Report highlights ‘U-shaped’ jobs impact of pandemic

The Covid-19 pandemic has led to the biggest annual fall in employment for older workers since the 1980s, according to a new report.

The Resolution Foundation, supported by the Nuffield Foundation, examined the economic impacts of the pandemic on workers over the age of 50, and how periods of unemployment can affect their prospects upon returning to work.

It found that the crisis has created a “U-shaped” employment shock, with older and younger workers affected far more than those in the middle of the age distribution.

Although workers under 25 have seen by far the largest fall in employment in the past year (3.9 percentage points), the fall in employment among those aged over 50 has been twice as big as for those aged between 25 and 49 (1.4 compared to 0.7 percentage points).

And the report noted that the cost of losing your job can be particularly high for older workers.

After losing work, older workers take the longest, on average, to return to employment – with fewer than two-thirds returning within six months – and they see the biggest drop in earnings.

Some older workers who became unemployed during the pandemic may end up having to either retire earlier than they planned to, thereby reducing their income in retirement, or work for longer to make up for lost earnings.

The think tank called for more retraining opportunities for older workers.

“The government must ensure that older workers are not forgotten in the design and implementation of schemes created in the wake of the crisis to help people back into work,” said Nye Cominetti, senior economist at the Resolution Foundation.

Alex Beer, welfare programme head at the Nuffield Foundation, added: “We urge the government to offer tailored support to older workers, including opportunities to retrain, adequate support to find new jobs and, for all workers, greater rights to flexible working.”

Footfall rockets as shops reopen

Shoppers have flocked back to high streets in England and Wales as shopsreopened after three months of full lockdown.

As of Monday, non-essential shops, hairdressers, salons, pubs,restaurants, outdoor attractions and gyms reopened in England.

People living in Wales can also now visit non-essential shops and travelacross the border to other areas of the UK.In the first few hours of trading, footfall in shopping centresincreased by nearly 340% compared with a week ago, according to thelatest data from Springboard.

Meanwhile, footfall on high streets was up 233% and retail parks saw a58% week-on-week rise.The chief executive of the British Retail Consortium, Helen Dickinson,told Sky News that around £30bn of in-store sales have been lost duringthe Covid-19 pandemic so far and shops were “desperate to welcome theircustomers back”.

Some pubs and hairdressers opened at midnight, when the lockdown ruleswere officially eased.

And there were queues outside shops early in the morning as high streetretail opened up.

Primark is among the stores extending opening hours from 7am to 10pm tohelp prevent overcrowding.

UK SMEs preparing for post-Covid bounce

More than one in four small and medium-size businesses in the UK are planning to boost their investment this year, new research reveals.

A survey by Virgin Money found that 27% of SMEs plan to invest more in their businesses in the year ahead than during a typical year before the pandemic. Over a third (35%) of SMEs plan to invest between £10,000 and £10m this year, up from 32% in 2020.

Meanwhile, the number of new businesses being started has reached a record high, highlighting growing confidence among entrepreneurs. The annual growth rate in the number of registered companies surged to 8.3% in the last three months of 2020 — the highest since Virgin Money’s Business Pulse began in 2014.

Separate data from Companies House shows that over 90,000 more businesses were created in 2020 than in 2019.

It’s not all good news, though: more than half (57%) of SMEs surveyed currently have staff on furlough and just one in five (19%) expect to be able to retain all furloughed employees after the Coronavirus Job Retention Scheme comes to an end. In fact, more than a third (38%) of SMEs expect to reduce their workforce this year.

On the positive side, nearly one in five (18%) expect to take on more employees in 2021. Nearly half (47%) of SMEs looking to increase their headcount will be doing so due to expansion plans. Around a quarter (26%) say improvements in the economy will make them confident enough to expand their workforce, and 23% say they need more staff to deal with pent-up consumer demand once restrictions are lifted.

Commenting on the findings, Virgin Money’s group business director, Gavin Opperman, said: “It has been an incredibly challenging environment over the last 12 months, but our latest Business Pulse shows that many firms have adapted with incredible pace to the new environment, demonstrating extreme resilience and innovation to navigate through the difficult landscape.

“While there are undoubtedly significant challenges ahead, many businesses remain optimistic and intend to invest for the future as the economy recovers.”

Summer cruise customers must be vaccinated against Covid, says P&O

P&O Cruises has become the latest cruise operator to announce that travellers will only be allowed on board if they have been vaccinated against coronavirus.

Its newly announced summer sailings will only be open to UK residents who have had both doses of the Covid-19 vaccine at least a week before departure. Proof of vaccination and the dates given will be required prior to boarding.

