Ignoring the Gathering Storm

With 1 in 3 working families a payslip away from homelessness and a wave of layoffs on the horizon, Britain faces a major economic crisis – but you wouldn't know it from the government’s policy response.

Earlier this month, the Chancellor presented his summer statement. Much ink has been spilled over what it contained; but it’s also worth noting what was not included. 

Nothing to ensure support for the millions out of work and struggling to make ends meet, because universal credit is not enough to live on. Nothing to help those who are vulnerable or shielding once the furlough scheme is withdrawn, because statutory sick pay is not enough to live on. Nothing to ensure that those who need to take time off work to self-isolate can afford to do so, because the support available is not enough to live on.

When it comes to what was actually in the statement, and in particular the support for eating out – whether this is the right policy depends on our strategy for tackling coronavirus. Experts including the Independent SAGE group and others have criticised the government’s strategy of controlled spread, and argued for an alternative aimed at elimination, as has been achieved elsewhere.

If this is the right course of action, then Eat Out to Help Out is entirely the wrong approach. Even if the government’s strategy is the right one, the aforementioned lack of adequate financial support for those self-isolating throws any system of contact tracing into jeopardy. If people cannot afford to self-isolate, they will go into work sick, or send their children to school sick.

This is 2020 Britain, where one in three working families are one payslip away from homelessness and nurses are forced to use foodbanks. Where, in the middle of a pandemic, many families are struggling to put food on the table, and a wave of evictions is expected come August. 

No one should be one payslip away from a crisis. No one should have to fear destitution because they’ve been laid off. We need to fix these issues; not because it would be good for the economy, or for the Treasury, or because these job losses are the result of the worst recession in 300 years, though those things are all true. We should fix our broken economy because it’s the right thing to do. 

To understand why, we need to consider the idea of the commons – our land and natural resources, and the knowledge, infrastructure and institutions that came before us. This wealth is part of our common inheritance. We all have a right to share in this wealth, and to be compensated if we are excluded from it. We can either recognise this right, in the form of a social contract, or we can let this wealth be monopolised by some, and consign the rest of society to perpetual precarity.

Recognising and fulfilling this right does not imply any particular type of policy design (though there may be good reasons to prefer some to others) – it could look like the post-war model of wage bargaining, nationalised industries, rent controls and a strong welfare state; it could look like today’s proposals for universal basic income, basic services, a jobs guarantee, democratic ownership, or wealth and property taxes; it could even incorporate elements favoured by the right, like a (regularly renewed) Right to Buy, negative income taxes, or planning reform.

But we do need a social contract of some kind, if we wish to have a society based on anything other than “might is right” and needless suffering. The poverty we see at present is a political choice, not an inevitability.

Our government is failing to invest in the support needed to ensure a viable contact tracing system. Getting coronavirus under control should be our highest priority right now, but it is being put at risk. And the longer we take to get the pandemic under control, the higher will be the cost of dealing with the crisis.

The furlough scheme support starts to be withdrawn at the end of the month, and new projections from the OBR put unemployment at 12 per cent by the end of the year, a level last seen in 1984. If there is a second wave and a second lockdown, it may rise higher still. Our current system is failing those out of work, and without action these problems are only going to get worse.

We can, and should, do better. In the short term, the government must ensure that people out of work or whose businesses are struggling are able to keep their heads above the poverty line, afford basic essentials without becoming ensnared in debt, and be freed from the threat of eviction looming over their heads. In the long term, we should build a new social contract that ensures the right to benefit from the commons is available to all, not just to some.