The government’s scheme of support for the self-employed demonstrates that the policy of shutting down the economy is unsustainable and fiscally futile. The announcement by Chancellor of the Exchequer, Rishi Sunak, on Thursday 26th March 2020 about government support for those in self -employment means that there will be wide-scale reductions in income.
This follows on from the government’s support for the employed, and the two packages are similar in their attempt to have some form of equality of treatment between the two. The policy for the self- employed also has another factor in common with that for the employed, in that it is full of holes. Everyone will have a least an 80 % loss in their incomes, some will have more than that, and some will receive nothing at all with these schemes.
Both schemes have another factor in common, and that is that the government rushed out their policy of severely restricting business activities, without thinking about its consequences on millions of working British citizens. The problem with this new restricted economic policy is that it has wrongly been blamed on the coronavirus.
It is not the fault of this virus, it is the fault of this government’s policy. It is the government’s policy that has brought the economy to a halt. There was no need to have this wholescale shutting down of the British economy. It seems that because some countries have carried out similar actions, that Britain has decided to do so also.
Wrong. A number of countries affected by coronavirus are making sure their economies are not shut down, in fact the very opposite.
It is all very well, Britain and some other countries taking such extreme actions, but it seems they have been influenced by panic rather than by balance. The inadequate support offered to the employed will do nothing else but bring question marks on the government’s policy.
When the government’s help for the employed came out, it was clear that major damage was being inflicted on a large proportion of those who create the countries’ wealth and also pay the taxes and national insurances. It would have to be a major disaster for a government to cause that amount of damage to such valuable members of society.
It is important to be frank and realistic. Yes, this coronavirus is nasty and rampant, but it is not a major disaster in the context of other ones the nation has experienced. This virus does not cause that many deaths, certainly not enough for the government to pursue their shutting down the economy policy. We have never done this for any other disease, some of which were far worse, so why do it for this one now?
Looking at it logically, if the government carried out a cost-benefit analysis, it would not be justified. Of course emotions are involved in an issue like this, as British people are innately caring.
But policies have to be for the greater good of the maximum numbers of people in the population, rather than a few. No one seems to have come up with the best means of protecting those most at risk from this virus, rather than the rather roughshod blanket approach the government has blindly followed.
The policy on the self- employed has only amplified the problems which have been created for the employed. The policy needs some further examination, but one crucial aspect is that it only covers those whose main source of income is their self-employed work. That means that anyone who perhaps works part-time and earns more with that than with their self-employed earnings, will have no compensation for that part of their earnings. It could mean about 40% plus drop in income especially as the government is only offering 80% cover of net earnings anyway. This policy also only covers up to £2,500 of earnings so those who earn more, and there are plenty of those, will suffer even worse shortfalls in their income.
One reason these ill-thought-out decisions have been made is that those who make them are not affected by them. The politicians and the Civil Servants are not having to accept the consequences of their decisions. Their earnings remain unchanged, maybe even improved with performance bonuses. The only others not affected are pensioners as their incomes remain the same. However, the pensioners who carry out extra supplementary work, whether employed or self-employed, will suffer.
It is not sustainable for the bulk of the wealth creators in the British economy to suffer massive reductions in their incomes for even one month, let alone more. It is also not sustainable for the government to provide such support without the government going tens of billions more into debt.
The Chancellor had the gall to suggest that because we are all in it together, that all would have to repay the chips put down. That means that all this money will have to be paid back and that the prospect of a return to austerity is very possible. The government never asked the nation if they wanted to be in together to have massive income cuts or to have a police state. No, the public are in it together to solve this crisis, but not necessarily the government approach to it.
The Prime Minister said the government was putting its arms around every worker as if to intimate that these workers were responsible for the predicament they have been put in by their politicians. The Chancellor said that their policy was “to protect peoples’ health and economic security,” but the government cannot see that the reverse has been the case.
In fact, the situation is so appalling, so fiscally futile, that it is necessary to implore the government to change their policy without delay. This policy is playing with fire, and the nation is getting burned by it.
It does not matter who the government blames for this disastrous policy, as long as they change it forthwith!