John McGowan: Another lockdown is a failure by us to take responsibility

Derry News business columnist says people have the power in their own hands to keep the economy alive

THE GUEST COLUMN: Emmet Doyle speaks about 'learning from lockdown'

Empty streets in Derry during lockdown.

The UK Chancellor Rishi Sunak was back in the news on Thursday when he announced the Job Support Scheme which will kick in after the furlough scheme ends.

In my first article on Covid in March 2020, I drew attention to the economic Armageddon Covid could wreak across many sectors and particularly the service sector side of our economy.

A few weeks ago, I pointed out the potential cliff edge many employees were facing when the furlough scheme ended.

It's clear many employers are not in a position to just begin paying staff again as restrictions mean additional costs and suppressed returns.

They say a week is a long time in politics, but in a pandemic, a week in an eternity.

In the last week the second wave has clearly returned and numbers across Derry/Donegal have skyrocketed.

For a few days we were the highest two counties in Ireland per capita for positive Covid cases.

The picture is Ireland/UK is pretty similar so any speedy return to the pre-Covid employment or consumer spending levels have now been abandoned.

When the Chancellor announced the original furlough scheme it was clear he saw it as a short sharp intervention to avoid collapse.

Even Boris promised the British public that everything would be ok by Christmas.

Boris's comment at that time reminded me of the British Generals packing the young squaddies off to the Western front in 1914 saying "it will be all over by Christmas".

Last week in the House of Commons, Mr Sunak's language had clearly changed.

The swagger was definitely gone.

The sudden spike in numbers has forced many regional lockdowns in the UK.

This huge spike in numbers so soon was clearly not in his first analysis by the Chancellor.

The Job Support Scheme he announced on Thursday was clearly in response to a deteriorating business environment.

To do absolutely nothing when the furlough scheme ended (his original plan) would have caused millions of redundancies in October/November.

But is this new scheme on its own going to be enough to avoid huge numbers of redundancies?

Personally, I think it’s too little too late.

The programme itself is a carbon copy of the German Kurzarbeit scheme which the Germans have used for years to top up those on short time working.

The problem I see however is the percentages being used by the government.

The furlough scheme helped the employer up to 80%.

Under this new scheme the maximum amount is 22%. It's just far too low. If it had been 40% the shock would not have been so great.

Think about an employer with a payroll of £20k per month.

Under furlough, if they had kept all staff at 80% of salary without a top up it didn't cost them anything in the initial few months.

Over the last few months of the furlough the subsidy was gradually reduced but still very generous.

Under this new scheme however, employers can claim a maximum of 22% of the £20k.

It leaves the employer to pay nearly £16k per month.

Also, under the new scheme the employee has to physically work a third of the hours.

If we for an example, take John who has a 37.5hrs a week full time contract.

The employer to qualify for the subsidy must have 12.5hr a week of work for John.

The other 25hrs of John's contract are split three ways with the employer paying a third and the government paying a third and the employee losing out on the last third.

It's a bit confusing but with a 37.5hr contract the employer must pay 20.7hrs to claim 8.2 hrs of a subsidy.

The remaining 8.2hrs are unpaid. John will only receive 77%of his weekly salary.

As I said earlier, I can't see a huge uptake in this but it will vary from sector to sector.

The hospitality sector is warning that 675,000 jobs are at risk.

I can't see many of them taking this up particularly as more and more restrictions kick in across the UK &and Ireland.

Some employers I know will use it and it will help in a small way to pay something to dedicated loyal staff but on the whole, it will not stop the huge jobs losses that are coming.

I do think if the figure of subsidy had been set at 40% the update would have been much greater.

Only a fool would predict when this current crisis will end and there are quite a few jockeying for that position.

Leading that pack is US President Donald Trump who believes the US will have a vaccine before the November 5th Presidential Election.

It's clear this is not the case and that Covid will be here for the foreseeable future.

We are in for a six month period of uncertainty on the health and economic front.

All we can do folks is realise that washing our hands, keeping a safe distance and wearing a mask does work.

If we follow those three rules then we can get going again.

I've no time for "anti-maskers". I shun then or just tell them to get stuffed.

The science is clearly there, relating to these three simple rules.

We can't go back into a long deep lockdown like March. Economically it's too damaging. It destroys business and lives.

It also has a huge effect on our society in terms of education, mental health and overall health.

How many people have had health issues go undetected over these last six months? How many have seen their health deteriorate as they wait for vital hospital appointments?

People who believe we control the coronavirus by simply locking down need a reality check.

The only way to beat this is to accept it will be with us for a while and we have to take personal responsibility to protect ourselves and others.

There will be outbreaks but we must deal with those and move forward.

The best thing you can do to protect jobs in Derry is wear a mask, wash your hands and keep a safe social distance.

And just tell anti-maskers to get lost.

The choice is as stark as "die of hunger or die of coronavirus".

If we choose to wear a mask and follow the rules for a while then we can all eat and control the spread of the virus.

Another lockdown is a failure by us to take responsibility.

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