by John Urquhart
The Conservatives claim that their “Winter Economic Plan” includes “targeted support” for “those who need it most”. Unfortunately, while one might imagine this would mean Britain’s poorest, it actually makes more of Britain’s poorest even more vulnerable to bearing the brunt of the outbreak – which they already have done.
Even the language used is deeply confusing. The claim baked into the “Job Support Scheme” is pay of 33%, but it turns out this is in fact 33% of the amount paid out during the prior furlough scheme: the actual figure paid by the Government is 22%. This will result, for some, in top ups around 77%, but less for others – and in all cases less than was the case under the prior furlough scheme.
What’s more, those who have already been excluded from furlough will remain excluded. Nothing useful for the self-employed – indeed, there is a decline in support for them in real terms, as there is from the furlough scheme the JSS replaces overall.
What makes this worse is that incentives for employers to use the JSS are few and far between. Not only does the JSS require employers to pay employees for work they won’t actually be doing, but the JSS fails to incentivise firms to cut hours rather than jobs, because it makes it more expensive for a firm to employ two workers half time than one worker full time.
The scheme is, as you may have already realised, fiendishly complex. This also disincentivises businesses from taking it up, because “complexity” translates to “extra work” for them – again, work hours that they have to pay.
So what exactly is the point of the JSS?
It is fundamentally a scheme to support businesses with less work today (than yesteryear) and already existing strong incentives to hold on to staff (such as skilled manufacturing with high training/recruitment/redundancy costs). The biggest problem with that, of course, is that this group is not the bulk of the jobs in peril – so while this is a “targeted intervention”, the Conservatives aren’t even aiming it in the right direction.
If the Government actually wanted to achieve the goals it has claimed, it would have tailored the JSS to encourage changes to hours rather than job cuts – especially in the leisure and hospitality sectors, where job losses will now, most likely, be very severe in the short to mid term. The effect on quality of life will likewise be significant – not just for workers in those sectors, but their extended communities.
A key problem here lies with the definition of a term used repeatedly during Government signalling on this intervention – that word is “viable”. What are viable jobs? It would appear that in this instance, the Tories hold that low paid jobs are expendable, because those workers “can get different jobs”. This is an absurd misreading of the economy, given that mass uncertainty means there quite likely won’t be different jobs to be had.
This is a grave misstep – both for workers & their families, and for the economy. It is made significantly worse because Conservative Government policy is directly causing some of that instability and uncertainty in the economy – perhaps all of it at the current moment. There could have, for example, been a corresponding announcement on extending the top-up to Universal Credit beyond next April; there could’ve been an extentions of the eviction moratorium for renters. And there could have been announcements of policy to create jobs in an economic pivot as we move further into the depths of this long-term crisis.
But there was none of that.
And worse still, emotively & ethically, there was nothing useful announced for the elderly and disabled either, two groups who have already been cruelly under-protected, despite being the most vulnerable.
And recent announcements have, of course, included no new advice for those who had previously been asked to shield: the last update for them was on September 4th. That update did not urge them to commence shielding again.
The Conservative regime is failing in this crisis but as we’ve said time and time again, this is not incompetence (well, except Boris Johnson, who is clearly incompetent, but also clearly not really in charge of anything). Indeed, this is cruelly competent: the entire plan appears to be to ensure that industries which have individuals who donate to the Conservative Party are conferred a competitive advantage over those that don’t.
That the Conservatives are stubbornly talking about economic recovery as a second wave crashes down onto the British public is yet another clear signal that they are deeply out of touch with the public – as borne out by their poor performance in recent polling.
The cracks are starting to show. But the Opposition, too, does not really Oppose, and so will sooner or later surely be seen to be not equally, but absolutely still damningly complicit in allowing this to all come to pass with barely a whisper outside of the highly performative moments found in PMQs. After all: Labour, too, is currently courting big business, and that means keeping the economy open – and betraying workers as they already betrayed the teaching unions.
This truly is the Winter Economic Plan that isn’t: at least, it isn’t a plan. It will however surely bring winter to the economy.