A welcome change but more is needed
We welcome the government’s new measures to support workers, particularly the introduction of grants for wage support. But despite the scale of these spending commitments, there is a real danger that millions of workers will not feel their benefit.
The government must move decisively to get cash into the bank accounts of households and firms before the economic dominos start to fall. Substantial support has been announced, which will be welcomed by many workers — but it will not reach all who need it. The government is certainly moving in the right direction, but the new measures will fail to reach all workers, and could take until the end of April to come into force.
More clarity is also needed on the announcement that the government will provide grants to businesses, covering up to 80% wage costs to a limit of £2,500 per worker. If these grants reach the businesses that need them, they could prevent millions of redundancies. But there is no assurance that every business that needs support will receive it: the government needs to specify if the payment is more or less automatic, how it will get into firms’ accounts quickly and how it will ensure that this cash translates into wages at the end of the line.
Stipulations against layoffs need to be in place
A further problem with the announced plans is that no stipulations are placed on firms keeping workers on payroll. Financial support for firms must come with conditionality: at a minimum, no workers are to be laid off. People are losing their jobs right now – the government must act immediately to stem the flow. Without this stipulation put in place immediately, firms – and their payroll systems – will be shutting up shop in the intervening period, simply precluding the possibility of utilising the government’s ‘Job Retention Scheme’.
The self-employed are left out in the cold and need urgent support
The 5 million people who are self-employed will have taken little comfort from last Friday’s announcements. Greater support is needed. The expansion of an already overburdened Universal Credit system to cover the self-employed will make little difference. While a worker on PAYE could receive up to £2,500 per month, a self-employed worker might only receive statutory sick pay – £94.25 per week.
It is our understanding that self-employed workers who have filed tax returns with HMRC in the past could be supported within days of a governmental decision. As HMRC already holds the bank account details of these workers, it would simply be a matter of paying cash into their accounts.
Universal Credit will not be able to cope or deliver
Universal Credit is going to wilt under the pressure of new unemployed applicants in the coming weeks and months. Other than a minor improvement in levels of income support, no support has been announced for those outside of formal employment, unemployed persons, those receiving personal independence payment, or others without a current employer such as university students. For these people, immediate removal of means-testing from current social security payments should be introduced as a matter of urgency.
We applaud the government for taking advice from the TUC and CBI, and recent measures move very much in the right direction. But it must go further – time is of the essence. Economic collapses become increasingly difficult to arrest if they are allowed to continue unabated, and there is a real risk that this recession could turn into a major depression. We call on the government to convene a cross-party task force as a matter of urgency to strengthen the measures announced last Friday.
Signatories
Jo Michell
(Associate Professor in Economics, UWE Bristol)
Rob Calvert Jump
(Research Fellow in Political Economy, Greenwich University)
Diane Elson
(Emeritus Professor , University of Essex)
Danielle Guizzo
(Senior Lecturer in Economics, UWE Bristol)
Miatta Fahnbulleh
(Chief Executive of the New Economics Foundation)
Mary-Ann Stephenson
(Director, Women’s Budget Group)
Prem Sikka
(Emeritus Professor of Accounting, University of Essex)
Sunil Mitra Kumar
(Lecturer in Economics, King’s College London)
Jonathan Portes
(Professor of Economics and Public Policy, King College London)
Daniela Gabor
(Professor of Economics and Macrofinance, UWE Bristol)
Fran Boait
(Executive Director, Positive Money)
Jane Lethbridge
(Principal Lecturer, Department of International Business & Economics, Faculty of Business, University of Greenwich)
Nick Srnicek
(Lecturer in Digital Economy, King’s College London)
Mat Lawrence
(Director of the Common Wealth think tank)
Robert Palmer
(Director of Tax Justice UK)
Neil Lawson
(Director of Compass)
Joe Guinan
(Vice President, The Democracy Collaborative)
Laurie Macfarlane
(Fellow, UCL Institute for Innovation and Public Purpose)
Jackie Jones
