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UNLESS this government gets to grips with the spread of the coronavirus and unless it changes course on economic policy, workers across the country are going to face even further huge job losses and pay cuts. The poorest will be hardest hit, with black and Asian people once again bearing a disproportionate burden.
We do not have to accept this outcome. This week Unite’s Len McCluskey wrote to Boris Johnson demanding an extension of the furlough scheme otherwise there would be “an avalanche of job losses.”
Barely before the letter was sent the Confederation of British Industry (CBI) confirmed that threat and was reporting that fully half of its member firms were planning further lay-offs. This is in addition to the hundreds of thousands who have already lost full-time jobs.
The reason why the furlough scheme needs to be extended should be absolutely clear. The government has failed to get a grip on the virus and to suppress it. As a result, the economy continues to struggle and firms are laying off workers, or cutting pay in response. Disgracefully some are also firing and rehiring on worse pay and conditions and there has been an upsurge in the numbers of people on zero-hours contracts too.
This is the government’s responsibility. Under current economic conditions many firms judge that they are not viable with their current payrolls, in terms of numbers employed or their wage rates. No doubt there are some completely unscrupulous employers who see the current crisis as an opportunity to take drastic measures that would otherwise be unacceptable.
But it is the government’s responsibility to prevent that happening. Instead, by ending the furlough now, long before the virus is brought under control, it is almost inevitable that there will be lay-offs. In other countries they have avoided this cliff edge: France, Germany and Ireland have all extended their schemes.
They recognise that the short-term cost of extension is far outweighed by the long-term costs of mass unemployment, in wasted lives, poverty, lost output and, yes, lost tax revenues to the public sector.
We in the labour movement must also recognise that the economic crisis is engendered by the crisis in public health. The massive wave of job losses and pay cuts would not be happening without the coronavirus. Ending the virus is a public health imperative and an absolute precondition to returning to anything like economic normality.
As this government’s catastrophic performance shows, there is in reality no trade-off between protecting people’s health and protecting the economy. This country has one of the worst outcomes in terms of death toll and one of the worst outcomes in terms of contraction in GDP and job losses as well.
These two, the spread of the virus and the loss of jobs, are related. The idea that people’s health and lives could be put at risk in effort to get back to economic normality is grotesque and it is factually incorrect.
All the businesses and jobs in a host of sectors such as retail, hospitality, accommodation, travel, food, arts and leisure rely on people being relaxed, confident and with at least some degree of financial wellbeing. They cannot possibly return to normal while a pandemic is raging.
People cannot be forced to go out when they are in fear for their lives, even while the government’s ending of the furlough scheme is effectively forcing them back to work.
All of these sectors will continue be shuttered and haemorrhage jobs while the pandemic is not under control. In turn, this will have an impact back up the service sector supply chain, including food and drink manufacturers and others.
Only by defeating the virus is it possible to return to anything like normality. And it should be clear that the government is very far from defeating the virus. It is now widely understood that new cases are surging.
The renewed rise in hospitalisations is now also being reported in the media, along with a government call for the hospitals to be emptied in preparation for a much larger increase. Unfortunately, surging hospitalisations almost certainly means a renewed rise in deaths will follow.
I am pleased to say that the Socialist Campaign Group of MPs, Independent Sage, grassroots Labour activists and others have all raised the demand for a zero Covid-19 strategy.
Of course, this does not mean no-one should ever return to work until there is a vaccine. It does mean a serious and sustained lockdown until the virus has dwindled to very small numbers, and an effective test, trace and isolation system to catch the tiny numbers that may then arise.
This approach has been successful in China, New Zealand and Vietnam. There is no reason it cannot be adopted here.
The fear is that, faced with a renewed surge in cases, the government will panic and do a partial national shutdown for a fortnight. This will not defeat the virus. It will damage the economy and it will antagonise people even further when there is no decisive victory over the spread of the virus.
There is an alternative: it is to copy those successful countries and their effective lockdowns. As they show, you can return to normal, prevent deaths and save jobs once you have done that. That is what is required here. Now.
Diane Abbott is MP for Hackney North and Stoke Newington.
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