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School closures in the UK are a financial catastrophe for poorer families | Torsten Bell | Opinion

These are grim times, but there are still moments to take great heart from. Cycling home last night at 11pm I passed a local school and a headteacher heading back into work. Her part in our national fight was to prepare her school, her teachers and her pupils for the huge change that the government had just announced – the closure of all schools in England from Friday afternoon, following similar announcements in Scotland, Wales and Northern Ireland.

That closure is going to be a huge challenge for all parents and schools. But it will be much more difficult, and much more expensive, for some parents than others. This is part of a bigger point that is getting lost amid the noise – poorer families and lower earners will be hit hardest and fastest by the economic shock brought on by coronavirus.

As schools close and children head home, parents will rightly be thinking how hard the coming weeks and months will be. Even those not working will share the worry that we are not all natural teachers fit for this period of home schooling. Simply entertaining will be hard when playgrounds, soft play and the rest are out of bounds.

But for working parents this is a massive challenge. For some this will mean the inconvenience of desperately trying to work from home without totally neglecting your kids. For many professional workers it will see priorities juggled, tempers tested, but crucially no major loss to income. Work can be moved, and working patterns can shift to early mornings and late nights.

But for many others this isn’t inconvenient, it’s catastrophic. By no means everyone can work from home; and it’s as simple as, the less you earn, the less likely you are to be able to. Less than one in 10 of the bottom half of earners say they can work at home, while half of the highest earners can do so. For most low earners, not working means not earning – with the usual options of involving grandparents or sharing the loads with other parents off the table.

The economic impact of schools closing is just the latest step in the very unusual nature of this crisis – with economic shocks driven by steps we are taking ourselves. It is crucial to recognise that the majority of this economic damage will be caused not by the direct impact of coronavirus itself, but by the necessary measures – such as social distancing – that we put in place to respond to it.

And stepping back to take those measures in the round, it’s lower earners hit hardest again. The sectors already heavily affected by social distancing have typical weekly pay of £320, compared with the national average of £455. The likes of retail, hospitality, travel, cleaning and arts and entertainment are not high payers, but are where 5 million employees and 1.2 million self-employed people work. These include 2 million of the lowest earners who lack entitlement to sick pay. Those in the most at-risk sectors and occupations also have less to fall back on, being 25% more likel than the average worker to have no savings at all.

So what is to be done? Statutory sick pay must be extended to those earning less than £118 a week immediately. But more radically we need to help struggling firms and reassure families about their incomes, to stop this crisis being much deeper than it needs to be. That is best done with the introduction of new statutory retention pay, in which people who don’t have work to do stay formally employed by their firm with the state ensuring they still receive at least two-thirds of their normal wages.

Even if we do these things, unemployment will rise, something for which we are ill prepared. The main rate of unemployment benefit is lower in real terms than in the early 1990s, despite our economy being 75% bigger. This must be increased to £100 a week as soon as possible.

As we all listen to the headlines of school closures, and as policymakers urgently rush to put together an economic response to match the grave challenge we face, let’s not lose sight of who is most at risk. While the virus might not discriminate between rich and poor, the economic shock certainly does.

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