Covid-19 Crisis: Questions for the Chancellor
Date Posted: Tuesday 17th March 2020
Nearly a week on from the Budget and it is already clear that the £12bn package that the Chancellor announced will be insufficient to meet the growing crisis.
The Budget marked a dramatic change of direction for the Government with a significant increase in public spending. Yet, just a few days down the line the precarity of jobs, people, and public services are coming to the fore and demanding serious questions of the new Chancellor. After a decade of austerity, Covid 19 has exposed the critical state of our public services and the extent to which our social security system is letting down people when they need it most.
The Nuffield Trust has warned that “the NHS starts in a deep hole after a decade of underfunding and understaffing” and questioned what additional health spending can be spent on in the short term with existing staff vacancies and beds full to capacity. The report by the Imperial College team advising the Government on Covid 19 reveals the alarming implications of this lack of capacity on the ability of hospitals to cope with the expected surge in demand for critical care beds. Similarly the additional money to help social care services cope with Covid 19, (£5bn shared with the NHS and other local services), has to be seen in the context of sustained underfunding that has left social care in crisis even before the pressures caused by the virus.
Large numbers of people are expected to fall ill with Covid-19 over the next few months and many will have to self-isolate. Others will be unable to work because they are caring for the sick, or, if schools are closed, providing childcare. In the short term there will be inevitable job losses in the travel and tourism and hospitality sectors. Bars, restaurants, cinemas, theatres and shops will close leading to major job losses. Workers in the travel industry are already being laid off or told to take unpaid leave. The economy is facing a major shock in demand for goods and services and supply (as workers are ill or have to take time off).
Covid 19 is highlighting the poor level of protection provided by the social security system, which should provide a safety net in these situations. Over 14 million people in the UK are already living in poverty, hit by successive cuts and freezes to benefits. More than half of low to middle income families have no savings at all. Nearly 70% have less than £1,500. Statutory sick pay is only £94.25 a week and is not available to the self-employed or low earners leading to fears that people will continue to work when they are sick.
The changes announced in the Budget did little to address this underlying problem. The Government is due to announce further spending measures today. Key issues include:
- How will the health and social care systems cope with huge demand for care given the tens of thousands of job vacancies, hospital bed shortages and consequences of a decade of under-funding? The extra funding announced for the health service will clearly be welcomed but it takes time to recruit and train new nurses or build new hospitals. Calling on retired healthcare workers to return to work will involve exposing those who are most vulnerable to the virus to repeated infections.
- What are the plans for increasing testing, particularly of healthcare and social care workers? Current advice to all those with even minor symptoms to self-isolate will mean many critical workers are at home when they do not in fact have the virus and people who are carrying the virus but asymptomatic will still be working.
- We need international collaboration to develop and produce a vaccine; a global crisis needs global solutions.
- What action is planned to urgently address the crisis in social care? Large numbers of people are already not getting the care they need; this situation will only get worse as care workers fall ill or have to self isolate.
- What plans are in place to replace unpaid carers, some of whom are providing 24 hour care for people with high needs if they become ill or advised to self isolate?
- Self isolation is likely to increase levels of domestic violence and abuse. How can victims/survivors get support in this situation?
- How will the already overstretched, understaffed and ill-designed social security system handle the influx of people ‘signing on’ due to widespread job losses in the retail, hospitality and travel industry? How will the Government continue to justify the 5-week wait?
- Statutory sick pay is only £94 a week and one in five workers are not eligible even for that. How will the Government ensure people are able to pay rent, buy food and cover essential bills if they fall ill or have to self-isolate?
- What will the Government do to support small businesses to withstand the impact of loss of business?
- If schools close and hospitals are only able to keep the most vulnerable patients in, women’s unpaid care work is made visible to all. Will women be, once again, be forced to take on this burden or will the Government acknowledge that is the very bedrock of our economy always and at times like these and value it accordingly?
- To what extent will the Chancellor and the new Government continue with a new “Conservative-Keynesian” approach observed on 12 March once this crisis is over? Will we continue to see fiscal stimulus and necessary spending to rebuild the economy or, will there be a repeat of the austerity policies of the last decade to the detriment of women and the poorest and most marginalised people once again?
We haven’t faced a health crisis on this scale since the 1918 flu pandemic. We have learned very quickly how our lives are interlinked. And we have seen how a decade of under-funding of our social infrastructure has left the UK vulnerable.
We need urgent action from the Government to address this crisis in the short term. And when it is over, we need to think about how we can do things differently.