Tuesday 5 May 2020

Why do the Tories Want to Cut Furlough Payments?

And so we read Rishi Sunak is actively considering cutting furlough payments to staff. Instead of covering 80% of the wage bill up to £2,500/month one option in front of the chancellor is reducing it to 60%. After pledging there was to be no sudden cut off to the scheme, thereby giving business a soupçon of certainty in these most uncertain times, this utterly ridiculous idea ramps up the anxiety for millions already hard pressed by having a fifth of their income disappear. Surely there's more to it than this, surely our touchy-feely consensus-happy Tories couldn't be so crass?

Speaking on ITV last night, Sunak said the government would not continue spending as much on the furloughing scheme "without changes" to it. "We've got to ease people back to work in a measured way", which is sort of difficult for as long as a potentially deadly virus stalks the land. But if we've learned anything about the Tories over the last 10 years, things like facts and premature deaths tend not to unduly bother the Tories. According to the Evening Standard, reducing payments is a "leading option" so people become gradually worse off by design. To what end? To encourage people to look for new jobs. Incredible.

Despite Boris Johnson ruling out renewed cuts, the fact this dog's dinner is a frontrunner is the Tories flashing their ideological teeth. Remember, for whole swathes of establishment opinion unemployment is not caused by, well, a lack of jobs. Rather it's a case of welfare entitlements being too generous. Without a shred of evidence, it is assumed social security pushes up the value of labour. I.e. the existence of a pitiful floor of £58/week for 18-24s and £73/week for the over 25s means the jobless are put off taking low paid work because life is peachy drawing them benefits. The fact the number of unemployed, even in the supposed good times, always outnumber available vacancies shows this up for the utter bollocks it is. But you can see the logic of this assumption playing out in the coming attack on the furlough scheme. Workers sat at home doing nothing, drawing 80% of their salary without having to work, living off unearned money is fine and dandy for the owners of capital but definitely isn't for those of proletarian stock. It has an effect of distorting the labour market, of preventing the normal churn of job change and leaving those vacancies in the fields unfilled. It's as if Sunak is trying to drive down living standards of furloughed workers to force a rapid restructure of the labour market.

The furloughing scheme was set up with two purposes in mind. To prevent the transmission of Covid-19, obviously, and preserve capitalist relations of production. In other words preserve the power relationships and structures of authority the so-called free economy depends on. This is why Sunak followed the French furlough scheme as opposed to an emergency basic income (itself not without difficulties): the state is stumping up the readies, but is doled out through employers thereby preserving the wage relation: the relationship absolutely central to capitalism and its class system.

But what about the debt the state is chalking up? We can't afford the scheme indefinitely, can we? Actually, we can. To all intents and purposes the government have stopped borrowing on the markets and is now being funded directly by the Bank of England courtesy of printed money. Because the government owns the Bank, it can determine the length of debt repayment, the rate, and whether it should be "repaid" at all. Why this won't result in PPE-equipped members of the public heading to the supermarket with wheelbarrows of cash is because the global economy is deflating. Thanks to stagnant wages, the legacies of austerity, and the massive hit to ordinary people's spending power there is a lack of money circulating around the real economy. Therefore their reluctance to carry on as they are isn't about fearing inflation. The problem the Tories have is their "tough choices", which were in fact easy choices considering it wasn't Tory voters old and new who tended to shoulder the burden, are shown up by their actions now to have been completely unnecessary. The worry is the public might notice and not swallow their nonsense about paying down the debt, or won't accept their excuses about why the NHS can't be funded properly, or homeless people taken off the streets. In other words, their measures are a far cry from neutral, managerial responses to an unprecedented crisis: they are playing (class) politics.

The Tory preparedness to terrify and immiserate people, wrapped up in cod philosophies and supposed economic orthodoxies condense the class instincts of their party. Ultimately, the reason why the Tories win and win again is because when they have the upper hand they happily use the full power of the state and their media to not just attack the opposition, but disorganise the grounds for it. While workers are atomised at home scaring them with more hardship is likely to dampen opposition to a hastily-organised and fudged return to work. After all, the country can afford only so much support. This then is why they want to cut furlough payments down further. Not because of any public spending crisis, but because it makes their strategy for lifting the lockdown sooner smoother as well as "encouraging" a desire for a return to work. It's political manipulation, and it will cost lives.

1 comment:

Jim Bradbury said...

It’s gut wrenchingly scary how the latest episode of herd immunity is being played out. The preface should have prepared us for what’s about to happen. In yet I always think that the author will show some empathy, some humanity and well basically CARE. I don’t know why I think that way in light of the evidence, I just do. It’s like watching a Laurel & Hardy film, at the beginning you find all their antics amusing and find yourself laughing at anything and everything they do. But after a while realisation kicks in and you find yourself thinking, hang on, nobody’s that stupid it’s all a stage and that’s how I see this government. To allow them to be stigmatised with being called inept because of all their apparent errors and poor decisions would be to allow them to escape the fact that they really don’t give a jot about their citizens and that it’s just another case of profit before people and calculated genocide. Hurrah for our economy, sod the people, let’s do herd immunity
Jim Bradbury