Rishi Sunak considers benefits freeze and public sector pay freeze to pay for Covid crisis.

[HeIenaDove]

www.mirror.co.uk/news/politics/rishi-sunak-considers-freezing-benefits-22712652?utm_source=twitter.com&utm_medium=social&utm_campaign=sharebar

Rishi Sunak has looked at a freeze on benefits and public sector pay to fight the spiralling cost of the coronavirus crisis, it is reported today.

Sources failed to rule out the crushing blow to millions of workers and the poorest - just a few years after long austerity freezes finally ended.

The Chancellor is also said to be trying to persuade Boris Johnson to suspend the "triple lock" on pensions, reports the Mail on Sunday - amid fears it will artificially rise due to the economic turmoil.

A Treasury source downplayed the reports, emphasising that the government previously said there would be no return to austerity.

However, the department failed to rule out the claims, saying it would not comment on future tax or spending decisions

When I say we went up 1%, that was a pay rise, first in a decade. Whoopee.

[quote cardibach]We’ve spent less on this than on bailing out banks in 2008. And it could easily be covered via cancelling some other shot - Hs2 almost does it in its own. If lockdown proved anything it was that we don’t need to get from London to a Birmingham 20 mins quicker.
www.independent.co.uk/news/uk/politics/coronavirus-furlough-cost-how-much-banks-bailout-trident-hs2-a9514231.html[/quote]
Agree about HS2. Why are we spending billions on 20th century technology when we should be investing in 21st century tech that means we don't need to travel?

@cardibach

You do realise that HS2 is an infrastructure project which comes out of capital spending.

The budget will be allocated and spent throughout the course of the project- over the course of decades. The government is not spending £40 billion at once.

Lockdown has taken hundreds of billions out of the economy effectively overnight and we cannot afford for the dame to happen again (particularly when the government has huge funding pressures from the NHS and new benefits claims).

Hope iit applies to MPs and PM. Can't believe life is so hard for him on 150K per year.

A Treasury source downplayed the reports, emphasising that the government previously said there would be no return to austerity.

They should be held to this.

Austerity measures don't help the economy they just help a few disaster capitalists make vast profits.

The economy will recover when people have money in their pockets and feel safe to go out and spend it.

The private sector and the charity sector are doing pay freezes too plus tens of thousands (probably way more) of redundancies.

Of course public sector pay is going to be frozen but at least there is a bit more job security there.

How did you think this economic crisis was going to be paid for?

A lot of the Publuc Sector workers I know were big lockdown supporters.
Largely, I suspect, because their incomes were 'safe' during lockdown, and they were too frightened of the virus and too dumb too see this sort of thing coming. They deserve every part freeze coming.

For the ones who didnt support lockdown or who are on benefits, i have nothing but sympathy.

My public sector pay has been frozen for 10 years now anyway, well I got a £20 per month pay rise last year, but that's been it. Also my T&Cs have worsened in that time too so I have had a fairly large pay drop. So this news re: pay doesn't bother me.

Reducing working age benefits is really shit though. I don't agree with that at all.

Full Universal Credit is approx £400 per month and there's no housing benefit for people with mortgages. There are going to be many more people needing that safety net but it's not enough to cover housing, food, bills and household emergencies.
The idea of cutting that back is ludicrous.
And it's not fair that so many people received furlough pay while others had to accept UC in the past few months. The money should have been spread more fairly to support those really struggling through no fault of their own.

@AriettyHomily

I'm private sector and taken a ten% cut. I'm just grateful to have my job.

You do know that the people who you are going to protect by wearing a mask are shop workers, bus drivers and healthcare workers who are not the wealthy. There's some horrible stats around the rates of infections in all of those groups.

Of course it's not a shock that the poorest in society are going to be hurt more than the wealthy, it's the way things always are.

How did you think this economic crisis was going to be paid for?

The question should read 'How did you think this economic crisis was going to be paid for in Britain?'

After 2010 Britain went the austerity route whilst other European countries went for investment. They recovered faster. The same will be true again.

Britain chooses this response.

We should definitely invest our way out of recession. I don't understand economics well at all, but I understand it well enough to know that it is nothing like our own personal finances. With our own budgets, we have to balance money in with money out. With a nation's finances, economies do well when money is moving around and poorly when no money is moving.

When the poorest people have more money, every penny of it moves. It all flows back into the economy. This is why when people talk about quantative easing, newer methods talk about giving that money directly to the public, rather than into the banks.

At the beginning of the pandemic, there was a lot of concern about stock markets crashing. In many ways, I think that furlough could be seen from an economic point of view more as quantative easing, rather than a relief fund.

“Morals aside, large numbers of desperate and destitute people will eventually turn to other ways of obtaining food and shelter. Crime rates will go up and up and up.
There's a very real risk of serious social unrest if we continue down this road.”

I agree. It’s about a hierarchy of needs - if our basic physical and safety needs aren’t met we will do whatever it takes. Morals will go out of the window. It’s basic psychology.

