Jonathan Bartley: Here's how the Chancellor can protect Britain from an economic catastrophe.
As lockdown is lifted, so too are the provisions that have protected many millions from economic catastrophe. But in so doing, the government is creating the conditions for a perfect storm which threatens to destroy lives and livelihoods in a way we haven’t seen for decades, possibly generations.
Even the new rescue package for the UK’s arts sector, while welcome, does not do enough for freelancers and the self-employed who face seeing very little of the money promised to institutions. While the government tries to convince us that the worst of the health crisis is over, it’s clear that the economic crisis is only just beginning.
In two days last week, 12,000 people saw their jobs vanish, after the government closed the furlough scheme to new applicants. This was followed by thousands more. Last Tuesday the suspension of benefit sanctions ended, kicking yet more people when they were already down. A senseless act at a time when jobs will be harder to come by than ever before, and one which is likely to cost money, not save it.
There are far more dangerous cliff edges near us. The self-employed, many in creative industries and the gig economy, are being given their “final” payment in August. At the same time, the state wage guarantee will fall from 80% to 60%, with employers expected to top up the rest. With parts of the economy shut down for months, it’s hard to imagine where companies will find the cash. The scheme ends altogether in October. What then?
For the half million renters who currently owe their landlords at least one month of rent, an eviction ban has been put in place. This was welcome respite, but landlords are poised to swoop in and kick people out once the second the ban is lifted, also at the end of August. The sticking plasters are coming off.
This is not the situation we should be in after 100 days of lockdown. Not only has the government failed to use that time to put into place anything like a “world beating” track and trace system which would help us get through and emerge from this crisis, it has failed to build a social security system which recognises the reality of the new world we inhabit.
What’s needed now
We have already proposed a real Green New Deal to create millions of new jobs and enable us to build back better. But any recovery will take time, and we must have action now to put in place the protections and support that people need.
Last week, I published a plan to make sure that nobody is left behind in this crisis. It outlines how we can reimagine our welfare system to ensure that no one is left destitute. From scrapping waiting times for benefits, to forgiving rent arrears, I believe it is the blueprint for a better future.
The most radical idea is universal basic income; payment from the government, directly into your bank account every month, with no strings attached. At the beginning of the crisis, 500 academics said that people should get £1,000 a month. With mass unemployment on the horizon, the threat of local lockdowns for months to come, not to mention a potential second wave, basic income is surely an idea whose time has come.
The government has the bank details of almost everyone. By cutting the red tape of means testing and sanctions (isn’t this government meant to love stripping red tape?) money could be in people’s accounts within days. For thousands if not millions, this could be the difference which puts food on plates and keeps roofs over heads.
The Conservatives resisted the idea of a basic income because they knew that it would be difficult to remove once the crisis was over. But just 6% of us want to go back to how things were before the crisis. And is it any surprise? 14.5 million of us were living in poverty before lockdown. Is that what we want to go back to when we have the chance to build a new social settlement?
Between the cracks
The current welfare system simply isn’t fit for purpose. It is complicated, designed for a different age, and allows too many to fall through the cracks. Last Tuesday, the day that the Prime Minister made his “New Deal” speech, the Department for Work and Pensions sneaked out its annual report
It revealed that benefit claimants had been underpaid by £2bn, with the most severely hit group being those who claim Personal Independence Payment (PIP) – the replacement for Disability Living Allowance.
At the same time, a record £4.6bn was made in overpayments, meaning that the government will now have to try and claw back billions from the country’s poorest in the middle of an economic crisis – largely as a result of the shambles of Universal Credit. We need a better system.
We must also look beyond the current crisis. Many jobs will go. But if we are to transform our economy to meet the challenges of the climate and ecological emergency, we know that our economy will have to change drastically. We will need to create millions of new green jobs. And we will need to protect people through the transition.
Back in March, the Chancellor said that he would do “whatever it takes” to protect people. Why limit that ambition to this pandemic?
The key measure of success of any economy in the 21st century should be that it gives everyone enough to live a good life within planetary limits. A basic income won’t just get us through this emergency to come, it will prepare and support us for whatever we face in the months, years and decades ahead.
Cllr Jonathan Bartley is co-leader of the Green Party of England and Wales.
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