Gov to fund furlough scheme at 80% until October!

[caperberries]

Aibu to consider this unsustainable? What is the reasoning behind this?

Looks like disaster socialism advocates is out in force, it's brought out the economically illiterate.

“People keep talking about the economy, but the knock on effect of not furloughing people would also be devastating.”

There is no free lunch. Even when the government hands it out as a furlough scheme. By furloughing people, the government has now loaded on additional debt, which will translate to lower public sector spending and higher taxes. This will result in fewer contracts to companies and lesser disposable income for individuals. This leads to the affected entities spending less money. Which will lead to an economic contraction which drives the who cycle downwards again.

Yes, the impact is less severe if it’s distributed but it’s also a lot wider.

@OnlyFoolsnMothers

well the consensus in recent times in that two healthy adults with non sen children shouldn’t be funded by the government to stay at home. If there are health issues then we have benefits in place (perhaps inadequate benefits) but again that’s down to low taxation
Fair enough but the point I’m making is that two households with the same income shouldn’t be penalised by an increase in tax due to how that income is made up. So this ^ is a bit of a moot point.

A single adult will no doubt wonder why they should pay more to subsidise people who choose to have children and not work
You’ve lost me. A single person wouldn’t pay more it would simply allow two cohabiting adults to merge their personal allowances.

I’m sorry but your arguments are very personal to you and how you have financially positioned yourself
Actually that argument^ has nothing to do with my situation. I work FT (currently on mat leave) but stand by my point that households shouldn’t be disadvantaged by having one mid/high earner rather than two low earners. Or indeed having one partner who doesn’t work.

I think as a country we have needed to pay more tax for a long time and now it is inevitable
Yes but a raise in tax will hit the squeezed middle more than any other bracket. As usual low income will be given support, very high income will skirt around paying it and as usual the middle earners will be the ones paying back this debt.

At the end of the day your husband and indeed myself still have jobs we are far luckier than many (I say that as a pregnant mother who knows that I could lose my job)
I won’t class my self as lucky when we lose the home we’ve spent the past decade saving and working for which will happen if there is a significant rise in taxes, despite still both having our jobs. (I say that as the mother of an 8 week old who would like to grow up in his own home).

Wow look at all the socialists on this thread! I’m guessing you will have no problem with universal basic income then right?

We’ve had serious problems with homelessness, child poverty etc over the last few years - I’m guessing you all voted Conservative in the last election because you wanted to pay more tax to solve these problems right?

While we’re at it, can we also nationalise rail and utilities given that these are all basic capabilities used by everyone? Could you please pay some more tax for this?

We should make universities free as well - at least for those studying STEM subjects because surely they contribute to the society and economy? Happy to pay more in tax for that as well?

Those doctors, nurses and NHS staff that just saved our lives and we go out and clap/bang pots and pans for, can they also please get paid, at the very least like a London Tube driver (£50k)? Are you happy for a tax rise on that as well?

It’s simply disgusting the see the amount of hypocrisy on this thread. The majority of people voted for a government that has systematically dismantled vital services, forced austerity upon us and now, when the middle classes are affected, they go crying and screaming for socialism! For government mummy and daddy to save them. Pathetic!

There is no free lunch indeed and furlough is hardly that.

But it was necessary.

Now it needs to be finessed and devil will be in the detail of the wind-down scheme.

Any talk of taxing people extra who’ve ‘benefitted’ is mad. Honestly, utterly mad.

A useful government would look to force companies such as Amazon etc to pay their taxes. But nothing is as simple as it seems.

Big picture the economy is fucked and loads will be out of work - the extension of this scheme is just buying time to make plans for how they’re going to manage changes to all the other interconnected systems like benefits and housing and forcing banks not to repossess en masse etc etc.

We are all in it together in the sense that furlough or not there is no good outcome. But many will be disproportionately affected.

Furlough is neither here nor there in the macro economic sense, unfortunately.

None of this is free... it's all coming at a huge HUGE cost, immediately and for many years to come.

