COVID-19 crisis: An open letter to the UK Government calling for faster and more far-reaching action

The Lab has signed an open letter to the UK government along with 97 economists, academics and directors of research organisations. An edited version first appeared in The Times on Monday 23 March 2020. You can read the full letter below.

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.


Signed

  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 Cambridge
  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, University 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