The Tories were forced to unveil measures “unprecedented in the history of the British state” on Friday as the coronavirus death toll rose sharply and mass job losses were planned.
Chancellor Rishi Sunak promised a wage bailout for business that want to axe jobs because of the coronavirus crisis. This would see the state “cover 80 percent of the salary of retained workers up to a total of £2,500 a month” through grants.
Sunak said, “I am placing no limit on the amount of funding available for the scheme and we will pay grants to support as many jobs as necessary.
“The Coronavirus Job Retention Scheme will cover the cost of wages backdated to 1 March and will be open initially for at least three months.
“I will extend the scheme for longer if necessary.”
Sunak said the plan was an “unprecedented, economic intervention” by the state—and came only days after a £350 billion bailout for bosses.
It is a departure from Tory free market orthodoxy—and shows a forest of “magic money trees” can quickly be found to save capitalism. Robert Peston, ITV News’ political editor, said, “A Tory government has just announced the temporary nationalisation of more or less the whole private sector.
“And it will be seen as uncontroversial.”
This is a very long way from telling people just to wash their hands. It underlines the scale of the crisis and the inability of the free market to cope.
But the measures are far off from any form of public ownership and just throw money at the private sector. Bosses are still in charge and it's them who will get the cash.
It remains unclear unclear how many workers' wages would be guaranteed. Sunak said the grants would cover workers on a PAYE payroll schemes, which can exclude some such as the bogus self-employed and the lowest paid.
He left open the possibility that bosses wouldn’t have to pay the remaining 20 percent of a worker's wage saying, “Employers can top up salaries further if they choose to.”
In sectors that are more casualised, for instance, bosses may just lay off workers without bothering to apply for the scheme.
It is also unclear whether parents who need to cut their hours or take unpaid leave in order to care for children while schools are closed to most pupils will be eligible for the coronavirus job retention scheme. If not, a large group of people remains vulnerable.
And what happens after three months?
There was precious little for renters and those who have already been sacked.
Unions should fight to make sure workers get 100 percent of their wages.
There were no details of how or if the state will determine eligibility for the grants. Shortly afterwards, Sir Philip’s Green’s Arcadia Group released a statement that its high street shops were closing their doors.
It said, “All store staff remain employees during this time and will be paid their normal pay for March plus any outstanding overtime payments, after which we will review this situation and will be keeping our store teams updated.”
The multibillionaire owner Green is likely hoping for a public bailout.
Meanwhile, the promise of £7 billion more for welfare pales in comparison to the £350 billion corporate bailout. It includes £1,000 a year increase for the woefully low Universal Credit and Working Tax Credit basic allowances and a slight increase in housing benefit—but no suspension of rents.
TUC union federation general secretary Frances O’Grady said the plan was a “breakthrough” and that Sunak had shown “real leadership”. “We’re glad he's listened to unions and taken vital steps to support working families,” she said.
Unite union leader Len McCluskey praised it as “bold and very much necessary”. “The chancellor has done the right thing and we look forward to working further with him in the coming days to get this money into the hands of those most in need,” he said.
They are wrong to deliver union backing for a Tory chancellor who will savage workers as soon as the emergency lifts.
The Tory measures show the money is there, but state bailouts for private firms do not equal pro-worker policies.
We need to suspend the market and have democratic planning of where resources go to save lives and meet people’s needs. And that means building class unity against the Tories—not making peace with a government in the name of national unity.