Rishi Sunak was quick to renege on the promises made by the Job Retention PolicyPHOTO CREDIT: POLICY EXCHANGE, FLICKR

Rishi Sunak, Chancellor of the Exchequer, is already retreating from his promise to “make sure nobody is left behind”. He recently conceded that the Job Retention Scheme, which he has been widely celebrated for, is “unsustainable”. Talks about downsizing the support available for businesses and individuals are already underway, merely weeks after they have been put in place. It is unacceptable to entertain the idea that withdrawing the buffer between citizens and the devastating financial consequences of the pandemic is a feasible solution to the economic consequences of the crisis.  

"There are several reasons why the government’s scheme does not signal an enduring commitment to systemic change."

Many may view the Chancellor of the Exchequer’s scheme as marking a necessary reversal after decades of austerity policies. Sunak declared a new budget at the beginning of March which equated to the greatest rise in public borrowing for more than three decades. As the true extent of the coronavirus emerged, the government rolled out further measures to protect more than 6 million British jobs from the impacts of the national lockdown.

Yet, this is far from a true rehabilitation of the social ‘safety net’ - a safety net  progressively eroded by protracted cuts and freezes to social transfers and public services under the guise of ‘welfare reforms’. There are several reasons why the government’s scheme does not signal an enduring commitment to systemic change. First, it is a short-term strategy that the government was practically forced into in order to prevent sudden, widespread unemployment. Governments all over the world have taken immediate, unprecedented measures to shut-down large sections of the economy and provide financial aid to affected citizens. Secondly, the scheme itself fails to protect some of the most vulnerable people in society such as those in precarious forms of employment like seasonal workers. Finally, and most importantly, Sunak now appears to be backtracking on the very scheme he was lauded for.

The Job Retention Scheme was initially designed to preserve jobs until the economy bounced back. As it becomes increasingly clear that it will take months for some sectors to operate at pre-crisis capacity, and some businesses will never recover, the scheme is being “adjusted” to reflect this harsh reality. In other words, ministers have begun discussing the ways in which the scheme may be scaled down to reduce its impact on the budget deficit. 

Considerations include potentially lowering the £2,500 cap on monthly payments and restricting self-employed workers with trading profits of more than £30,000 from claiming grants – a £20,000 decrease from the current cap. Ministers are also discussing slashing the wage subsidy from 80% to 60% for employed workers. For the national economy, this reduction could mean the difference between an economic slump and an economic crisis, according to the Confederation of British Industry. For individuals, such a reduction could be enough to push some low-income families into food poverty or homelessness. 

"A rationale which equates worklessness with idleness is obsolete..."

Whilst the economic consequences of a scheme that is costing the government an estimated £12 billion per month is a valid topic for debate, we should be critical of the ways in which the proposed roll-back of employment protections is being politically framed. Crucially, senior government officials have told The Times that the public risks becoming “addicted” to government support and need to be “weaned” off of it. This justification is merely a continuation of the long-standing, paternalistic discourse surrounding austerity. The welfare dependency rationale, which has been invoked time and time again by successive Conservative governments, portrays unemployment as a choice made by unmotivated individuals and erases the socio-economic and political factors which underpin an out-of-work status. Framing furloughed workers as being ‘addicted’ to state support is particularly ironic under the current circumstances as it was the state itself which has made the (correct) decision to put jobs on hold. As always, the phrase ‘austerity’ will not be used. Instead, Boris Johnson’s government will likely be praised by members of the elite for its ‘fiscal responsibility’. 

Rolling back employment protections at this time could result in catastrophic levels of redundancies and wage cuts. The burden of cuts to state support would not be carried equally. The working class, and particularly low-income, minority and vulnerable groups will feel the cost of the cuts disproportionately. During a crisis which has highlighted the importance of public services and ‘key workers’ – a group which is largely made up of low-paid and undervalued employees – surely the detrimental impacts of austerity are starker than ever.


Mountain View

Essential workers deserve more than just our platitudes

The unpalatable truth for the government is that saving the lives and livelihoods of millions of people requires the end of austerity as a discourse and practice. A rationale which equates worklessness with idleness is obsolete in a world where millions are both legally required and morally inclined to stay at home in order to save people's lives. 

Praise for the government’s attempts to preserve jobs and protect the economy comes too soon. We must be wary of efforts to withdraw support at the earliest opportunity and frame those who accept such support as work-shy dependents who must be “weaned” off of it for their own good. The solution is clear. Accept that austerity does not work and tax the wealthy to ensure the most vulnerable, and those who have upheld our nation at a critical time, do not have to suffer.

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