Additionally: Crime rates and mental health issues rise along with rises in inequality (mental health issues for all BTW not just those that are worse off).

This must be done fairly. It should not create a greater divide. ideally, IMO, it should be used as a way of making things more fair and address the imbalance.

But...

[quote Ecosse]@cardibach

You do realise that HS2 is an infrastructure project which comes out of capital spending.

The budget will be allocated and spent throughout the course of the project- over the course of decades. The government is not spending £40 billion at once.

Lockdown has taken hundreds of billions out of the economy effectively overnight and we cannot afford for the dame to happen again (particularly when the government has huge funding pressures from the NHS and new benefits claims).[/quote]
Yes, I do realise that. Capital spending could be redirected though. That money has only been earmarked for capital spending because of HS2 if we accept that it is a)unnecessary and) an environmental disaster and stop it, we can use the money for something else... we’ll be recovering over decades too. There’s money when they want it.
And still, costs of pandemic nowhere near what we found for the banks.

@ roarfeckingroarr

Have you considered that without all these props to boost house prices, they would be cheaper and leave you with more spare money every month. Remember the 90's when people bought a house with one income and the second was disposable income?

When the poorest people have more money, every penny of it moves. It all flows back into the economy. This is why when people talk about quantative easing, newer methods talk about giving that money directly to the public, rather than into the banks.

Yes and this model was followed by Germany after 2010, very effectively.

Interesting to note both France and Germany extending furlough to avoid the economic seizure Britain is going to create.

@Treebore

A lot of the Publuc Sector workers I know were big lockdown supporters. Largely, I suspect, because their incomes were 'safe' during lockdown, and they were too frightened of the virus and too dumb too see this sort of thing coming. They deserve every part freeze coming.

For the ones who didnt support lockdown or who are on benefits, i have nothing but sympathy.

As a public sector worker I support a pay freeze. We have all got to do our bit to pay this all back and deal with the fallout. We can't pretend we can carry on as normal. The people wanted the lockdown but it comes with a price.

However, nurses should be exempt and get a pay rise.

Public sector here and no surprise that pay will be frozen as it has been for the past decade - I never expected this government to ever pay public sector workers better - even before Covid when we saw pay rising in the private sector.

However - I would like to see big successful companies and wealthy pensioners have to share their spoils to aid the recovery also.

Of course he's going to 'consider' all options.

Doesn't mean he will pick them.

Tabloid Scaremongering. Wait and see what he decides. Pretty sure he won't have made his mind up yet.

@roarfeckinroarr - public sector exempt from pay rises? What planet are you living on? I have worked for the same Gov Dept for 13 years. I am already effectively being paid for 4 days and working 5 due to pay freezes and inflation. If this continues I will shortly be earning minimum wage, and I'm not the lowest grade!! My DH (also CS) retrained to do his job (specialist) and is now earning HALF what he was earning when I met him almost 30 years ago - and that's ignoring inflation...

Remember the 90's when people bought a house with one income and the second was disposable income?

I remember the 80s when we definitely needed 2 incomes to buy our first house, and we had to give the building society a list of our outgoings to prove we could afford the repayments.

My parents in the 1950s lived in a caravan for 5 years whilst they saved up a deposit. They needed 2 incomes as well.

And public sector workers have already been badly affected by 10 years of either no pay rise or 1% max. Not only have public sector wages been significantly reduced by the effects of inflation, there is also a knock on effect on pensions

My parents in the 1950s lived in a caravan for 5 years whilst they saved up a deposit. They needed 2 incomes as well.

They probably didn't go on foreign holidays every year either and obviously wouldn't have had expensive smart phones and other such gadgets.

Not to blame people. The economy runs on cheap credit. Hence the panic that people aren't wasting their money buying 3 pound coffees every day and overpriced sandwiches.

@LimaFoxtrotCharlie

And public sector workers have already been badly affected by 10 years of either no pay rise or 1% max. Not only have public sector wages been significantly reduced by the effects of inflation, there is also a knock on effect on pensions

I started my job just after 2010 and it was considered a decent wage. A decade later and it's barely gone up at all and the job has got a lot more challenging and harder. Now we're looking at another decade of austerity and pay freezes to pay the cost of Covid and Brexit.

It is what it is. 'Just grateful to have a job' will be the general reaction.

@LimaFoxtrotCharlie

Remember the 90's when people bought a house with one income and the second was disposable income?

I remember the 80s when we definitely needed 2 incomes to buy our first house, and we had to give the building society a list of our outgoings to prove we could afford the repayments.

My parents in the 1950s lived in a caravan for 5 years whilst they saved up a deposit. They needed 2 incomes as well.

I was talking about the average house and average incomes. If someone wanted to buy a fancy house in the 80's obviously it might have needed 2 incomes. There are freely available stats around that show house prices were 3x income and now it's 8x or 10x in lots of places. That's because single income has changed to joint income.