(Former Professor of Feminist Legal Studies Former MEP)
Sarah Jayne-Clifton
(Director of the Jubilee Debt Campaign)
Michael Jacobs
(Professor of Political Economy, University of Sheffield)
Ania Plomien
(Assistant Professor, Gender Studies, LSE)
David Adler
(Fellow, European University Institute)
Neil McInroy
(Chief Executive, Centre for Local Economic Strategies)
Will Stronge
(Director of Autonomy)
James Meadway
(Associate fellow at IPPR)
Rebecca Tunstall
(Professor Emerita of Housing Policy, Centre for Housing Policy, University of York)
Juvaria Jafri
(Lecturer in International Political Economy, City, University of London)
Bruno Bonizzi
(Senior Lecturer in Finance, University of Hertfordshire Business School)
Andy Denis
(Fellow Emeritus in Economics, City, University of London)
Anna Laycock
(CEO, Finance Innovation Lab)
Guglielmo Forges Davanzati
(University of Salento)
Steve Keen
(Distinguished Research Fellow, Institute for Strategy, Resilience and Security, University College London)
Constantinos Alexiou
(Professor of Macroeconomics and Policy, Cranfield University)
Simon Wren-Lewis
( Professor of Economic Policy, University of Oxford)
Jonathan Perraton
(Senior Lecturer in Economics)
Sophia Kühnlenz
(Lecturer in Economics, Manchester Metropolitan University)
Frank van Lerven
(New Economics Foundation)
Jan Toporowski
SOAS University of London
Cem Oyvat
University of Greenwich
Neville R Norman
Universities of Melbourne and Cambrdge
Pedro Mendes Loureiro
University of Cambridge
Mark Setterfield
New School for Social Research
Ewa Karwowski
University of Hertfordshire
Mary V. Wrenn
U. of the West of England
Carolina Alves
University of Cambridge
Ozlem Onaran
Prof of Economics, University of Greenwich
Ingrid Harvold Kvangraven
University of York
Engelbert Stockhammer
Professor of International Political Economy, King’s College London
Deborah Dean
Associate Professor in Industrial Relations, Warwick Business School
Emanuele Lobina
Principal Lecturer, PSIRU, University of Greenwich Business Faculty
Ulrich Volz
Reader in Economics, SOAS University of London
Andrew Fischer
Associate Professor, Erasmus University Rotterdam
Dany Lang
Associate Professor, University Sorbonne Paris Nord
Ania Plomien
Assistant Professor, Gender Studies, LSE
Janet Veitch OBE
Chair, UK Women’s Budget Group
Karl Petrick
Associate Professor of Economics, Western New England University
Nina Eichacker
Assistant Professor of Economics University of Rhode Island
Yannis Dafermos
Lecturer in Economics, SOAS University of London
Duncan Lindo
Vrije Universiteit Brussel
Leslie Huckfield
Lecturer, Glasgow Caledonian University
Frances Coppola
Economist and author
Radhika Desai
Professor, University of Manitoba
Imko Meyenburg
Senior Lecturer, Anglia Ruskin University
Tony Yates
Resolution Foundation and Fathom Consulting
Richard Murphy
Professor of Practice in International Political Economy at City, University of London
Thomas Palley
Economist, Washington, DC
Andrew Cumbers
Professor of Regional Political Economy University of Glasgow
Howard Reed
Landman Economics
Trevor Evans
Professor of Economics, Berlin School of Economics and Law
Prof Pritam Singh
Visiting Scholar, Wolfson College, Oxford
Dr Jerome De Henau
Senior Lecturer in Economics, Open University
Dan O’Neill
Associate Professor in Ecological Economics, University of Leeds
Giorgos Gouzoulis
Research Fellow, University College London
Maria Nikolaidi
Senior Lecturer in Economics, University of Greenwich
Emanuele Citera
PhD Student, Economics Department, The New School for Social Research
Antonia Jennings
Rethinking Economics
Sara Gorgoni
Associate Professor in Economics, University of Greenwich
Natalya Naqvi
Assistant Professor in International Political Economy, London School of Economics
Jamie Morgan
Professor, Leeds Beckett University
Adotey Bing-Pappoe
Senior Lecturer, Economics, University of Greenwich
Alfredo Saad Filho
Professor of Political Economy and International Development, King’s College London
Simon Mohun
Emeritus Professor of Political Economy, Queen Mary University of London
Andrew Simms, Co-director
Centre for Global Political Economy, University of Sussex
Giorgos Galanis
Senior Lecturer in Economics, Goldsmiths, University of London
Stefanos Ioannou
Research Associate, University of Oxford
Paul Mason
Author and economics journalist
Ha-Joon Chang
Reader in Political Economy of Development at the University of Cambridge
Frances Stewart
Professor Emeritus, University of Oxford
Ann Pettifor
Economist
Stephany Griffiths
Economist
Will Hutton
Economist
Michael Edwards
Hon Prof, Bartlett, UCL
Josh Ryan-Collins
Senior Research Fellow, Institute for Innovation and Public Purpose, UCL
Josè D. Villadeamigo
Visiting Researcher, CEPED-FCE-UBA – Member of PIUBAD, Argentina
Patrick Allen
Chair of the Progressive Economy Forum.
John Weeks
Professor emeritus at SOAS