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The Government Tightening Its Belt with the North will Keep Us All in this COVID Chaos
By curtailing the furlough scheme, the Chancellor has undermined the trust on which Coronavirus restrictions operate, argues Sam Bright
“We will support jobs, we will support incomes, we will support businesses, and we will help you protect your loved ones. We will do whatever it takes.”
This was the commitment made by the Chancellor Rishi Sunak on 17 March, at the outset of the Coronavirus crisis, just a few days before the UK’s Summer hibernation.
A multitude of policies poured forth from the Treasury over the ensuing days and weeks; surprisingly generous commitments to prevent redundancies, prop-up businesses and generally insulate people from an economic catastrophe.
And it worked. The economy shrank by 20% in April alone, yet unemployment remained comparatively stable – ticking up to 4.5% in the period from June to August.
The lifeline drug that immunised the economy was the Chancellor’s furlough scheme: ensuring that companies could retain staff and rely on the Government to pay 80% of their incomes.
However, somewhat ironically, there is now a shortage of this antidote, according to Sunak. Those forced to re-enter strict lockdown in ‘Tier 3’ areas have been offered a less potent cocktail by the Chancellor: two-thirds of their income will be covered by the Government.
“The North is not a petri dish,” read graffiti that appeared in Piccadilly Gardens, Manchester, on Friday – epitomising the general sense of abandonment that people in Tier 3 areas, including the North West and imminently the North East and Yorkshire, feel.
The Government’s original commitment was unequivocal and so there is rightly now a sense of betrayal among those following the same lockdown rules as before – but being forced to live on less.
A False Dichotomy
This perfidy, and the grievance it has caused, has scorched Sunak and the Conservatives politically. However, far more importantly, the Chancellor’s duplicity will damage the Government’s ability to marshal the Coronavirus.
“Divided countries tend not to deal well with epidemics,” Jeremy Farrar, a member of the Government’s Scientific Advisory Group for Emergencies (SAGE) and the Wellcome Trust Director, told Sky News yesterday.
This is the first flaw of Sunak’s furlough flip-flopping. A country’s ability to suppress COVID-19 depends on its willingness and ability to follow rules – on indoor contact, mask-wearing, using public transport, isolating when instructed, and much more besides.
The virus has curtailed freedoms and imposed, what may seem to some, time-limited authoritarianism. In other countries – such as Italy – the status quo is enforced by the police. “You go outside after 10pm; bam, €400 fine,” my Italian barber Aldo told me over the weekend.
However, in the UK, there exists a self-regulated form of suppression. The Government has applied a blend of legally-enforceable rules and general guidance, with the former sporadically enforced by police. Indeed, between 15 July and 15 August the British Transport Police approached more than 14,000 people for not wearing a mask on public transport – something punishable with a fine – yet only 14 fixed penalty notices were levied.
If public faith in the system evaporates, there is nothing to prevent it from disintegrating. Collective willpower is the only thing holding back the virus, when rules can be broken without repercussions.
The public consternation caused by Sunak’s parsimonious policies is therefore dangerous. A loss of trust in those who govern the country erodes the incentive to follow the rules they administer. It also doesn’t help when certain components of the system are already suffering from widespread mutiny. On 24 September, for example, the Financial Times reported that just 11% of people in the UK required to self-isolate were actually doing so.
For some people, deciding to follow the rules relies on having faith in those who make the rules. Yet, for many others, their ability to adhere is simply practical. If the Government doesn’t provide enough money to cover your rent and feed your family, you will break the rules, go to work, and do whatever it takes to keep the bailiffs from your door.
Spurred by well-funded lockdown sceptics, there has been a bizarre rhetorical separation – in the UK at least – between saving lives and protecting the economy. Boris Johnson has rejected a second, nationwide lockdown, contrary to the advice of SAGE, as he says it would be “disastrous” for the economy.
But there is no prospect of an economic revival until the virus has been suppressed and no evidence that this can be achieved without locking down, reducing cases to a manageable level, and implementing an effective test, trace and isolate regime. The alternative is a zombie economy; stubbornly avoiding death, yet with no prospect of ever being fully alive and healthy.
Stopping the virus will save the economy; and saving the economy will stop the virus. Perhaps the Cabinet should turn this into a morning chant, to restore some financial generosity to some of its tight-fisted members.