme to save jobs?

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Five measures absent from the chancellor’s winter economy plan

Rishi Sunak’s winter economy plan prioritises additional support for “viable” jobs. However, critics have warned that other measures are still needed to help people who have already lost their jobs or will lose them despite the new government scheme.

Here are five measures that could help keep workers in jobs, but were missing from the chancellor’s winter economy plan:

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Rishi Sunak could do worse than copy Germany

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There is evidence that scheme under which Berlin tops up wages of those put on short-time working is effective

It all looked so different for Rishi Sunak three weeks ago. After a bleak early spring in which the economy was sacrificed for health reasons, there were signs that the worst might be over.

Related: Germany’s furlough scheme saves firms from freefall

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Up to £3.5bn furlough scheme cash may have been wrongly paid out

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Error and fraud rate for scheme estimated at between 5% and 10%, says HMRC chief

The government believes it may have paid out up to £3.5bn in wrong or fraudulent claims for the furlough scheme.

Jim Harra, the top civil servant at HM Revenue & Customs, said that his staff had calculated for the possibility that as much as 10% of the money might have gone to the wrong places.

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Covid-19: UK economy plunges into deepest recession since records began

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GDP falls 20.4% – the worst of any G7 nation in the three months to June

Britain has entered the deepest recession since records began as official figures on Wednesday showed the economy shrank by more than any other major nation during the coronavirus outbreak in the three months to June.

The Office for National Statistics (ONS) said gross domestic product (GDP), the broadest measure of economic prosperity, fell in the second quarter by 20.4% compared with the previous three months – the biggest quarterly decline since comparable records began in 1955.

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UK to plunge into deepest slump on record with worst GDP drop of G7

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Official measure to be declared this week as coronavirus lockdown shrinks GDP by 21% in second quarter

Britain’s economy will be officially declared in recession this week for the first time since the 2008 financial crisis, as the coronavirus outbreak plunges the country into the deepest slump on record.

Figures from the Office for National Statistics on Wednesday are expected to show that gross domestic product (GDP), the broadest measure of economic prosperity, fell in the three months to June by 21%.

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How prepared is Boris Johnson for a winter resurgence of coronavirus?

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The prime minister says he is hoping for the best but planning for the worst. We look at key areas of concern

Boris Johnson’s approach to a winter wave of Covid-19 is to hope for the best but plan for the worst, he said on Friday. The worst-case scenario was spelled out earlier in the week by the Academy of Medical Sciences: as many as 120,000 hospital patients dead. Avoiding that will depend on the state of preparations in many areas.

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