Tuesday, March 31, 2020

How Green Wage Subsidy/Basic Income can help us out of the Covid quagmire


House of Commons
London SW1A 0AA


Dear 

I hope you and your family, particularly your mother, are safe and well.

Thank you for listening to me at our last meeting. You asked me to flesh out the way in which my proposed scheme could be protected against cheating. I will now refer to GWS as Work Stimulus Scheme WSS http://www.greenhealth.org.uk/GreenEconom_files/WSS.htm, in order to remove any possible objections that might be raised on political grounds. I composed a reply to you soon after our meeting, but then lockdown came, and I have been diverted onto writing a piece on how to nurse a Covid patient at home, which has been very well received on social media.

WSS is exactly what is needed to help us to get through the pandemic and its economic impact.

The pandemic has caused two major problems, a lack of workers due to sickness and self-isolation and an excess of unemployed people due to lockdown. WSS will deal with both of these gnarly issues simply and directly.

There are three other subsidiary problems. First, a person with no savings who may have Covid symptoms or knows s/he is a contact, and who should therefore be self-isolating, will be motivated nevertheless to go to work and put others at risk rather than become destitute.  

The second problem is that there will be staff shortages at Job Centres, so that the supply of officials to help the unemployed will be greatly reduced at the same time as the demand on their services will be greatly increased.

The third problem is the Hungry Gap when people find a job, start work, and have to wait for four weeks between their benefit being withdrawn and their first pay check. I know that Ministers say this does not happen, but it is clear that it does happen in practice. You will be aware of what happens to social cohesion when people have no food.

An interesting aspect is that there will be a steady and increasing stream of people entering the labour market who have recovered from a bout of Covid, and therefore can be presumed safe to work reasonably freely in environments that would require Covid-naïve people to use PPE. These will need an Immunity Passport. Ideally the passport would need to be based on a test, but given the regrettable shortage of such tests, other certifying methods will have to be created.

Therefore, we need a universal safety net, and at the same time we need to remove all administrative blocks to people moving in and out of necessary work. The way forward is to remove the withdrawal of benefit that happens at the point when a claimant finds work in vital sections of the economy which are set out below. The new employer simply brings people in from the Job Centre, and on top of the benefit they receive, the new employee brings the wage up to the going rate for the job. The Job Centre simply notes on the record that the person has obtained work under the WSS.

At this point in time, the ability to hire workers easily, and at a low rate of pay, will be most welcome for the all employers, who are facing unprecedented cash flow problems.


The economically active groups who should benefit from WSS at present are:

1.      NHS
2.      Agriculture, particularly since there is expected to be a lack of seasonal pickers
3.      Education and schools
4.      Water supply
5.      Sewage services
6.      Power services
7.      Builders for vital work such as roof leaks
8.      Waste collection services and other departments in NSC

I do hope that you will agree that in the present situation, the removal of all the bureaucratic complexities arising out of moving from benefits to work is a perfect solution to what is otherwise a very major economic problem. I appreciate that the Treasury has already done a lot to meet the problem, but there is more that needs to be done. The beauty is that WSS does not need new money: benefit that is at present paid on condition that the recipient does no work, is still paid, but is now a subsidy to the vital, life preserving sections of the economy.

I look forward to hearing how you think we can take this forward.

Kind regards

 Richard

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