Rishi Sunak no more bailouts

[Elpresidente29]

He said government cannot go on like this...

I totally agree, it's disincentivising for one thing and aneathsetising them against the inevitable reality that the scheme is unsustainable.

I think in hindsight the bailouts the government have given people was a terrible mistake, they were too generous. I understand the ideology behind it, the thought process, but I don’t think the government understood how many would love it and wish it to continue. And how hard they would fight for it.

I don’t think they understood How many people don’t like their jobs, the commute, the schoo run, and being able to stay home and get paid suddenly made their lives so much better. I think they misunderstood and under estimated the selfishness of people.

I also think they misunderstood how many companies would just shut down when they were supposed to remain open. How many would demand furlough, how many employees would demand their employers furloughed them and not make them work.

And now we are in a terrible position where many are baying for it to continue.

The government stepped in to try to help people, to ensure they were protected for a short time as we moved through this. I don’t think anyone anticipated that a percentage of the population would behave as they are.

I'm not sure what people expected the government to do : let people starve or lose their homes because a few might see it as long holiday? The system put in place might be open to fraud , but mostly it will help people. Plus a lot of them on furlough may not have a job to go back to. I doubt they are having a great time if it at the taxpayers expense!
This health emergency isn't anyone's fault ( you could blame China but what's the point of that now?) so why penalise people who can't work by letting them go under? What would that achieve in reality? A few can't didn't get any help or are now on UC which does not cover their bills as it is anyway.
I do understand people's anger about this but honestly what was the alternative?
Shutting the country down was a government decision and we vote in governments to make these kind of decisions for the people!
Letting people starve would have been genocide.

Letting people starve would have been genocide

Yes it would. But lots of companies have shut down and furloughed staff when they didn’t need to. And lots of people are sitting pretty on 80% of their normal salary and reduced outgoings. Bluntness is absolutely right. Perhaps 50% of salary might have made both employers and employees a little less enthusiastic.

How do you know they didn’t need to? What’s the evidence? What companies are just as buoyant as they were before? Not many unless they are involved with supplies of food and the NHS. Has local government furloughed staff? What are they all doing now?

i don’t think anyone anticipated that a percentage of the population would behave as they are

It's hardly surprised though. Government hammer home message that virus will kill you and everyone you've ever met. The key message is STAY AT HOME. It's hardly a surprise that people thought shit I'm not safe at work and asked to stay at home is it?

The government have scared the population shitless. They'll have a job getting a lot of people back to work.

Purpletigers People on furlough pay will still be paying tax and NI out of their salary this is form one website explaining You will continue to be paid by your employer as long as you are furloughed, receiving at least 80 per cent of your normal wage, and will still pay taxes from your income.
Your employer will then deduct Income Tax, National Insurance contributions and any other other deductions that they would normally make. I am furloughed but my company is making up the difference so I get 100% of my wages, I haven't had a wage slip, but I know I paid exactly the same tax, pension, NI from my last (furloughed) salary as I would normally do looking at my latest bank statement so I really don't understand your point

Some people on furlough are on half pay as £2k a month is half their normal pay. Others only earned £2500 in the first place. However I agree both will be paying tax but some are furloughed where the comapny even in Jan was about to go under anyway and they might well along with many others end up being redundant anyway and their UC would have been a much smaller cost than the state's furlough money. Anyway furlough ends I think at end of June so that will be our reckoning I suppose.

The80sweregreat- no I did not expect the government to let people starve. Until they have done for self employed people with such a different scheme - both in terms of eligibility (ie not available to all levels of income unlike furlough) and also in accessibility. Their support isn’t coming in until June. How are they supposed to eat at the moment?

I don't know why but I read the title as 'Rishi Sunack no more biscuits' and it made me LOL.

As you were.

I think also people have to remember furlough isn’t an entitlement, it is not benefits. The government has made the decision that it is at the employers discretion.

As such, when companies fully reopen in the next couple of weeks, they will take the decision to stop furloughing their staff, naturally. You can’t run a business with everyone sitting at home.

As such , for most people it’s irrelevant how long the government maintains the furlough scheme. What’s relevant is when their employers open their doors again and when they are expected back to work, and when the employer will decide that furlough is over for their staff.

For most, other than hospitality and airlines this will be in the next week or two.

As companies reopen, furlough will naturally end. Anyone who remains furloughed after the next couple of weeks is likely to be facing a job loss. As said, other than hospitality, social or airlines.

If it wasn’t so generous many employers wouldn’t have shut down, as they didn’t have to,. But I think it’s well recognised that where feasible they are all now looking to reopen ASAP where possible. It’s been nearly two months, they won’t survive much longer if they don’t.

So as said, furlough dies a natural death as companies reopen for business, and the staff have to work. Because it is something companies only use when closed or running a skeleton staff and it is their choice, not the governments. That’s the very premise of furlough. It’s up to the employer to either operate or furlough. Most now want to operate. If they don’t, their competitors will and they will go bust.

Agreed with @Bluntness100.

It was a good plan in theory, but too generous. But then I don't know what another solution would be. Let companies fail, have people out of jobs and push us into a worse recession? I mean we are likely to end up in one anyway, but it would have been worse with no action.