Guests must also have travel insurance with medical and repatriation cover that includes cover for emergency evacuations and medical expenses related to Covid-19.

Saga Cruises and Virgin Voyages in the United States have announced similar policies.

P&O will run cruises on two ships around the British Isles this summer. The Britannia will cruise from Southampton along the south coast of England for three or four days, while the Iona will travel to Scotland from Southampton for a seven-day trip. Guests will have to stay on board, with no shore excursions allowed.

BoE governor cautiously optimistic on post-Covid recovery

There is “light at the end of the tunnel” for the UK economy, according to the governor of the Bank of England, Andrew Bailey.

In a speech to the Resolution Foundation think-tank, Bailey cited the drop in new Covid-19 infections and the “huge achievement” of the vaccine programme as reasons for optimism.

He said that the outlook was “positive but with large doses of cautionary realism”.

The Covid-19 recession is expected to have fewer long-term effects than some past downturns, but structural changes seen during the crisis are likely to have an impact on the economy.

“We will work more from home than we used to and shop more online because new habits will persist to some degree, and to the extent they unwind it will be over a period of time,” Bailey said.

Last week, the Office for Budget Responsibility predicted that the UK economy would grow by 4% this year and return to its pre-pandemic size by the middle of next year, six months sooner than previously anticipated.

Unemployment is now forecast to peak at 6.5%, instead of the 11.9% expected last July.

IMF anticipates ‘vaccine-powered’ rise in economic activity

With vaccines against Covid-19 expected to be widely available by the summer, the International Monetary Fund (IMF) is anticipating a pick-up in global economic activity later this year.

Its latest growth forecast projects that the global economy will grow by 5.5% in 2021 and 4.2% in 2022.

This year’s forecast has been lifted by 0.3 percentage points, reflecting expectations of a “vaccine-powered” pick-up in global economic activity and additional policy support in certain large economies including the United States and Japan.

The projected recovery in growth follows a “severe collapse” triggered by the spread of coronavirus in 2020. The global growth contraction for 2020 is estimated at -3.5%.

Activity levels in the US and Japan are expected to return to end-2019 levels in the second half of 2021, while in the UK and the euro area activity is expected to remain below end-2019 levels into 2022.

“The wide divergence reflects to an important extent differences across countries in behavioural and public health responses to infections, flexibility and adaptability of economic activity to low mobility, pre-existing trends, and structural rigidities entering the crisis,” the IMF explained.

The UK economy is expected to grow by 4.5% this year, followed by growth of 5.0% in 2022. The UK’s estimated 10% contraction in 2020 was the largest of the G7 group of advanced economies.

Working During a Pandemic

When there is a pandemic going on, you may want to take extra steps to keep yourself and others safe, while still allowing yourself to continue working. Whether this involves still travelling to your place of work, or working from home, will be down to the discretion of your employer, as well as the needs of the company.

Even with the pandemic, people still need a means of earning money and paying their bills. To make things easier, both companies and individuals can work together to improve the cleanliness of offices and try to make working conditions as sanitary as possible. This may be even more vital should your role also involve physically dealing with members of the public.

Staying Safe

When a pandemic like covid-19 occurs, there may be additional safety measures that you should put in place. Some of these may be mandated, while others will be advised. Regardless of your thoughts on the severity of the situation, it is best to err on the side of caution. Even the most fashion-conscious individual can use branded covid protective masks to help keep themselves and others safe. This can help to prevent the spread of germs through coughing and sneezing. Companies themselves may also wish to consider purchasing masks which hold their logo, as part of their measures to keep employees safe and also advertise who they are.

Washing Hands

While keeping your hands clean and practising good hygiene is important on any average day, it is far more imperative when there is a pandemic going on. Considering the number of surfaces and items that you and your colleagues may touch during the average eight hour working day, there is a clear risk of germ transference. By washing your hands at regular intervals, as opposed to only when you have used the toilet, ensuring that the scrubbing process is achieved for a minimum of twenty seconds, you may be able to help prevent the spread of covid, as well as other viruses and bacteria that may be present, such as the common cold.

Remote Working

One option made available to some employees throughout the pandemic is remote working. So long as it is feasible to do so, you may be allowed to work from the comfort and safety of your own home. This may require you to take company property, such as laptops, home with you.

To make remote working as easy as possible, and to avoid disruption, it can be beneficial to set up your workspace in a seldom-used room in the house. If you have a spare room or home office, this may be ideal. Getting into a good routine, much as you would when physically present at work, can also help you to stay on track with your work.

