This weekend’s briefings by the chancellor in relation to Wednesday’s mini-budget were a welcome response to cross-sector demands for employment support. But the proposed support programme could work so much better if accompanied by regional economic strategies designed by metropolitan mayors who are in touch with business leaders and the needs of their local economies, and can balance this response with the public health risks associated with coming out of lockdown.
Reports suggest that the government’s main response to the thousands of redundancies that have been announced in recent weeks will be the creation of 13,500 new work coaches to help the unemployed into new roles.
This is likely to come as an enormous disappointment to businesses here in West Yorkshire, as well as organisations such as the Confederation of British Industry, the Federation of Small Businesses and trade unions, all of whom have called for a much more ambitious set of interventions from Sunak this week. The chancellor is at risk of appearing to be a one-trick pony, lacking the flexibility to create a plan that is adapted to the economic requirements of different regions of the UK.
As one local business leader in West Yorkshire said to me this weekend, “For a party that is supposed to align with business the Tories are missing some vital facts: employers can’t pay 80 per cent of furlough with zero income. We can’t open with 30 per cent of footfall. If we have to close then we will shift the economic cost to the benefit system and there will be no ‘jobs’ market.”
So what can the chancellor do to respond to this problem, beyond offering mentoring and advice to those desperate to get back into the jobs market?
First of all, he should take immediate action to prevent any more young people arriving at the jobcentre. A special 50:50 furlough scheme – coupled with further grant support for businesses in sectors such as hospitality, leisure, sports and arts that are unable to operate on 30 per cent capacity – would enable a large proportion of small and medium-sized enterprises (SMEs) to survive. They could retain their staff and use them to find innovative ways to keep essential community businesses going over the next few months, whilst we find a way to live with this virus or even better develop a vaccine.
Our area has a very proud sporting, music, artistic, literary and theatrical history and it is essential not only to our economy but also for our wellbeing that these cultures and traditions are sustained.
The scheme could also be accompanied by a requirement for employees to be entered into purposeful training programmes that prepare them for the ‘future of work’. In the majority of cases, the best mentor for a young person is a successful and entrepreneurial employer – not a jobcentre adviser.
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Secondly, the chancellor should increase the funding available to local economic partnerships and directly elected metropolitan mayors to deliver skills and industrial strategies. Strategies should be published by the end of the year and in areas such as West Yorkshire, where no elected mayor is in place, then an interim could be appointed to lead on this work in consultation with representatives from business and the major political parties.
Job creation for young people is a relatively simple equation. It requires an understanding of what employers need, young people who want to work in that industry, and training providers to help bridge the gap between college/university and the world of work. None of this can be provided by jobcentre advisers, least of all at a time when most businesses are actually looking for older, more resilient and more experienced hires to help shore up their organisation at a time when commercial success means paying the rent and utilities long enough to prevent insolvency.
Here in Yorkshire the search for employees with skills and experience is a continued blockage to growth and job creation for SMEs. This was demonstrated by a YouGov poll in 2019, which showed that in Yorkshire and the Humber 41 per cent of SMEs found it tough to recruit highly skilled employees.
These strategies should be targeted not only at enabling young people to get into work but also at putting in place adult training and skills programmes so that anyone who finds themselves out of work due to the Covid-19 crisis, Brexit or the digital ‘fourth industrial revolution’ is able to get back into meaningful employment.
Of course, underpinning this is the need for the government to work more effectively with regional leaders to ensure that we do not need to enter into further local lockdowns. We will soon see the additional damage that has been done to businesses and the associated loss of jobs in Leicester, after it became the first UK city to haveto continue lockdown. New data suggests that places in Yorkshire are also at risk of spikes in Covid-19 cases and this is backed up by recent outbreaks at the Forza Foods site in Pontefract, the Kober meat processing plant in Cleckheaton, and at a bed factory in Batley.
Lastly, the chancellor must work with regional leaders to support the growth of digital, health and energy technology businesses in the regions outside of London and the South East.
West Yorkshire has an enormous opportunity to grow its high-tech and high-skilled economy. With the growth and development of universities in Bradford and Huddersfield, alongside the more established universities in Leeds, a large amount of new intellectual property is being created by academics in the areas of health, energy and digital technology. With the right investment and business support from financial and legal advisers the output from their applied research could be commercialised into new treatments, tools, services and solutions to the most pressing issues of our time – health, social care and climate change.
But to do that we need to create an environment that stimulates interest from investors, including better transport connections to London and the presence of professional advisers with routes into the international investment community.