Was furloughing worth the National debt

[HMSSophie]

Government funding of furloughed employees has resulted in huge national debt. But massive redundancies are pending. Was it worth it? We seem to have arrived at the worst of all worlds: national debt plus massive unemployment.

I know three or four months of additional income will on an individual level would be very meaningful (my DD is furloughed) but job losses are coming none the less (my DD for one, again). Was it the right thing to do or has the Government made a balls up?

3 weeks furlough to 'save the nhs' then universal credit for those entitled to it. Might have got everyone a bit more focussed on this crap lockdown and the alternative Sweden model. The economy is royally fucked and people are too comfortable at home on full/almost full pay.

Furlough meant businesses could be put "on hold" rather than closed down completely. That means they're able to start again and hit the ground running. A completely new business takes a lot of time and effort to set up - reopening a moth-balled one can be done far quicker.

NoHardSell
3 weeks furlough to 'save the nhs' then universal credit for those entitled to it.
And tens of thousands of homeless families
Brilliant work Dom.

Luckily Sunak is less heartless than you

Not when you read about firms who used it doing so well during lockdown that the plan to give staff bonuses! (Another thread here today)

I'm glad it was done but I do think it should have been done with some sort of effort to make firms demonstrate why and how they needed it.

Once it was decided to close down society,, then furlough was necessary.

Even if we had not decided to destroy our economy by forcing so much of it to close, it might still have been a good idea while demand was low.

I think extending it until October was possibly a mistake, as I think it has helped create a sense of complacency and people have started to think of being paid not to work as a medium term option rather than an emergency measure.

I was a total utter waste of time and money and has just delayed the redundancies as they left out 3 million people, they totally left out supporting the owners and directors of limited businesses who employ the people who need jobs.

So while they helped the employees they totally left out the one group of people they needed to reboot the economy.

So limited company directors are on their knees and can't afford to have their staff back and can't afford to live themselves.

It's created a divide between the haves and the have nots and it's made a whole ton of lazy entitled employees who think their companies "owe them" furlough.

The furlough scheme isn't "free" for employers it costs in accrued holidays, extended redundancy pay etc.

So Rishi spent millions on his PR telling us all how amazing this scheme was but it's been a shocking badly thought out mess.

DH was furloughed around 2 weeks into lockdown and looks set to stay that way until August. In the meantime, his company have started the consultation period for large scale redundancies. Potentially, at least a third of their employees will move straight from furlough to no job. I have mixed feelings about it - we wouldn't have survived without the furlough payments, but it seems counterproductive if so many people are going to lose their jobs anyway.

I think furlough has the potential to kick people into spending again sooner. So potentially saving the economy.

Although the redundancy’s upon return to work will stop that.

Places that have had to shut down completely like macdonalds for example if they had made them all redundant would they have all come back ? Probably not because they can't afford to live off nothing so would find a job if possible or live off benefits. Then when macdonalds reopens if they can't get the staff back or recruit it just wouldn't open at all .
Other companies that haven't been affected by Covid but decided to furloughed a few members of staff to save money affectively increasing the workload of colleagues. Then no that shouldn't of happened.
The furloughed scheme may well have saved my job I'm at risk of redundancy but hopefully when everything reopens eventually will be fine . My job impacts the hospitality business as lot of restaurants and bars may not reopen unfortunately so the furloughed scheme is just delaying unemployment . Saying that id rather be out of work later this year when hopefully some business are recruiting than now when everywhere is not reopened yet .

In my industry crashes or even potential seem to be used as an excuse for restructuring and redundancy’s and I think that will be the case again here.

I’m glad they did it but know that many companies took advantage of the ease at which it was given out

I think it was amazing setting up the system. Was it worth the national debt? There was no choice imo.

No matter what the government did and even going forward no matter what they do it will never be good enough for some people.

I think extending it until October was possibly a mistake, as I think it has helped create a sense of complacency and people have started to think of being paid not to work as a medium term option rather than an emergency measure

I totally agree. It may wll have been necessary to extend it for some sectors such as hospitality and tourism, but to me the blanket extension - and for so long - was madness

And now we have Nicola Sturgeon saying it should be for two years ...

The extension is on less generous terms.

But even then it will not protect tens of thousands of businesses.
I think many people will be surprised on Monday when they realise which businesses have gone bust and will not be re opening.

Anybody involved in the arts or performance is looking at no income for many more months.
Hospitality and business travel may never return.

