LACA view

Overview

The Chancellor Rishi Sunak stated that “it’s now very likely the UK economy faces a significant recession” as official data released today reveals that the British economy shrank 5.8% in March.

The Government has established 5 taskforces to look at how to reopen the economy in the following sectors;

1. pubs and restaurants.
2. non-essential retail (including salons).
3. recreation and leisure, including tourism, culture and heritage, libraries, entertainment and sport.
4. places of worship, including faith, community and public buildings.
5. international aviation.

The self employed Government support scheme has opened today, a few weeks earlier than planned. The housing market has taken its first steps to being opened as people can now visit others homes for viewings whilst observing social distancing rules.

The Education Secretary has resisted trade union calls to postpone the opening of schools, set to take place at the beginning of June saying the move was “right and responsible.” Police in England have been informed by the College of Policing that they have no power to enforce the 2 metre social distancing rule.

The PM came under pressure at PMQs regarding the former Government guidance on care homes. The Labour leader has accused the PM of misleading the House and urged him to return to correct the record after the PM claimed the guidance did not say that care home residents were unlikely to get COVID 19.

In the daily press conference, Housing Secretary Robert Jenrick stressed the measures the Government were taking to combat the virus through the new alert system and to begin rebuilding by getting the construction sector back to work. He said the Government would work with the trade unions to reopen schools according to the timetable the PM has set out.

The Daily Press Conference

The below is a summary of the remarks provided by Housing Secretary Robert Jenrick.

Housing Secretary Robert Jenrick described the steps the Government are taking to combat the virus. This included establishing a new COVID Alert System, with 5 levels, based on the R level and number of COVID cases. The social distancing measures are critical in controlling the virus.

We have been at level 4 for a while. Thanks to the hard work and sacrifices of the British people we are beginning to be able to move to level 3.

We have set out the first of 3 steps to modify the lockdown. We will do so while avoiding a 2nd peak that could overwhelm the NHS. All the available data will be used. Will only take the next step when able to do so.

Those who cannot work from home should talk to their employer about returning to work. People can now meet 1 person outside their household as long as they remain 2 metres apart.

On June 1st the Government aim to open primary schools and non essential retail, and allow cultural and sporting events to take place behind closed doors without crowds.

On July 4th at earliest more businesses will reopen including those that offer personal care such as leisure facilities.

• Starting a taskforce to look at when to open up religious places of worship earlier than July 4th for some things such as prayer.

Having taken the 1st step we have updated what we are asking people to do. For most people it is still best to stay home. For others that go out they should ensure that they are limiting contact with others, keeping 2 metres apart, wearing a face clothing when in an enclosed space, washing your hands and self isolating if you or any member of your household has symptoms.

We can control the virus by keeping the R level down and the number of infections. This is how we will save lives and livelihoods. The Government announced today how to restart the housing market and construction. From today anyone in England can move house if they follow the guidance.

Around 450,000 buyers have put their plans on hold and 300,000 tenancies up for renewal. People were stuck in limbo but now they can carry on with their purchases etc.

From today show homes are open, removal companies can operate and viewings can take place. For most people this is not a luxury. We have published detailed guidance with all parties following hygiene measures and social distancing rules.

People have asked why can you visit a house with a stranger to view it but not see family. We say that viewings should occur virtually first. If a viewing is taking place in person the current occupier should vacate the property to allow the buyer to see it. The property should be cleaned before and after.

All professionals involved in house purchases where possible should move the house moving date where a person is vulnerable and needs to postpone the move. We need to get building again too. Want new homes for key workers to be ready as soon as possible.

To achieve this will allow sites to apply to extend their working hours to 9pm from Monday to Saturday in residential areas and longer in non residential areas. Advice from Government is that this should be approved by local authorities unless very good reasons not to.

Thanked Taylor Wimpey who have started construction and taking workers off the furlough scheme and offering discount to NHS staff.

Planning inspectorate is being asked to make all planning hearings virtual within weeks. There is no visibility to judge the state of the housing market but in every economic recovery the housing market has been key. Will do what he can to support the construction workers and sector.

In answer to questions:

• He described a range of measures being taken to make care homes safe in response to media questions.
• He said there was more that the Government could do and their whole focus was on protecting care homes.
• Support package announced today is focused on infection control but this builds on extensive funding provided to councils over the last 2 months.
• On the international comparisons stats he said it was difficult to make accurate comparisons and the UK Government is collecting the rate in all settings The day when will know about relative performance is not now.
• He stated that the Chancellor would make decision about financial policy but the virus is destroying jobs and businesses and the measures that have been done have been about protecting as many jobs and businesses as possible. It is important that where it is safe to do so we reopen the economy.
• Schools need to return when it is safe to do so. Will keep working with the trade unions to make this possible.

