Covid-19: The government must go further

This is an open letter to the UK government signed by 98 economists, academics and directors of research organisations, including the New Economics Foundation. An edited version first appeared in The Times on Monday 23 March 2020.

A welcome change but more is needed

We welcome the government’s new measures to support workers, particularly the introduction of grants for wage support. But despite the scale of these spending commitments, there is a real danger that millions of workers will not feel their benefit.

The government must move decisively to get cash into the bank accounts of households and firms before the economic dominos start to fall. Substantial support has been announced, which will be welcomed by many workers — but it will not reach all who need it. The government is certainly moving in the right direction, but the new measures will fail to reach all workers, and could take until the end of April to come into force.

More clarity is also needed on the announcement that the government will provide grants to businesses, covering up to 80% wage costs to a limit of £2,500 per worker. If these grants reach the businesses that need them, they could prevent millions of redundancies. But there is no assurance that every business that needs support will receive it: the government needs to specify if the payment is more or less automatic, how it will get into firms’ accounts quickly and how it will ensure that this cash translates into wages at the end of the line.

Stipulations against layoffs need to be in place

A further problem with the announced plans is that no stipulations are placed on firms keeping workers on payroll. Financial support for firms must come with conditionality: at a minimum, no workers are to be laid off. People are losing their jobs right now — the government must act immediately to stem the flow. Without this stipulation put in place immediately, firms — and their payroll systems — will be shutting up shop in the intervening period, simply precluding the possibility of utilising the government’s ​‘Job Retention Scheme’.

The self-employed are left out in the cold and need urgent support

The 5 million people who are self-employed will have taken little comfort from last Friday’s announcements. Greater support is needed. The expansion of an already overburdened Universal Credit system to cover the self-employed will make little difference. While a worker on PAYE could receive up to £2,500 per month, a self-employed worker might only receive statutory sick pay — £94.25 per week.

It is our understanding that self-employed workers who have filed tax returns with HMRC in the past could be supported within days of a governmental decision. As HMRC already holds the bank account details of these workers, it would simply be a matter of paying cash into their accounts.

Universal Credit will not be able to cope or deliver

Universal Credit is going to wilt under the pressure of new unemployed applicants in the coming weeks and months. Other than a minor improvement in levels of income support, no support has been announced for those outside of formal employment, unemployed persons, those receiving personal independence payment, or others without a current employer such as university students. For these people, immediate removal of means-testing from current social security payments should be introduced as a matter of urgency.

We applaud the government for taking advice from the TUC and CBI, and recent measures move very much in the right direction. But it must go further — time is of the essence. Economic collapses become increasingly difficult to arrest if they are allowed to continue unabated, and there is a real risk that this recession could turn into a major depression. We call on the government to convene a cross-party task force as a matter of urgency to strengthen the measures announced last Friday.

