Another thing that makes me nervous about the sudden acceptance to end the furlough scheme is that btw the UK government's handling of COVID and Brexit negotiations idea that enough focus would be given to support, retraining and helping new firms launch seems...optimistic.

The government has demonstrated it can get money out the door, but it has struggled with delivering more targeted policy. And the conditions under which they are withdrawing support are still terrible (is 2H20 an optimal time to be launching a new business/expanding operations?)

The rise in unemployment is already happening. Furlough scheme isn't primarily about propping up zombie companies but preventing a cascade of business failures that would overwhelm the public sector's capacity to support.

We like to talk about viable/non-viable business models as if that discussion isn't entirely context dependent. What we need to be discussing is whether we think the current COVID measures are short/medium/long term and what scale of ongoing support gvmt can commit to providing.

Two ways of reading UK government's actions: You can argue it's acting as if COVID measures are (broadly) permanent feature - so we need to clear out businesses that can't operate under those conditions now in order to allow labour to reallocate even if that means short term pain

Alt take is that government thinks they are likely to be removed quickly & so the furlough scheme is actively unhelpful - all it's likely to do is introduce frictions by disincentivising some to go back to work and reducing labour mobility by propping up already failing firms.

But in the first case, we should be extremely worried about the lack of a clear strategy about what long-term e.g. social distancing measures might require. And the second argument doesn't make sense of the government's *own* policy in delaying the reopening process.

Again, there's no communication on this and we are left to infer the government's assumptions rather than having an open public discussion about them. That's awful from a business planning and household confidence perspective (higher uncertainty -> higher precautionary savings)

It's the same mistake every time with this government. Cards held close to the chest as a matter of instinct, and not as part of an actual strategy. It didn't work with Brexit, and it won't work now.

Just to finish this thread, if the government were to announce a multi-billion pound retraining and job creation scheme to get furloughed employees back into work then my objections to tapering the JRS would be moot. That’s not what we’ve seen so far.