The Times - UK (2020-11-26)

42 2GM Thursday November 26 2020 | the times

Business

Business groups gave a lukewarm
welcome yesterday to the chancellor’s
spending review, which included
measures such as a new national infra-
structure bank, funding for innovation
and investment in helping the unem-
ployed back into work.
The CBI said that Rishi Sunak had
balanced his “stark forecasts” of the
long-term costs and economic scarring
from the coronavirus with plans to “lay
the foundations for a brighter eco-
nomic future”.
As Mr Sunak warned that the
“economic emergency” caused by the
pandemic had only just begun, Rain
Newton-Smith, chief economist at the
CBI, said that the chancellor had “made
some bold autumn decisions to power a
spring recovery”.
The business lobby group said that

Bold plans in spending review but

we need action, say business chiefs

James Hurley Enterprise Editor with the right remit, a national infra-
structure bank had the potential to
attract the private finance that was
needed to upgrade roads, improve
broadband and invest in clean energy
projects. “But ambition must be
matched by action on the ground,” it
said. “The government’s commitment
to build, build, build must be delivered
now.”
Michael Watson, partner at Pinsent
Masons, the City law firm, said that to
be effective the infrastructure bank
“cannot simply be treated as a replace-
ment” for the European Investment
Bank after the Brexit transition period
ends. The British Chambers of
Commerce said that the bank would be
an important step in overcoming the
nation’s “longstanding infrastructure
deficit”.
However, the Federation of Small
Businesses said that the review was a

“missed opportunity” to help smaller

employers to help an economic

recovery. “A government which claims

to be pro-enterprise had very little to

say about the importance of business

and private sector job creation,” Mike

Cherry, its national chairman, said.

Jonathan Geldart, director-general

of the Institute of Directors, said that

the review provided a “sobering view of

the challenge ahead, and funding for

infrastructure and skills will be crucial

to meeting that challenge.

“Just as significant was what the

chancellor didn’t announce. Business

leaders will be relieved that the

Treasury is resisting the temptation to

hike taxes on enterprise for now, but

will be concerned that Brexit didn’t

merit a mention.”

Darren Jones, the Labour MP who

chairs the business, energy and indus-

trial strategy committee, said that Mr

Sunak had “missed the opportunity to

spell out more targeted support for

sectors such as hospitality who con-

tinue to bear a terrible strain”.

Adam Marshall, director-general of

the chambers of commerce, said that

the government must “waste no time”

in implementing plans to limit long-

term unemployment.

Under the £2.9 billion Restart

scheme, people who have been out of

work for more than a year will be given

regular, tailored support to help them

to find a job. Kirstie Donnelly, chief

executive at City & Guilds, the training

provider, asked: “If it’s going to be

crunch time for unemployment in

six months, can we afford to let people

wait twelve months before giving

them the support they need?” She said

that the Restart programme felt

“backward-looking in scope”.

Leading article, page 33

America’s most closely watched
unemployment indicator has flashed
red for a second successive week as
rising coronavirus infections hamper
the labour market recovery.
New claims for unemployment
benefits, a proxy for job losses, climbed
to 778,000 last week from an upwardly
revised 742,000 the week before, a
report by the Department of Labor
showed. Economists had pencilled in a
drop to 730,000.
The figures meant that new claims

US jobless rate climbs higher in ‘two-tier recovery’

remained above the pre-pandemic

record of 695,000. They have been over

that level since rising to nearly seven

million in the last week of March, the

worst week on record. In February new

jobless claims were at 210,000 a week.

Ian Shepherdson, at Pantheon

Macroeconomics, the consultancy,

said: “The labour market is deteriorat-

ing again in the face of the Covid third

wave. We expect claims to keep rising

for several more weeks because people

are retreating from social interactions

and state and local authorities are

adding restrictions to dining and other

indoor commercial activity across the

country.” Wall Street had a mixed ses-

sion. The S&P 500 index, which hit a

record high on Wednesday, closed

down by 0.2 per cent, or 5.76 points, at

3,629.65 but the Nasdaq rose 0.5 per

cent to a new record high of 12,094.40.

The jobless claims report was one of

several to be published early before the

Thanksgiving Day holiday today.

Other reports painted a mixed picture

of the economy.