The tricky part is calculating if the cost of furloughing ultimately ends up costing less than not doing so. That is the long and short of it.

For the large part, our economy was in 'ok' shape, and I believe the government are hoping the furlough scheme will act more like a pause button that a rewind one, so that when we do start to recover we will gain traction better, and recover more quickly.

The big uncertainty is the rest of the world and how well our 'old' economy might work in the new world...because clearly the world's going to have changed, so we won't magically just be in perfect shape...

So for instance, if you have a great car industry, pause everything, let the world change, then unpause, that industry it might be not be in quite the stragetic position it once was. You might benefit... but you also might lose.

This is a gamble most of the leading European nations are taking (as is the USA).

Regardless of what happens, it won't be pain free.

But if we ALL have to increases taxes and lower our standards of living, it might not be so bad. The real problems will come if there's a disproportionate nature to it (as there often is). That's when civil unrest starts to rear its ugly head.

Don’t think of this a runaway credit card bill. The rules and timescales of repaying government debt are very different.

For example...

“In 1835, the British government took out a loan of £20m to reimburse slaveowners when it abolished slavery, which was then a vast sum and far in excess of anything governments had ever borrowed for one-off expenditure before, equivalent to around £17bn in today’s money. The taxpayer finally finished paying off that loan in 2015.”

More here: www.newstatesman.com/politics/economy/2020/05/rishi-sunak-furlough-scheme-debt-growth-uk-loans

@NoSquirrels “ A useful government would look to force companies such as Amazon etc to pay their taxes. But nothing is as simple as it seems. ”

Quite simple this won’t happen. Amazon (or other) and it’s backers are far more important to the government that the majority that elected them. Loads of companies use complex offshore structures to evade taxes and launder money but there’s no way the government will go after them. In all the years after the Panama papers revelations, how many people have actually been fined/jailed etc?

Most multinationals will cross charge their various cost centres across the globe in order to make sure the highest taxed countries make the least profit and lowest taxed countries make the most profit.

It is being 'smart' about paying the minimum tax. Something most of us would do if we had smart enough accountants.

It is also something something 'British' companies do in reverse across other nations.

It really isn't all that easy to tax such firms so heavily (and it's not all megafirms, there's thousands of large firms doing it to). It's ultimately a game of brinksmanship... the likes of Amazon and Starbucks DO need us, but we need them too. Just like a landlord tries to charge you just as much as he can squeeze out of you... without making you leave. If you leave, he ends up shooting himself in the foot too.

In the grand scheme, the UK does ok.

the likes of Amazon and Starbucks DO need us, but we need them too. Just like a landlord tries to charge you just as much as he can squeeze out of you... without making you leave. If you leave, he ends up shooting himself in the foot too

Quite.

Amazon (or other) and it’s backers are far more important to the government that the majority that elected them.

Yes.

I’d love “people” to wake up and smell the coffee and stop shopping on Amazon & stop buying Starbucks and the like. But as I can’t persuade my own DH I’m pretty realistic.

It just sucks massively to see companies such as Amazon genuinely profiting during this pandemic when high streets will see businesses sent to the wall.

We all need to stop thinking of ourselves first and see a bigger picture.

CountryCasual

I’m still confused about your point re: taxing as a couple, how would you even work that out without everyone doing a tax return (isn’t that what the marriage tax allowance does anyway)?
Also aren’t tax credits worked out against an entire households income?

As for tax hitting the middle- yep haven’t they always?!

Re: your house, people being furloughed have mortgages and children too- we have to save the masses as best we can- we have to prop them up financially and we have to raise taxes to do so. Taxes won’t jump up tomorrow- and I guess at least you may have locked in a mortgage rate whilst it was low if you recently bought.

I do however think anybody who has abused the scheme needs to be publicly flogged, then shot at dawn the following day.

THEY should pay a heavy price (unfortunately it'll be their staff that pay the bigger price, unfairly)

I think it's important not to get too focussed on the very small number of people who will have taken advantage of this.

