Boris Johnson faces a crucial political test this week as England’s schools reopen and ministers hope that work patterns will return “closer to normal” after the Covid-19 lockdown and summer break.
The UK prime minister and Rishi Sunak, the chancellor, have implored workers to start returning to city centres and to “safe” offices, fearing that the country is on the edge of an unemployment precipice.
On Tuesday, the government will further wind down its furlough scheme, with employers expected to pick up 10 per cent of their employees’ pay. The programme is due to end completely on October 31.
MPs also return to Westminster on September 1, and Conservatives are expected to relay to Mr Johnson their concerns about a summer of repeated policy U-turns, including over A-level grading.
For Mr Johnson, it is politically crucial that the reopening of England’s schools goes smoothly, allaying growing criticism that he has lost his grip. Reports on Sunday that the Treasury was considering big tax rises on higher earners and businesses has also unsettled Tory MPs.
“People are worried about the quality of the government,” said one Tory MP and former minister, agreeing with a recently expressed view that this was “about the worst government for 100 years”.
Reinforcing the economic recovery is seen as vital for the recuperation of Mr Johnson’s political fortunes, but official figures from Monday last week showed that trains carried only 28 per cent of their normal passenger loads; the figure stood at 45 per cent for buses.
George Eustice, environment secretary, said on Monday that ministers were working “towards getting people back to something closer to normal”.
But Mr Eustice’s refusal to say how many officials had returned to work in his own department — he told the BBC “we don’t have a target” — confirmed the problem facing all employers in a coronavirus environment.
Josh Hardie, deputy director-general of the CBI business group, said remote working for many businesses and employees “has been a real success, and we shouldn’t lose those gains”.
“Yet there is a balance to find as the economy reopens, especially given pressures on city-centre businesses reliant on office footfall,” he added. “Improving public confidence in public transport and introducing flexible season tickets will help people return to their offices. And refining test and trace, coupled with rolling out mass testing, remains urgent, and employers are keen to help reinforce government efforts.”
Make UK, the association of British manufacturers, said getting schools open again “will be one of the final pieces in the jigsaw” in making sure that companies could operate at full capacity.
Meanwhile, business groups are stepping up pressure on Mr Sunak to take further action to contain unemployment this autumn. “The rising costs of the furlough scheme will be difficult for many firms to shoulder,” said Tej Parikh, chief economist at the Institute of Directors.
“To stem a potential tide of job losses, the Treasury should look now to cut the cost of hiring and retaining staff. Reducing national insurance costs should be the place to start,” he added.
However the Treasury is anxious to remind business leaders and MPs from all parties that such interventions will need to be paid for; official forecasts warn that the deficit in this financial year could top £350bn.
Stories in Sunday newspapers about possible increases in corporation tax and capital gains tax — while described by Treasury officials as “speculation” — were seen by some Tory MPs as a warning that a reckoning is coming.