Deputy Chief Medical Officer for England, Dr Jenny Harries

There is a reduction in use for all types of vehicles, except heavy goods vehicle. For all other types of vehicle usage has gone down by around 50%.

• Testing: 87,063 tests completed in previous 24 hours, total number of tests now over 2 million.
• Capacity is greater than being used so can direct spare capacity to key spots like care homes.
• Number of confirmed cases on 13th May 3,242, almost 230,000 have now been confirmed in total.
• 21% of critical care beds have COVID-19 patients. Down from 26% on 5th May.
• 711 patients admitted with COVID 19 on the 11th May. Down from 989 on 4th May.
• 11, 327 people in hospital with COVID 19 down from 13,273 last week across the UK.
• 494 confirmed daily COVID 19 deaths, 33,186 overall.

In answer to questions

• Asked about why families could not meet up she said - To make it fair to allow families to meet up where they have a large family it could have big effects.
• Dr Harries also stated there will be a degree of local discretion on testing in care homes.
• Every care home has an infection control strategy, we do recognise in some small care homes it can be difficult to maintain specialist skills though.
• International comparisons: Deaths data is being collected by different countries in different ways, need to look back at total deaths and adjust according to population profile and make it seasonally adjusted. Time to look back will be in around 12 months and it will be all cause mortality that will be the best measure.
• Regarding children’s education and safety: Should not just be thinking about what is happening now but also about how education improves a kids life chances and that has an impact on health. The school environment is controlled and so the balance of risk compared to home is difficult to judge.
  • Younger children seem at lower risk and don’t transmit it at a higher rate. Will be put in pushchairs to school so less likely to use public transport etc.

Prime Minister’s Questions

Labour leader Sir Keir Starmer continued to pressure the UK Government about its former guidance on care homes and putting COVID 19 sufferers there. This follows the release of ONS data that showed 40% of deaths have been in care homes.

The Prime Minister stated that the lockdown was brought in for care homes before the rest of country and discharging patients to care homes went down in March and April. The PM denied the guidance said that it was unlikely that people in care homes would become infected. This prompted Labour to highlight the former guidance in the media. Sir Keir has written to the PM to ask him to correct inaccurate statements he made to the House on the official guidance on care homes.

Sir Keir also highlighted the 10,000 extra deaths in April which exceed the usual figures for this month but are not recorded as COVID 19 related and the fact the Government have stopped the international comparisons in their daily briefings. The PM stated the care homes action plan is bringing down the number of deaths and on international examples Sir Keir should contain his impatience. 

Sir Keir also questioned how people would return to work without access to childcare, the PM responded that he expected employers to be reasonable. Sir Keir pressured the Prime Minister to publish the SAGE advice, the PM stated it would be published and SAGE had been fully involved in decision making.

Economic data suggest the UK economy is entering a recession

Official statistics show that overall UK GDP dropped by 2% in the whole first quarter of 2020 from January to March 2020. The 2% drop in GDP is not as big as the 3.0pc decline assumed in the BoE’s Monetary Policy Report but is still huge.

The Office for National Statistics (ONS) also revealed that industrial production fell by 4.2% between February and March 2020. All but one of the 20 sub sectors of the UK economy saw a decline in the last quarter, public administration and defence was the exception. The Bank of England predict the second quarter will be the worst on record.

The ONS has also published research on Coronavirus and the impact on output in the UK economy in March 2020 alone. It reveals that the decline in GDP in March 2020 of 5.8% occurred within that single month. By comparison, during the global financial crisis, from the peak in February 2008 to lowest point of March 2009, a total of 13 months, GDP contracted 6.9%.

Summer budget speculation

A confidential Treasury document leaked to The Telegraph and drawn up for Chancellor Rishi Sunak includes a "policy package" of tax increases and spending reductions, some of which break Conservative manifesto commitments.

The Telegraph report that the Treasury is expecting a £337bn budget deficit, much higher than the forecast £55bn predicted in March's budget. The leaked document envisages tax rises and spending cuts to raise between £25 billion and £30 billion. This is equivalent to a 5p increase in the basic rate of income tax.

Measures considered to address the debt included an end to the triple lock on pensions, a reduction in pension tax relief, increases to income tax, national insurance, VAT or Corporation Tax and a new public sector pay freeze.

Nevertheless, UK Government Bonds are in demand with the rate on 2 year bonds falling into negative territory to -0.046%. The papers include speculation that there will need to be a summer budget to kick start the recovery and to set the path for a consolidation to get spending and debt back under control.

