Thursday 26 March 2020

Coronavirus: Why Tory Support Falls Short

At last, Rishi Sunak has announced a package of measures designed to support the self-employed during the Coronavirus crisis. Mirroring the employers' subsidy to support workers' wages, Sunak is promising up to 80% of taxable profits to a maximum of £2,500/month for three months - but this is available only to those who make less than £50k, and the majority of their money has to come via self-employment. This, apparently, is the most generous scheme available for the self-employed in the Western world. Though, as you might expect, there are problems. The main difficulty is how payments will not be available until June, which begs the question of how folks in this category are supposed to survive if, like the average punter, they have next to no savings? And this scheme does not apply to the recently self-employed because there's no previous year of tax returns available to calculate entitlements. All there is for them are the eternally long phone queues of the Universal Credit hotline.

A couple of things. Firstly, do not underestimate how difficult this was for the Tories to put together. While the old adage that putting power before principle is quintessential Toryism in practice, junking the junk of Thatcherite common sense and effectively making the state the underwriter of a very sizeable chunk of the workforce grates against every political instinct Sunak, Boris Johnson, and the rest of them has. Coronavirus has demonstrated in practice that many of the "tough choices" pursued by Tory governments past were just that, choices. The whip hand of economic necessity had nothing to do with them. Quite how then the Tories are going to extricate themselves from this remains to be seen, but whatever happens Johnson has previously proved himself adroit in handling one tricksy set of circumstances. I'm left wondering if his coming opposition will prove as equally deft footed.

The second point is bound up with the post-Corona "peace" the Tories wish to strike. Amid the bail outs and income guarantees, most comment on and analysis of Sunak's programme is simply not serious. I've seen some on the left claim to have discerned "socialist values" among the measures taken. You have sundry centrists fantasising about a Sunak-led Tory party, all because he sounds like a marketing manager trotting out pre-prepped corporate lines. The only serious comment comes from the right of the Tory party, who are broadly supportive of Johnson's strategy because he's doing what it takes to save their system. And, of course, the left who have highlighted the class politics of the whole shebang. And that lies in preservation or, if you like, conservation. The clue is in the party name.

From Sunak's first bail out for businesses through to today, he has resisted measures that break income from work, whether employed or self-employed, or the existing meagre support available via social security. For example, Sunak's excuse for not coming up with today's announcement sooner was because of the "complexity" of the system, given that we're dealing with millions of people in very different circumstances and with varying levels of income from month to month. The obvious solution then, if we're thinking about it in a straightforwardly managerial way, would be to command the helicopters to drop parcels of money. A living citizen's income at a flat rate for everyone would eliminate the complexity at a stroke. But we can't have that because it strikes at the wage relation. Capital needs bodies who are compelled to sell their time, otherwise no capitalism. Employers would be hard pressed to find workers who'll scrape by on their pittances, or put up with employment contracts, such as zero hours contracts, if another source of income is available. Coming out of a crisis where the state is effectively the economy, going back to how things were before will be difficult enough, even if they were beginning to be characterised by a Tory Keynesianism. Making support available only through employers, taxable grants, loans, and the punitive benefits system is a design contrived to resemble, as close as possible, the income streams of normal times. Which, ultimately, makes the return to normal much easier.

In short, the support the Tories have made available is welcome. But it does not go far enough - the three month wait, the lack of clarity about short-time workers, no help for renters, the cut to people's incomes - in some cases, catastrophically so, the fact some "non-necessary" workers are still compelled to go to work, these "blind spots" are nothing of the sort. They're inevitable when the preservation of class relationships comes before the preservation of living standards and people's wellbeing. The health most concerning to the Tories is that of capital.


Dipper said...

Meanwhile Bernie Sanders is holding up Rishi Sunak as the example to follow.

There are two sorts of (political) people right now. Those who think the financial packages show Socialism can work, and those who think this is necessary but is going to make for a very painful unwind for years, possibly decades, afterwards.

Money has to mean something. It has to be a measure of time spent, of work done, of value generated. Otherwise it is just monopoly money which ultimately is worthless. So I'm in the second camp.

Braingrass said...

That is not what money means Dipper. Can I suggest you read Ingham's THe nature of Money. It is not measure of time spent, value or work done. By the way even Marx didn't think that. Here's the link to his book

TowerBridge said...


This isn't a dichotomy:

"There are two sorts of (political) people right now. Those who think the financial packages show Socialism can work, and those who think this is necessary but is going to make for a very painful unwind for years, possibly decades, afterwards."

"those who think this is necessary" = demonstrably people who think it can work because if they didn't think it would work they wouldn't think it was necessary. Quite the opposite.

I'd guess you are personally going through a bit of a struggle and you are looking for anything that supports your viewpoint, such as the rather weak suggestion that Bernie supports Sunak.

You are trying to hang on to the idea of no or little state involvement in the economy but you are seeing it now as necessary. There aren't two politics people as you suggest. Everyone I can see is seeing that intervention is required, in fact I would ask if anyone is arguing anything less. Keynes, once again, is coming to the fore.

You must surely also seeing how stupid and reckless austerity was as it's left us without the slack in the system.

Given the evidence, your views and opinions should be changing. I wouldn't have bothered but for (presumably) surprise (to me) comments about intelligence on Chris' blog. I.e. that it is not possible to measure and is quick.

Would your attitude towards state involvement be summarized as "can't live with it, can't live without it, don't want to pay for it"?

Anonymous said...

I think recent events have exposed how lacking many of our leading politicians are in all parties alas. Our perception of leadership, or of what we want it to be has not been fulfilled, and for a short period we see the reality and not the image or the ideology. We value what is of value. Our NHS staff who have worked hard for years to develop their skill. And we thank them, and the others on the front line who fight not for themselves.

Dipper said...

@ Tower Bridge - as I like to say to my ultra-Free market Thatcherite friends, you like the state well enough when it's enforcing your property rights.

I don't have any problem with the steps Sunak is taking. I think a properly functioning society looks after people in need. Sunak can do this because of 'Austerity', because the economy had been got to a point where the deficit was containable. I suspect we are about to find to find out why money-no-object socialism is a really bad idea.

Conservatives prefer free markets and private industry to the sate because, properly constructed, free markets and private enterprise encourage innovation and efficiency, and give freedom to all to develop their talents. State domination ends up being about connections and coercion. Just look at the web of connections at the top of Labour.

We have already seen Victoria Park in Hackney shut and other parks shut leaving the populace to jostle next to each other on roads on their daily exercise, and police forces issuing forms for spying citizens to shop their neighbours. These steps are entirely typical of authoritarian states exercising power for its own sake. The virus likes close contact, lives on surfaces, doesn't like UV light. Going to parks is absolutely the right thing to do. But here comes big state stopping helpful activities not because stopping it is good but because they can.

David Parry said...


'free markets and private enterprise encourage innovation and efficiency, and give freedom to all to develop their talents.'

1) There's no such thing as a free market.

2) I think that any kind of any kind of authoritarian structure, private or state, tends towards the opposite of all to develop their talents, by stifling the creativity of the mass of the population and reducing them to cogs in a machine.

'State domination ends up being about connections and coercion.'

1) I reject the idea that private enterprise is any different to state enterprise in terms of being about connections and coercion.

2) Private-enterprise capitalism can't exist without state domination, as you yourself have acknowledged.