We are in the midst of what could be an unprecedented crisis. The crisis has been precipitated by the outbreak of coronavirus. But the public health emergency has been worsened by under-funded public services, fragmentation in private sector delivery of essential needs, the rise of insecure work, and an economy that has been fundamentally weak because of ten years of Tory mismanagement.
The government has been slow to respond to that emergency and when it has acted it has not acted boldly enough. We are engaged in discussions with the government in good faith and we will continue to put forward policy proposals that we hope will strengthen their response.
But let’s be honest. The government should not have waited over six weeks after the first coronavirus cases were reported in January, and when there was widespread concern over the outbreak’s economic impacts, to announce an economic package in the budget in March.
The government’s budget package was, unfortunately, too vague, full of holes, and insufficient. The Chancellor recognised that six days later when he came back with further measures earlier this week. But his additional announcements largely focused on loans and guarantees for business. By failing to tie loans and guarantees to undertakings that no one would be laid off, he missed another opportunity to protect workers and vulnerable people.
For three weeks now we have been pressing for a bold economic response to protect workers and the broader economy.
We have called for action on utility bills, measures to protect renters, an end to evictions, the requisitioning of private hospital beds, international coordination, equity stakes in any government support to business, and a readiness to insource services.
We have also tried to draw attention to groups that will be particularly affected by the coronavirus outbreak, and who appear to have been ignored by the government. Groups like insecure workers, rough sleepers, people in prison, people who might be adversely affected by self-isolation, migrants, and people who cannot easily work from home. All of this has been done alongside Jonathan Ashworth’s work to scrutinise the government’s plans on testing, social distancing, and public health funding.
Yesterday, to add to all this, we set out a specific package to protect wages, wellbeing, and welfare.
We described in detail a progressive plan for the government to underwrite the jobs of workers at risk of being laid off or temporarily out of work.
Drawing on models already announced in Denmark, New Zealand, and Austria, we called for the government to pay 90% of low earners’ wages, 85% of middle earners’ wages, and 80% of high earners’ wages, with the employer paying the remainder of wages and a cap applying on compensation for high earners.
Under the plan money is paid directly to workers, using existing departmental transfer mechanisms. In New Zealand, the DWP equivalent has been repurposed for similar transfers. In return for government support, employers guarantee no lay-offs. We also want all recipients of government loans and loan guarantees to make similar undertakings that no one will be laid off. This is not the time for no-strings-attached bailouts.
The plan applies to workers in companies facing redundancies or revenue losses. It covers all workers including the self-employed, and carers out of work because they have to look after people usually looked after by facilities that have now been closed.
This plan reduce costs for business without depleting the tax base. It encourages businesses to safeguard the jobs of all, in particular low-paid workers. And it provides assurance to workers facing significant anxiety and stress right now.
It would be wrong to cut taxes now, or to loosen regulation, at a time when we need all the revenue we can get for the Exchequer and careful action by all, including business. These kinds of moves could also endanger the funding of our public services in the future.
It’s true that we want to encourage people to stay at home and self-isolate, where that is possible. We are seeing images of over-crowded public transport not only because the government has failed to communicate how the public should respond to coronavirus, but also because the government has not provided the economic security that enables people to stay at home.
To address this we have also outlined urgent reforms to Statutory Sick Pay. The government has said it will cover costs of Statutory Sick Pay for SMEs for 14 days for those sick and self-isolating. But, as even the Health Secretary has now been forced to concede, Statutory Sick Pay is not enough to live on, at £94.25 a week for those without an occupational sick pay scheme. It’s not available to low-paid earners, it’s not guaranteed to zero-hours contract workers and part-time workers, and the self-employed can’t get it.
We propose lifting the level of Statutory Sick Pay to a level that people can live on and widening access to it. There should be no Lower Earnings Limit for Statutory Sick Pay. Insecure workers should have Statutory Sick Pay, guaranteed by the government. And self-employed people deserve equivalent compensation, paid through the mechanism set up by the Government to cover Statutory Sick Pay costs for SMEs.
The government’s delays have meant that some people sadly have already lost their jobs, and there is also an urgent need to provide more support for individuals in this category. That means increases to Universal Credit, as well as Jobseeker’s Allowance, Employment and Support Allowance, and Carer’s Allowance.
We also recommend changes to Housing Benefit, as well as action on rising debt and bailiff proceedings. The five-week wait to receive Universal Credit is unacceptable, as is the ongoing use of sanctions, and the advance payments currently made as loans for Universal Credit recipients should be made non-repayable.
Finally, in the context of workers’ wages, wellbeing, and welfare, we query whether the government’s plans announced for business go far enough. We are concerned that the existing package leaves many small and micro-businesses unprotected and also puts workers at risk, by neglecting sectors, restricting grants, and creating problems of delivery.
The government has said it will provide some kind of package of support today. That package must be delivered urgently and at scale.
And as we seek to protect incomes we should make sure we avoid entrenching existing injustices, such as in our Statutory Sick Pay system.
The government must design a support package in a way that responds to the pressing needs of today. But in any income protection package it must also learn the lessons of the last ten years, and lay the foundations for a better society once we have got through this period of crisis.