Financial Support in a Crisis

The new Treasurer, Rishi Sunak has truly risen to the unprecedented challenges that we are faced with today, there’s no question about it even if like me there are some things that you would have hoped that he had and ultimately will do differently. 

There are those that say that the plans have been put in place to transform us from capitalism. However, I believe that in many ways, it’s still embedded in the principles of capitalism with the pragmatic steps needed for the times we are living in which has meant stretching the boundaries of the system close to the limit. 

It’s against this backdrop that whilst grants are being made available to businesses, they are also providing them with loans and for that matter loans that come with interest. The stark nature of the situation that we are faced with means that the Treasury has had to go further, providing support in paying 80% of employees’ salaries up to ￡2,500 a month for employees who are furloughed rather than having their roles made redundant. This means that when things pick up again, organisations will be better able to mobilise and start again. What we don’t know is how long we will be in this situation for and therefore how long the government will end up paying employees for. 

One thing that strikes me about the process is that none of the furloughed employees will be working, however, they are receiving different amounts of money for doing the same amount of nothingness. The logic behind this reminds me of a conversation I had with a Senior Manager going on maternity leave who expressed the opinion, that instead of statutory maternity leave, employees should be paid maternity leave on the basis of their actual salary as it would provide them with the standard of living that they are used to. I pointed out to her that if you are in a senior position, you are in a much better position to save/have the savings to cover the costs of just being paid on maternity pay than someone on a lower/minimum wage salary who is likely to be just about making ends meet. The same principle applies with the 80% payment of salary which employees have not had the opportunity to prepare for.

A similar if not deeper concern applies in relation to the limited supported being offered to the self-employed as those on zero-hour contracts and other insecure positions, who are less likely to have prepared and had the savings to cover the costs for the period we are going through. A Government Minister stated that it is too complex to determine how to make payments to support the self-employed. I agree that it is complex – most especially if it’s to be based on earnings or means-tested; the earning of a self-employed period fluctuates over time with periods without any income at all such that it may be difficult to determine what regular earnings are. 

I’m also struck that at a time when we need the whole of society to pull together, the focus is on the employed without the recognition that now more than ever we need people who will serve as carers and volunteers within society; to provide the support to enable things to run as smoothly as possible within civil society at a time when children are at home and others may need support in varying ways and forms.

This is all informs why I still believe that a Universal Basic Income (at least to those in need) is still the most appropriate approach to supporting people through the situation that we are currently faced with; most especially if it lasts for a prolonged period.

#Selah

Susan Popoola

Developing a Mosaic World

#CoronaVirus #Pandemic #UniversalBasicIncome #SelfEmployed

This is a follow up to my earlier article, "If Money Was Not an Issue". Ref: https://www.dhirubhai.net/pulse/money-issue-susan-popoola/