When emergency support was first introduced for the UK rail sector in a very fast-developing situation in late March, few if any would have had much idea of what was coming in terms of the huge changes to people’s everyday lives amid the Covid-19 pandemic. And how long these would last.
The written statement to Parliament, published by the Department for Transport and Grant Shapps on March 23, was entitled “rail emergency measures during the Covid-19 pandemic”. And the opening line was: “We’re supporting train operators to make sure our railways stay open for key workers during the coronavirus outbreak.”
This move by the UK Government and Secretary of State for Transport Mr Shapps made good sense, as did the aim of ensuring key workers had the necessary transport to fulfil their crucial roles.
At that stage, for most outside observers, while the six-month duration of the emergency rail measures and their scale might have provided a bit of a clue, the hugely protracted nature of the Covid-19 pandemic would not really have been clear. The move to full UK lockdown was not announced until later that day, in a televised address by Prime Minister Boris Johnson.
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In any case, rail was obviously a sector operated for nearly a quarter-century through long-term franchise arrangements with private-sector operators which have on occasion not worked out. So a six-month duration seemed apposite in that regard, in terms of providing certainty to operators with financial models which could become stretched even with a far more modest disappointment in revenue projections than the wipe-out of non-essential travel with lockdown.
For people adapting to a rapidly developing situation and understandably entirely unfamiliar with the concept of a modern-day pandemic, there was naturally an initial focus on train refunds relating to Easter holiday travel or season tickets. Given the huge job losses, and wider fears over employment, it was natural that people would focus on retrieving what refunds they could for travel they were suddenly no longer able to undertake.
The furlough support scheme had only been announced three days earlier.
Mr Shapps’ rail support contrasted starkly in terms of the initial timeframe with the approach of the UK Government, and that of other countries around the world, on implementing lockdowns.
Starting in a European context in Italy, measures tended to be announced and then reviewed in a matter of weeks, rather than months. As time went by, they eventually extended over months, but daily briefings and promised reviews in a small number of weeks meant the public was able to get used to the situation gradually.
This allowed governments to assess frequently how the coronavirus pandemic was developing and to review the need for lockdown and, where necessary, extend it. Obviously, lengthy lockdowns ended up being required to save many, many thousands of lives in countries around the world.
Following a summer in the UK in which restrictions were eased with coronavirus infections falling sharply, perhaps fooling some into believing the pandemic was behind us and with those clamouring for faster reopening believing this was somehow a one-way bet, the tone from the Johnson Government has changed dramatically once again in recent days.
The change in tone from the Scottish Government is less pronounced. Scotland was relatively unaffected by what at one stage looked like a quite aggressive message from the UK Government that it was time for people in England to get back to their offices.
It is less than a month since Mr Johnson declared “huge numbers” were returning to offices and “quite right too”. He performed a swift U-turn this week, advising people to work from home wherever possible.
In Scotland, the message from First Minister Nicola Sturgeon has always been more cautious. And there has been a far more obvious recognition that it is not a one-way bet when considering the speed of reopening of the economy and returning to offices. There was a clear message that decisions on reopening and office-working would determine the degree to which coronavirus remained suppressed or otherwise – that a balance had to be struck. The signal was that this was not a time for impatience, and so it has proved.
Ms Sturgeon said late last month of moving from home-working back to offices: “I will not countenance in Scotland any kind of narrative around this that is seeking to almost intimidate people back to work before, as a country, we have taken the decision that it is safe.”
While manufacturing employees have to go to factories to work and there has been an understandable desire to reopen a hospitality sector which supports huge numbers of jobs, the idea of rushing people back into offices when they could work perfectly well from home never made sense in the middle of a pandemic. Such a move appeared to be increasing risk, with little reward in terms of mitigating economic damage given these workers were operating perfectly productively from home in any case.
Many people would rather be back in their offices but the question at this stage is whether or not that makes sense right now given the increased number of contacts that causes and thus the greater potential for coronavirus to spread.
As we see a resurgence of coronavirus infections, thankfully the UK Government has U-turned in its bid to get people, including huge numbers of civil servants, back into their offices.