Third-quarter growth was a record

33.1 per cent year-on-year, the com-

merce department said in its second of

three estimates. This was unchanged

from its first estimate. Consumer

spending, which accounts for about two

thirds of the US economy, climbed by

0.5 per cent month-on-month in Octo-

ber, more than the 0.4 per cent gain

forecast by economists.

Chris Rupkey, an analyst at MUFG

Union Bank, said: “There is a two-tier

recovery from the pandemic recession,

where the top of society continues to

spend as normal while the bottom half

of the country sits in long lines at food

banks with the opportunities for em-

ployment few and far between.”

James Dean US Business Editor

IBM cutting

a fifth of its

Europe staff

Tom Ball

About 10,000 jobs are set to be cut by

IBM across Europe, with up to 2,000

roles in Britain and Ireland at risk.

The job losses, which are understood

to affect around one in five staff in the

region, are part of an attempt to lower

costs at the company’s services unit,

where growth has been sluggish, and to

prepare the business for a spin-off.

Britain and Germany will bear the

brunt of the cuts, with staff in Poland,

Slovakia, Italy and Belgium also in line,

sources close to the matter told

Bloomberg.

IBM, which was incorporated in 1911

and is one of the world’s oldest com-

puter companies, employs more than

352,000 staff in 170 countries. Last

month, it said that it woould be splitting

into two public companies, to diversify

away from its legacy businesses and

focus on cloud computing.

It has said that it will list its IT infra-

structure services unit, which provides

technical support for 4,600 clients in

115 countries, as a separate company

with a new name by the end of 2021.

A spokeswoman for IBM would not

confirm the number of job losses.

However, Channel Partner Insight, an

analytics firm, claimed that up to 2,000

jobs in Britain would be lost.

“Our workforce decisions are made

to best support our clients on their

journey to adopting an open hybrid

cloud platform and AI capability, and

we are reinvesting in our business,” a

spokeswoman for IBM said.

The shares were 45 cents, or 0.4 per

cent lower, at $123.97 by lunchtime in

New York yesterday. They have

declined by 8.6 per cent this year.

ALAMY

P

eople looking for

jobs are better off

doing so in

Manchester than

in London, according to

research that ranks

cities around the world

based on their

employment prospects

(Tom Ball writes).

Taking into account

work opportunities,

unemployment rates,

average pay and relative

living costs, Manchester

scored highest in

Britain.

The city has 16,053 job

openings and a strong

cost of living-to-earnings

ratio, with the average

rental cost of a two-

bedroom flat accounting

for 24 per cent of

average monthly pay,

according to analysis by

Adzuna, the job search

engine. In London the

cost of renting a two-

bedroom flat equates to

43 per cent of the

average monthly salary

of £3,734.

Britain fared poorly

on the world stage.

Manchester was ranked

22nd behind cities such

as Paris, Hamburg and

St Petersburg, which

was placed top. It was

ranked above American

cities such as New York

and San Francisco,

where rental costs eat

up 56 per cent of

monthly earnings, and

Los Angeles, where the

figure was 73 per cent.

Manchester’s

economy has thrived in

recent years in part

thanks to its reputation

as a hub for fast-rising

companies such as The

Hut Group and On the

Beach. The city

attracted $687.6 million

in venture capital

investment last year, up

from $199.1 million in

2018, according to data

released this month by

the Office for National

Statistics, placing it

ahead of Cambridge for

the first time. In terms

of attractiveness for

technology investment,

it now sits behind only

London.

Despite scoring poorly

overall for its benefit to

jobseekers, London was

ranked fourth in the

world in terms of job

opportunities, with

101,217 advertised

vacancies on offer,

behind Moscow, New

York and St Petersburg.

Andrew Hunter, co-

founder of Adzuna, said

the pandemic meant

that jobseekers no

longer needed to live in

the city where they

worked, possibly

triggering “a mass

exodus” into cheaper

areas. “Despite the draw

of opportunities, a brain

drain is a very real

threat to cities like

London, San Francisco

and LA,” he said.

Why it pays to seek

a job in Manchester

Busines

k

Manchester’s burgeoning reputation as a technology hub led to the city attracting more than $680 million in venture capital funding last year