The furlough scheme is cheaper than the alternative
millions on unemployment and homeless

We bailed out the banks to the tune of 500bn

Lies.

Replacing trident is expected to cost £200 billion

More lies.

The latest estimate for the furlough cost is £100 billion. We have a debt of around £2 trillion so this isn't the sum it seems.

It's around £2 billion a year in interest, which is trivial.

UK GDP is £2.2 trillion and the GDP fell some 20% in April, which would be hundred of billions of pounds on a permanent basis.

It is not very easy to say if the scheme was good, but if we consider housing benefit, universal credit and tax credits as costing £50 billion a year, and hence £2 billion as a 4% rise, this extra debt interest is comparable to a small rise in benefits rates, considering that benefits increases would be permanent forever, whereas the furlough must be considered as a one-off response to a catastrophe.

So it's simply not the sum of money that it seems as we have far more debt, and that matters far less, than people think.

It's true that adding £2 billion interest to our spending bill leaves less for everything else, but this isn't some of scorched earth 80% tax rates in future hellhole that some economically illiterate people have been claiming.

Rather that hellhole might transpire if the economy does not recover and these businesses don't return to operating as before because they have gone bust.

So worry less about the furlough scheme and more about how we are going to reopen restaurants, football grounds, concerts etc

Our kid and their kids will be paying this off for decades to come. Rather than it being this quickly implemented blanket offer I think FAR more limits should have been set on which companies/business owners were eligible for it ie. past profit numbers dictating if they were eligible. A friend at a very well known British brand, owners worth over £400 million, appear in Sunday Times Rich list furloughed all its staff and my friend is sickened by it.

We don't pay off the national debt though. It just is.

We might have discovered our love of housing and ability to diet is greater than our fear of dying by a virus that overwhemingly kills people in care homes and the fat.

Bollocks.

The risk is from age ( thousands of times more likely to die at 90 than 9). And being male (double risk). Being merely fat adds about 25% risk which is nothing - if you weren't at risk then you still aren't.

It adds risk on a population level, but not nearly to the extent of age.

@Nohardsell er, I am not comfortable at home on full pay. I am anxious every day that I might not have a job to go back to. I would love to go back to work, but for that to happen everything needs to open again including schools. Wasn't my choice to shut the country down.

NoHardSell - 3 weeks furlough to 'save the nhs' then universal credit for those entitled to it.... The economy is royally fucked and people are too comfortable at home on full/almost full pay

Actually, for once the government did something for ordinary people, with a moderate income. Because let's face it, household bills didn't just shrink to 80%.
UC does not pay for mortgages or car loans and even council tax isn't scrapped on UC, only reduced.

How would those families survive?
And most people on furlough did not ask for it.

[quote Waxonwaxoff0]@Nohardsell er, I am not comfortable at home on full pay. I am anxious every day that I might not have a job to go back to. I would love to go back to work, but for that to happen everything needs to open again including schools. Wasn't my choice to shut the country down.[/quote]
No, I know, and I am sure you have lobbied hard to go back, written to your mp etc. The effects of millions of people doing that once they realised lockdown = no £, would have been even greater. As it is, the government has bought temporary compliance with a crap and pointless lockdown. The tipping point for lives lost, as said upthread, was about 6% hit to the economy. At 20% we are killing more people through the coming depression than saved.
I'm glad you lobbied for no furlough and a return to work though. It's about all we can do.

I think maybe it was too generous, 80% is a lot and when you consider the upper amount was £2500

I suppose if people hadn't been furloughed some of them ( those that were eligible) would have been claiming benefits instead although most likely not up to 2.5k a month !. The point of furlough was to protect jobs until the businesses can re-open so lets hope most can. It would be a nightmare for companies to let skilled staff go only to have to try and recruit again a few months down the line. Two of my teenagers have benefitted by being furloughed - my eldest student ds had only worked 2 shifts for McDonalds, hadn't even been properly trained and ended up furloughed on £60 a week. Even my 14 year old niece working in a pub has been furloughed. The cost of all this must be eyewatering. The government have also increased benefits for some despite many people saying their costs have decreased significantly. Many more people will now actually be able to claim Universal credit who wouldn't actually have qualified for it before thanks to the increase.

I work in a bank. I'm being made redundant because our cost to income ratio is too high due to all the mortgage holidays people have taken. So I might lose my house because other people have been able to keep theirs 😦

Swings and roundabouts.

Businesses were ordered to close. Not everyone could work from home. There would have been riots and refusals to close without furlough.