Just because the world has changed around you, that does not mean that you cannot continue with some of your usual tasks, including those related to your employment. By following the health and safety guidelines set out by both the government and your employer, you may be able to increase your safety.

Record number of small firms could close, warns FSB

At least 250,000 small businesses in the UK are set to close without further help, the Federation of Small Businesses (FSB) has warned.

Its latest quarterly survey showed that confidence among small business owners is at the second-lowest level in the report’s ten-year history, second only to that recorded in March 2020. The majority of those surveyed (80%) do not expect their performance to improve over the next three months.

Worryingly, a record number of small business owners surveyed at the end of December 2020 said that they were planning to close their firms over the coming 12 months, putting the UK on course to lose more than a quarter of a million businesses.

Just under 5% of the 1,400 firms surveyed for the study said they expect to close this year. This figure does not include those hoping to survive despite having frozen their operations, reduced headcounts or taken on significant debt.

“The development of business support measures has not kept pace with intensifying restrictions,” said FSB national chairman Mike Cherry. “As a result, we risk losing hundreds of thousands of great, ultimately viable small businesses this year, at huge cost to local communities and individual livelihoods. A record number say they plan to close over the next 12 months, and they were saying that even before news of the latest lockdown came through.

“At the outset of the first national lockdown, the UK Government was bold. The support mechanisms put in place weren’t perfect, but they were an exceptionally good starting point. That’s why it’s so disappointing that it’s met this second lockdown with a whimper.

“There are meaningful lifelines for retail, leisure and hospitality businesses, which are very welcome as far as they go. But this Government needs to realise that the small business community is much bigger than these three sectors.”

Firms in supply chains and those without commercial premises are among those still “left out in the cold”, Cherry added.

The FSB has presented the Treasury with proposals on how to address the current gaps in support.

In a statement quoted by BBC News, the Treasury said that no changes were planned at present, but added: “Our support schemes are designed to get help to those who need it most whilst protecting the taxpayer from fraud, but of course we keep everything under review and are always open to further ideas.”

UK Govt announces £4.6bn in new lockdown grants

Retail, hospitality and leisure businesses in the UK will receive new grants to help them survive the latest Covid-19 lockdown, Chancellor Rishi Sunak said on Tuesday.

It comes after the UK Government announced that these business will have to close again in order to help control the spread of coronavirus.

England’s lockdown rules are due to be reviewed on 15 February while Scotland’s will be reviewed at the end of January.

The one-off top-up grants are expected to benefit more than 600,000 business properties.

Closed businesses in the retail, hospitality and leisure sectors with a rateable value of £15,000 or under will be eligible to receive a grant of £4,000. Those with a rateable value between £15,000 and £51,000 can apply for a £6,000 grant, and £9,000 will be available for business properties with a rateable value of more than £51,000.

As business support is a devolved policy, the UK Government will provide £375m in additional funding to the Scottish Government, £227m to the Welsh Government and £127m to the Northern Ireland Executive.

A further £594m is being set aside to support businesses in other sectors that might be affected by the restrictions. This money will be made available by local authorities.

In total, the measures are worth £4.6bn across the UK.

Fewer redundancies planned after furlough extension

There was a fall in the number of jobs at risk of redundancy in November, despite a second lockdown in England and other restrictions in Wales and Scotland.

Figures released to the BBC in response to a freedom of information request show that employers in Britain were preparing to make 36,700 redundancies last month. That’s down from a peak of 156,000 in June and is the lowest number of planned redundancies since lockdown restrictions were introduced in March.

Under legislation that applies in England, Scotland and Wales, employers must notify the Insolvency Service if they plan to make 20 or more workers redundant in any single “establishment” using a form called HR1.

The figures suggest that Chancellor Rishi Sunak’s decision to extend the furlough scheme until the end of April 2021 has helped to protect jobs.

Sainsbury’s, Gregg’s, John Lewis, Edinburgh Woollen Mill and Jaeger and were among the companies that announced job cuts in November.

However, around 25,000 more jobs could be lost with the failure of big retailers Arcadia and Debenhams, if the two groups are unable to find buyers. Topshop owner Arcadia fell into administration at the end of November and the news was swiftly followed by the end of last-ditch efforts to rescue department store chain Debenhams, which had been in administration since April.

For now, the November figures provide “encouragement that there will be a steady trickle, rather than a tsunami, of job losses over the next few months,” said Ruth Gregory, senior UK economist at consultancy Capital Economics.