Allowing a divide and conquer rhetoric that convinced so many people that there were millions of fakers and theives claiming disability benefits, and benefits in general, is what allowed us to get into a situation that the vast majority of the country could not function on the so-called safety net of benefits because of how they've been attacked and slahed.

I'm not so sure it is a small number. I would say 70% of the firms I work with have abused it and their employees. Anecdotal, but there you go

I slipped through the net, didn't even get on the payroll for furlough as a returning seasonal worker

There's not a small number that have abused it.

I worked 70 hours a week while my team were furloughed. As were most staff left working, we were stressed to shit.

Yes we needed to furlough some staff, but they took people who there was work for. Large amounts of companies furloughed people that there was work for. They just expected other people to pick up 'for the sake of the company

Its been a massive complaint of those that are not furloughed.

Many peolle have reported been asked to log on and do work, while furloughed. Some people even expected to work their hours at home.

Lots of companies are definitely taking the piss.

Our company is working with two others on the same contacts and we have not furloughed staff but the other two have. We know the work is there as we have the same contacts together. We can all work from home too, it’s so frustrating to see the system being taken advantage of by businesses that don’t need it.

*contracts.

We didn’t stop half way into WW2 and say “Fuck it. Stopping now. We’re broke.” (And we were broke.)

Quite.

The majority of people did not vote for austerity governments newbie. In every general election of the 2010s a majority of votes cast were for parties to the left of the Tories. Our electoral system created majorities, sometimes, where they didn't exist among the electorate.

You're also on a site that is primarily populated by relatively younger demographics and therefore would likely lean even less Tory than the population as a whole, given that the Conservatives get more support the older the cohort.

I think many people are concerned by the extension and the cost. For those industries forced to remain closed I think it’s righ support is given. I do think it needs to be closed for everyone else sooner.

Yesterday in the house one of the mps asked Sunak “are furloughed people actually unemployed and they just don’t know it yet” and I think clearly there is an element of that which is true. If the job is going to go, I’m not sure of the benefit of keeping furlough for the employee other than giving them more money for a period of time.

Hopefully as companies are now reopening the scheme tails down, it becomes naturally for industries forced to close, and others get back to normal and job losses are minimal.

When it’s industries not forced to shut down, I think it is deeply concerning if employees remain on furlough. That’s where the risk is.

If the job is going to go, I’m not sure of the benefit of keeping furlough for the employee other than giving them more money for a period of time that is the benefit, give them something to try and ease the inevitable hardship

give them something to try and ease the inevitable hardship

Sure, but the cost to society is huge, and we don’t give others three to six months wages when they loose their jobs to help ease the hardship.

The point is there has to be an end point, if people are actually unemployed and don’t know it, the government can’t just keep paying their wages to help make their life easier. We can’t afford it as a society.

The airlines are a prime example. Many are being furloughed and when the government stops paying many will loose their jobs. What was the benefit to society paying the salary bill for a few months? Increasing taxes for everyone else to pay for it?

Surprised to see @Bluntness100 advocating stripping people of furlough. Most people don't lose their jobs on a temporary basis because the government bans their work place from opening.

What was the benefit to society paying the salary bill for a few months?

Giving the systems time to cope for one

The backlog on UC at the moment is huge because of the number of people who’ve had to claim due to businesses that went out right away, and due to people who’ve had hours cut or salary change.

Adding thousands (millions?) more people to that would just overwhelm it even more leaving everyone waiting longer and shifting more people into an immediate situation that could overwhelm food banks and the likes.

It also means there’s no immediate pressure to make changes to support for mortgage interest payments/schemes, which would inevitably have come from the banks if millions of people were going to start defaulting on their mortgages.

Surprised to see @Bluntness100 advocating stripping people of furlough. Most people don't lose their jobs on a temporary basis because the government bans their work place from opening.

Same. @Bluntness100 is usually the sane one

It's 6.3 million people who would otherwise have to go on UC temporarily. It's impossible to run them through the system. Then the whole process of rehiring etc...