1. Jo Michell
   (Associate Professor in Economics, UWE Bristol)
2. Rob Calvert Jump
   (Research Fellow in Political Economy, Greenwich University)
3. Diane Elson
   (Emeritus Professor , University of Essex)
4. Danielle Guizzo
   (Senior Lecturer in Economics, UWE Bristol)
5. Miatta Fahnbulleh
   (Chief Executive of the New Economics Foundation)
6. Mary-Ann Stephenson
   (Director, Women’s Budget Group)
7. Prem Sikka
   (Emeritus Professor of Accounting, University of Essex)
8. Sunil Mitra Kumar
   (Lecturer in Economics, King’s College London)
9. Jonathan Portes
   (Professor of Economics and Public Policy, King College London)
10. Daniela Gabor
    (Professor of Economics and Macrofinance, UWE Bristol)
11. Fran Boait
    (Executive Director, Positive Money)
12. Jane Lethbridge
    (Principal Lecturer, Department of International Business & Economics, Faculty of Business, University of Greenwich)
13. Nick Srnicek
    (Lecturer in Digital Economy, King’s College London)
14. Mat Lawrence
    (Director of the Common Wealth think tank)
15. Rob Palmer
    (Director of Tax Justice UK)
16. Neil Lawson
    (Director of Compass)
17. Joe Guinan
    (Vice President, The Democracy Collaborative)
18. Laurie Macfarlane
    (Fellow, UCL Institute for Innovation and Public Purpose)
19. Jackie Jones
    (Former Professor of Feminist Legal Studies Former MEP)
20. Sarah Jayne-Clifton
    (Director of the Jubilee Debt Campaign)
21. Michael Jacobs
    (Professor of Political Economy, University of Sheffield)
22. Ania Plomien
    (Assistant Professor, Gender Studies, LSE)
23. David Adler
    (Fellow, European University Institute)
24. Neil McInroy
    (Chief Executive, Centre for Local Economic Strategies)
25. Will Stronge
    (Director of Autonomy)
26. James Meadway
    (Associate fellow at IPPR)
27. Rebecca Tunstall
    (Professor Emerita of Housing Policy, Centre for Housing Policy, University of York)
28. Juvaria Jafri
    (Lecturer in International Political Economy, City, University of London)
29. Bruno Bonizzi
    (Senior Lecturer in Finance, University of Hertfordshire Business School)
30. Andy Denis
    (Fellow Emeritus in Economics, City, University of London)
31. Anna Laycock
    (CEO, Finance Innovation Lab)
32. Guglielmo Forges Davanzati
    (University of Salento)
33. Steve Keen
    (Distinguished Research Fellow, Institute for Strategy, Resilience and Security, University College London)
34. Constantinos Alexiou
    (Professor of Macroeconomics and Policy, Cranfield University)
35. Simon Wren-Lewis
    (Professor of Economic Policy, University of Oxford)
36. Jonathan Perraton
    (Senior Lecturer in Economics)
37. Sophia Kühnlenz
    (Lecturer in Economics, Manchester Metropolitan University)
38. Frank van Lerven
    (New Economics Foundation)
39. Jan Toporowski
    SOAS University of London
40. Cem Oyvat
    University of Greenwich
41. Neville R Norman
    Universities of Melbourne and Cambrdge
42. Pedro Mendes Loureiro
    University of Cambridge
43. Mark Setterfield
    New School for Social Research
44. Ewa Karwowski
    University of Hertfordshire
45. Mary V. Wrenn
    U. of the West of England
46. Carolina Alves
    University of Cambridge
47. Ozlem Onaran
    Prof of Economics, University of Greenwich
48. Ingrid Harvold Kvangraven
    University of York
49. Engelbert Stockhammer
    Professor of International Political Economy, King’s College London
50. Deborah Dean
    Associate Professor in Industrial Relations, Warwick Business School
51. Emanuele Lobina
    Principal Lecturer, PSIRU, University of Greenwich Business Faculty
52. Ulrich Volz
    Reader in Economics, SOAS University of London
53. Andrew Fischer
    Associate Professor, Erasmus University Rotterdam
54. Dany Lang
    Associate Professor, University Sorbonne Paris Nord
55. Ania Plomien
    Assistant Professor, Gender Studies, LSE
56. Janet Veitch OBE
    Chair, UK Women’s Budget Group
57. Karl Petrick
    Associate Professor of Economics, Western New England University
58. Nina Eichacker
    Assistant Professor of Economics University of Rhode Island
59. Yannis Dafermos
    Lecturer in Economics, SOAS University of London
60. Duncan Lindo
    Vrije Universiteit Brussel
61. Leslie Huckfield
    Lecturer, Glasgow Caledonian University
62. Frances Coppola
    Economist and author
63. Radhika Desai
    Professor, University of Manitoba
64. Imko Meyenburg
    Senior Lecturer, Anglia Ruskin University
65. Tony Yates
    Resolution Foundation and Fathom Consulting
66. Richard Murphy
    Professor of Practice in International Political Economy at City, University of London
67. Thomas Palley
    Economist, Washington, DC
68. Andrew Cumbers
    Professor of Regional Political Economy University of Glasgow
69. Howard Reed
    Landman Economics
70. Trevor Evans
    Professor of Economics, Berlin School of Economics and Law
71. Prof Pritam Singh
    Visiting Scholar, Wolfson College, Oxford
72. Dr Jerome De Henau
    Senior Lecturer in Economics, Open University
73. Dan O’Neill
    Associate Professor in Ecological Economics, University of Leeds
74. Giorgos Gouzoulis
    Research Fellow, University College London
75. Maria Nikolaidi
    Senior Lecturer in Economics, University of Greenwich
76. Emanuele Citera
    PhD Student, Economics Department, The New School for Social Research
77. Antonia Jennings
    Rethinking Economics
78. Sara Gorgoni
    Associate Professor in Economics, University of Greenwich
79. Natalya Naqvi
    Assistant Professor in International Political Economy, London School of Economics
80. Jamie Morgan
    Professor, Leeds Beckett University
81. Adotey Bing-Pappoe
    Senior Lecturer, Economics, University of Greenwich
82. Alfredo Saad Filho
    Professor of Political Economy and International Development, King’s College London
83. Simon Mohun
    Emeritus Professor of Political Economy, Queen Mary University of London
84. Andrew Simms, Co-director
    Centre for Global Political Economy, University of Sussex
85. Giorgos Galanis
    Senior Lecturer in Economics, Goldsmiths, University of London
86. Stefanos Ioannou
    Research Associate, University of Oxford
87. Paul Mason
    Author and economics journalist
88. Ha-Joon Chang
    Reader in Political Economy of Development at the University of Cambridge
89. Frances Stewart
    Professor Emeritus, University of Oxford
90. Ann Pettifor
    Economist
91. Stephany Griffiths
    Economist
92. Will Hutton
    Economist
93. Michael Edwards
    Hon Prof, Bartlett, UCL
94. Josh Ryan-Collins
    Senior Research Fellow, Institute for Innovation and Public Purpose, UCL
95. Josè D. Villadeamigo
    Visiting Researcher, CEPED-FCE-UBA — Member of PIUBAD, Argentina
96. Patrick Allen
    Chair of the Progressive Economy Forum.
97. John Weeks
    Professor emeritus at SOAS
98. Asad Rehman
    Executive Director, War on Want

Picture by Andrew Parsons /​No 10 Downing Street (CC BY-NC-ND 2.0)