Furlough

Room 101 Image ©Kel Harvey

Yesterday's leader in the Guardian Journal criticised the just-rolled-out Eat Out To Help Out scheme introduced this week by the  chancellor, Rishi Sunak. It points out the obvious weaknesses in the reasoning behind the scheme, principally the flawed notion that people are being put off re-engaging with the hospitality sector on grounds of cost as opposed to simply being anxious about so doing.

Ed Miliband in the same paper on Tuesday raises the issue of the fundamental structure of the economy, that rolling back to a pre-Covid model will serve only the wealthy in the short term and damage society irrevocably in the medium and long terms. That the government is seeking to end the furlough scheme so soon into this pandemic is a good indicator, as Miliband says, that they simply see this as a short-term irritation blocking their over-arching plans to wrest control of the economy; pulling it away from the scrutiny of democratic process and passing it solely into the hands of the financial sector, of which they themselves are both participants and beneficiaries.

The pandemic is very much in its early phases and still pretty much an unknown quantity. Its impact on business will be long term and those sectors worst affected will be those currently partially aided by the furlough scheme. If this is ended as prematurely as the government intend, many will fail and we will see an astronomic rise in unemployment, leading to a further depression of the economy as more and more people are taken out the economic loop, spending less and depending on the State for benefits to survive. Ultimately, many of these smaller businesses will wither and never return, leaving the door wide open for large-scale corporates with deep pockets and access to practically unlimited borrowing. That many of the government's number are so deeply embedded in this world raises the worrying suspicion that this might indeed be a deliberate strategy.

If this is even partly the case, the country's fate rests on the opposition parties finding some way to combine forces with dissenting voices within the Tory party to override the majority and force Johnson's increasingly out of control cabal to change direction before it's too late.

The prime minister should really take heed of the Financial Times leader of Wednesday last, both on extending the furlough and in the potential role of the WTO post-pandemic. But I suspect that he might find it too taxing reading more than a hundred or so words in one sitting, given his glaringly obvious inability to focus on anything but the nest he's busily feathering for himself and his tribe.

As the FT leader sums up on furlough, 'The virus is entering a new phase; so too should government support.' The economy is such  a delicate feedback loop that veering wildly back to Plan 'A' will upset it for a generation, inducing a depression that will take years if not decades to reverse and then only by employing the economic and fiscal measures this government seems so wary of; taxation, spending and a healthy & well-supported public sector.