The Tories fear that their policies are leading to an economic catastrophe.
That’s why chancellor Rishi Sunak announced yet another amendment to his support package for business on Thursday. He ripped up his job support scheme that replaces the furlough programme on 1 November.
The new measures mean lots more cash for businesses.
At the start of the coronavirus crisis in March, the government introduced the furlough scheme. This gave bosses the money to pay 80 percent of the wages of millions of workers.
That level of support has been reduced ahead of the end of the scheme on 31 October.
Under Sunak’s original proposal for the successor job support scheme, the state would cover only up to 22 percent of the wages of workers employed at least part time. Employers would be expected to pay 55 percent—and the worker to take a hit of nearly a quarter of their pay.
Under the scheme announced on Thursday the business contribution for unworked hours will be cut to only 5 percent—a massive fall.
It means that if a part-time worker was being paid £587 a month for their unworked hours, the government would be contributing £543 and their employer only £44.
It’s a direct subsidy to firms—that will still be able to pay mega-salaries to their directors and give handouts to shareholders.
Workers will still lose as much as before.
The only paltry concession is that they will be eligible for the scheme if they are working at least 20 percent of their usual hours, a cut in the threshold from the previous 33 percent.
Sunak took steps to make sure there would be no serious opposition to his plan. He held a “hybrid” briefing with business leaders and trade unions in a London restaurant, with executives also attending online, early on Thursday.
Instead of joining in from afar with Sunak's coffee and croissants meeting while he hands cash to bosses, the unions should be joining the resistance.
Paul Nowak, the TUC deputy general secretary, hailed a “useful roundtable with Rishi Sunak”.
Later the TUC said, “Today's measures are a step forward. But there are still big holes in the government's plan.”
Sunak also announced that grants of up to £2,100 a month will be made available to hospitality, leisure and accommodation companies hit by tier two restrictions as well as tier three. This will be retrospective.
Bosses were cheering. Kate Nicholls, chief executive for the UK Hospitality industry group, tweeted, “Huge and very welcome intervention by chancellor. Thanks for listening.”
But it comes too late for tens of thousands of workers. Many areas have spent months under tier two restrictions without support and people lost their jobs.
However it was enough for Manchester mayor Andy Burnham to say that this was all that had stood between him and doing a deal with the government earlier this week.
He tweeted, “I said directly to the PM that a deal was there to be done if it took into account the effects on Greater Manchester businesses of three months in Tier 2”.
Sunak said the package reflected “the seriousness of the situation we face”.
The Tories have good reason to fear that they are about to preside over a devastating slump.
The imminent end of the main furlough scheme will see another vast swathe of redundancies.
Gertjan Vlieghe, a member of the bank's Monetary Policy Committee, warned the jobless rate could rise above the bank's predicted peak of 7.5 percent.
In a speech on Tuesday he said not all of the current two million furloughed workers would return to their jobs.
“The risks are skewed towards even larger job losses,” he said.
Other forecasters have already said they expect a rate of 9 or 10 percent unemployment. That would mean well over 3 million unemployed.
There has to be a fundamental turn from words of mild opposition from Labour and the union leaders to a determined fight for health, safety, jobs and livelihoods