Read on Twitter
More I ponder it, more the full reversal of economic policy today to where we were in lockdown I (ie full furlough everywhere for every sector) is extraordinary
It's hard to keep track of the many different furlough schemes... so forget the schemes names and focus on specifically what has changed today and for which firms
For the hardest hit sectors that are legally required to close in lockdown II (hospitality/leisure/most retail) or tier 3 areas post lockdown (hospitality/leisure) NOTHING has changed
Instead the big change today is for companies that AREN'T legally required to close. The news is: 1) them getting the option of putting workers on full furlough (previously they'd have had to be doing some hours work) 2) lower contributions towards costs of furloughed workers
What's the impact of this? Three things stand out. First it deals with one big problem we had: the lack of support for firms not legally obliged to close but in effect forced to close (think conference venues or supply chains to closed firms e.g places doing laundry for hotels)
Second it deals with the devolution headache government finds itself in (ie how to provide access to furloughing given varying types/durations of lockdowns). To avoid a situation where, say, Scotland has access at a time when England doesn't they're just giving it to everyone
Third, in solving these 2 problems we've changed incentives for firms operating semi-normally - who can now use full furlough rather than 1) make redundancies 2) keep people part-time. This means jobs being kept where problem isnt covid/temporary & probably less work done overall
If nothing else this illustrates the unavoidable judgements/trade-offs in these schemes IF you're not prepared to have more targeting. Reasonable people will disagree on this one (in contrast no-one reasonable should support repeating the Self-Employed Scheme. It = a turkey)...
...but this is a huge change in approach from the Chancellor. A few weeks back he wanted to see a shake out of jobs from hardest hit sectors (which were dubbed non-viable) but now he's not just preventing a shake out in those sectors but reducing churn in the whole labour market
This massive change in approach can get lost once everyone's eyes glaze over at the announcement of the 8th different furlough scheme in as many months - but its worth recognising. We certainly weren't expecting such a big change in approach today.