Don't know what the solution is. If you drop the furlough pay down to uc level, there's going to be a lot of very angry people soon.

I think it was far too generous. Many people working full time earn nowhere near what the government is paying out. And some firm's are furloughing workers to save money when their profits are hardly affected. Not on.

If you drop the furlough pay down to uc level, there's going to be a lot of very angry people soon

Only if their employer keeps them furloughed, which indicates the business is in real trouble and lay offs on the way, or if in an industry the government keeps closed Ie pubs, clubs, airlines, restaurants etc.

We need to remember companies are now all reopening.and most will be open In the next week or two. Furlough will stop for these employees when their employers open for business again. Again because furlough is not an entitlement, it’s at the employers discretion.

In my view, furlough should remain for those where the government keeps them closed. I’m not sure at which level though. Any other companies nor fully reopening in the next couple of weeks or keeping staff furloughed are really just delaying lay offs, which will occur as soon as the government says stop claiming. All furlough is doing them is delaying the inevitable.

Yes, the guidance on furlough does say you have to show you were affected by Covid 19 so I am hoping all those employers who have been lying find they have the money clawed back. It is nurses, teachers, ordinary workers who are going to have increased tax bills next year to pay for these schemes (as there are very few very rich people on whom to levy higher taxes which is one reason Hammond proposed a few years ago more NI on "white van man" because there are so many people at those lower income levels so the tax take is higher)

Already a lot of employers are beginning to make redundancies, if they think the business is going to falter long term then they may choose to restructure now. Also if the support is tapered off to 60%/40% etc then what's to stop employees with long service saying I can't live on that, give me my redundancy money now.

Company would need to either bring them back on full pay or offer redundancy. Someone with enhanced terms or even long service on statutory could be in for a reasonable pay out which some may prefer to being furloughed on 60% (or less) for however long.

Every single company will be looking at what work they have been offered in the last 6 weeks and compared it to the normal workload they would expect. Or compare to their normal sales. Whatever they use to measure the bouyancy of the business. They will take a view on what their customers and clients are likely to do in the short and medium term and what the government is going to do. If they really are going to struggle there will be redundancies. The usa is at 15% now. At its peak we had 19.4% of the population unemployed in the 1930s. Double figures is catastrophic.

Most cannot afford to take a long term view. That’s way too expensive and what crystal ball do they use?

The scheme was too generous and applied too broadly. Many businesses didn’t need to shut. I have friends in large German cities who have continued to work throughout the crisis, in roles like finance and HR. Britain seems to have grind to a halt - and it hasn’t helped with the death rates, so I think the furloughs can stop.

Meant to add, friends in German cities who have continued to work in their offices, social distancing, not even WFH but working normally

But how on earth are people who use trains and tubes meant to get to work and keep social distancing. The government have backed themselves into a corner with this.

But how on earth are people who use trains and tubes meant to get to work and keep social distancing.

There won't be any public transport if social distancing doesn't happen. The leader of The Transport Union was on tv saying he'd tell them to walk out, as not safe.
Can't find it but there's a 5 min interview on youtube, was on the news.

Which businesses didn’t need to reduce their activity? They didn’t all close when they furloughed staff. Only some staff were furloughed. Which companies should have stayed open when transport closed down? How could they do this? Maybe German people had plenty of transport and all have enormous offices so they can social distance? I’m certain though that Germany is better than here in terms of this virus. We have ruined ourselves!

For the UK too,
governments can't force consumers to buy non-essentials, or force businesses to stay open if they don't have enough customers

We're entering a Global Recesssion / Depression and millions of people are too skint or insecure to return to their former spending habits

www.theatlantic.com/ideas/archive/2020/05/highest-unemployment-rate-great-depression/611398/

The White House and most Republicans seem to think that this crisis will be solved by loudly announcing the reopening of the economy.

But this is a dangerous misunderstanding of what’s actually driving the recession:
It’s the pandemic, stupid.

The shutdowns themselves had “little or no impact on economic activity”
according to an analysis by a team of economists at Harvardd_.

Severall paperss now show that the decline in spending and employment in most cases occurred before states officially shut down their economy.

Governments didn’t close state economies on their own, and they can’t open the economies on their own, either.

The drop in German GDP for 2020 - forcast 6% - is little better than the UK
Sweden is also forecast to drop by 4% in 2020 - not the huge gap that some expected.

https://www.government.se/press-releases/2020/03/very-serious-situation-for-the-global-economy-and-the-swedish-economy/

https://country.eiu.com/germany

I live in Germany and because the new cases and deaths are low, we have been relaxing lockdown in stages - but with precautions:

Merkel agreed with the 16 federal states that if any local region / city / institution has a rise in new daily cases above 50 / 100,000 population in a 7-day period,
then there would be a local lockdown

This strategy depends on the continuing mass testing here, to give adequate warning
Also continuing contact tracing and mandatory isolation of the infected, with serious penalties for breaking this

Already, 2 towns have been locked down again after the area around their slaughterhouses caused this limit to be exceeded

Also, lockdowns around 6 care homes and a geriatric hospital

Almost certainly there will be many more local lockdowns, but the plan / hope is that the vast majority of the country will keep going

• although probably at most 90% of the economy at peak, because large public events etc will remain banned