This week we have also seen the UK Government’s emergency support for the rail sector extended for up to another 18 months. This timescale really underlines, in no uncertain terms, just how long it is going to be before the UK and other countries around the globe can return to any kind of normality.
Of course, by now the vast bulk of people are well aware of the extremely drawn-out nature of the human tragedy that is the coronavirus pandemic. And the timing of when things might return to normal will depend on whether and hopefully when a vaccine can be found.
However, even given that knowledge and the fact the UK Government “emergency recovery measures agreements” for rail announced this week are also tied in with bringing the current franchising system to an end, the 18-month timeframe for the latest support is truly eye-catching.
Also notable was Mr Johnson’s message, as he announced greater restrictions this week amid mounting fears over a second wave of Covid-19, that people could expect these measures to be in place for the next six months.
Ms Sturgeon also used the six-month timeframe ahead of her address on Tuesday to the people of Scotland on a tightening of measures.
On Monday, she cited six months as the kind of “timescale that we all have to be prepared to be living in a way that is not entirely normal”.
And while the UK Government’s chief scientific adviser, Sir Patrick Vallance, talked about a possibility of small amounts of vaccine being available by the year-end for certain groups, he added that it was “much more likely…we’ll see vaccines becoming available over the first half of next year”. That is still a way away, and it remains to be seen how things pan out with vaccine trials.
The Conservative Government, given Mr Johnson’s pronouncements this week and the provision of rail sector support for up to 18 months, must be well aware of just how protracted this crisis is going to be. This seems like an obvious thing to say. But the awareness has not always been apparent, amid mixed messages and stubbornness.
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The UK Government’s crucial coronavirus job retention scheme, which has largely supported the majority of incomes of furloughed workers even with the tapering we have seen, was initially put in place for a shorter period than the first batch of rail support, until May. It was then extended several times, eventually, with a controversial and unnecessary tapering of UK taxpayer support by the Government, running until October.
What had become ever clearer by the day, over months, was that this was not going to be anything like long enough.
Yet Chancellor Rishi Sunak and the UK Government rejected repeated pleas for an extension of the scheme in some form, even as it was pointed out Germany and France had extended their support for incomes and jobs to cover a period of up to two years. Belatedly, Mr Sunak stepped forward yesterday with some significant further support aimed at protecting jobs.
Something is obviously better than nothing. However, one wonders why Mr Sunak did not act sooner. His refusal to announce extended support earlier has further undermined business and consumer confidence, and will no doubt have led to unnecessary job losses as well as hitting aggregate demand.
It is little more than a month until the coronavirus job retention scheme ends so Mr Sunak and the UK Government left it late for their U-turn on support for jobs and incomes beyond October.
The tardy timing of the move is difficult to fathom, although it coincides with the U-turn by the Conservatives on office working. And it coincides with the UK Government tone on the coronavirus dangers – after many weeks of what often felt like an under-estimation of the risks of a second wave – having moved more into line with the public health-focused messages from the likes of the Scottish Government.
Mr Sunak’s measures, while clearly much better than nothing, are far less supportive than the furlough scheme. And visibility on UK support remains much less than that in France and Germany, with the latest backing for “viable” jobs in which people are able to work part-time extending for only six months.
The practical effect of these measures remains to be seen. A requirement for large companies to demonstrate a fall in turnover to receive UK taxpayer subsidy for wages and salaries seems reasonable.
However, Mr Sunak’s scheme will only help top up incomes of employees who can work at least one-third of their normal hours. In the likes of the seasonal tourism sector and hospitality businesses faced with curfews, and in other industries hit hard by the coronavirus crisis and associated restrictions such as travel, this will often not be possible. So many, many jobs which would be “viable” in the longer term will be lost.
Comparisons were drawn yesterday between the new measures and Germany’s Kurzarbeit scheme. However, the German scheme covers jobs even where the working hours have to be reduced temporarily to zero. This seems like a crucial requirement at the moment.
It would seem likely that, in coming days and weeks, myriad holes will be exposed in the Sunak plan. Hopefully, the UK Government will move to plug these swiftly, having wasted so much time already.
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