Ending lockdown – five new taskforces established

Five new roadmap taskforces have been established to plan how closed sectors can reopen safely. The five sectors they cover are as follows:

1. pubs and restaurants (Department for Business, Energy and industrial Strategy)
2. non-essential retail (including salons) (Department for Business, Energy and industrial Strategy);
3. recreation and leisure, including tourism, culture and heritage, libraries, entertainment and sport (Department for Culture, Media and Sport)
4. places of worship, including faith, community and public buildings (Ministry for Housing, Communities and Local Government)
5. international aviation, reflecting the unique challenges that sector is facing (Department for Transport).

The taskforces will look at three things:

1. Ensure that COVID-19 secure guidelines are developed in line with the phased approach and public health directions, building on the existing guidance and providing intelligence and sector-specific expert input.
2. Agree and ensure alignment of all relevant sectoral guidance.
3. Provide key sector stakeholders direct access to Ministers to shape the guidance.

For each of the 5 sectors how they reopen will be considered as part of Step 3 in the plan to end the lockdown. Businesses wanting to engage around this should do so through the taskforce.

Government announcements

• The Housing Secretary Robert Jenrick has announced changes that will allow construction operators to allow sites to work longer, in collaboration with local councils.
• The scheme to support the self-employed has today opened for claims, a few weeks ahead of schedule. HMRC have 110,000 claims today totalling £340 million, the money will be paid on the 25 May 2020.
• Trade Credit Insurance Guarantee was announced by the Economic Secretary to the Treasury, John Glen MP.
• The Government has updated its list and guidance of the businesses required to close.
• The Government is to introduce a statutory instrument today that allows property viewings in the housing market.
  • From today, people will be allowed to travel to visit estate agents, letting agents or show homes, keeping in line with social distancing guidelines. House buyers will be permitted to view residential properties they wish to buy or rent.
• A new Charter has also been launched by the government and the Home Builders Federation, helping construction sites reopen in line with latest health and safety guidance.
• New guidance on spending time outdoors in England.
• New partnership to sequence human genomes in fight against coronavirus.
• New guidance on holiday entitlement and pay during coronavirus to cover areas where it differs to the usual statutory holiday entitlement.
• Guidance for further education (FE) providers on maintaining education and skills training, changes to funding arrangements, data collections and assessment.
• Information on the different types of testing kits that are available and the manufacturer specifications.
• DCMS have published ‘elite sport return to training guidance’ for the public, providers of outdoor sport facilities, elite athletes, personal trainers and coaches on the phased return of sport and recreation.

The guidance on social distancing in urban spaces and parks:

• This guidance is primarily for owners and operators of public places including commercial landlords responsible for public places.
• It is intended to enable the owners and operators of public spaces to plan for the temporary adaptations and interventions that will be needed as the restrictions on leaving the home are gradually reduced.
• Where social distancing is not possible, owners and operators are advised to do everything they can to reasonably reduce the risk.
• Owners and occupiers are advised to implement cleaning protocols to limit coronavirus transmission in public places. It is advised that touch points (e.g. handrails and gates) should be particular areas of focus for increased cleaning.
• Consideration should be given to:
  • Sufficient provision of automated hand sanitising dispensers in public places.
  • Using signs and messages to build awareness of good handwashing technique and other respiratory hygiene behaviours.
• Page 7 provides a good diagram on the steps that can be applied to identify key design issues in public places and potential temporary interventions related to social distancing. Areas with the highest footfall should be focused on.
• Pages 9-22 provide considerable guidance on the management of urban centres. The guidance covers high streets, retail arcades and commercial buildings. It advises on several interventions that can be taken in these settings so that they are manageable, including on the management of pedestrian space, pedestrian movement, queues and traffic.
• Pages 23-27 focus on the management of green spaces. i.e. parks and burial grounds. It recommends some similar interventions to urban centres such as widening footfall and maintaining one way movement.
• Owners/operators are encouraged to provide clear information to the public on how to adhere to social distancing (page 29).
• The security and regulatory implications of any temporary changes should also be considered (page 30).

Trade union opposition to the return to work

• The National Education Union (NEU) has said that it is unconvinced there is a scientific basis for the government guidance that teachers do not need PPE when schools re-open. The NEU has advised teachers not to "engage" with the planning process.
• Nine major unions, including the NEU, NASUWT, National Association of Head Teachers, UNISON and Unite among others, accused the Government of a “lack of understanding” about the dangers of the spread of Covid-19 in schools.
• The Education Secretary Gavin Williamson has stated that getting schools back at the beginning of June is the “right and responsible” thing to do and has resisted the teachers unions calls. However, he stated it would be based on the scientific evidence.
• More broadly, Len McCluskey, general secretary of the Unite union, has said: “Employers must not pressurise workers to imperil themselves and others by crowding on to buses, trains or tubes.” This indicates a series of challenges of the return to work could be mounted in other public and essential services.