Covid-19 crisis: an open letter to the UK government

Below is an open letter to the UK government signed by 98 economists, academics and directors of research organisations, including CLES. An edited version first appeared in The Times on Monday 23rd 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.

Jo Michell, Associate Professor in Economics, UWE Bristol

Rob Calvert Jump, Research Fellow in Political Economy, Greenwich University

Diane Elson, Emeritus Professor , University of Essex

Danielle Guizzo, Senior Lecturer in Economics, UWE Bristol

Miatta Fahnbulleh, Chief Executive of the New Economics Foundation

Mary-Ann Stephenson, Director, Women’s Budget Group

Prem Sikka, Emeritus Professor of Accounting, University of Essex

Sunil Mitra Kumar, Lecturer in Economics, King’s College London

Jonathan Portes, Professor of Economics and Public Policy, King College London

Daniela Gabor, Professor of Economics and Macrofinance, UWE Bristol

Fran Boait, Executive Director, Positive Money

Jane Lethbridge, Principal Lecturer, Department of International Business & Economics, Faculty of Business, University of Greenwich

Nick Srnicek, Lecturer in Digital Economy, King’s College London

Mat Lawrence, Director of the Common Wealth think tank

Rob Palmer, Director of Tax Justice UK

Neil Lawson, Director of Compass

Joe Guinan, Vice President, The Democracy Collaborative

Laurie Macfarlane, Fellow, UCL Institute for Innovation and Public Purpose

Jackie Jones, Former Professor of Feminist Legal Studies Former MEP

Sarah Jayne-Clifton, Director of the Jubilee Debt Campaign

Michael Jacobs, Professor of Political Economy, University of Sheffield

Ania Plomien, Assistant Professor, Gender Studies, LSE

David Adler, Fellow, European University Institute

Neil McInroy, Chief Executive, Centre for Local Economic Strategies

Will Stronge, Director of Autonomy

James Meadway, Associate fellow at IPPR

Rebecca Tunstall, Professor Emerita of Housing Policy, Centre for Housing Policy, University of York

Juvaria Jafri, Lecturer in International Political Economy, City, University of London

Bruno Bonizzi, Senior Lecturer in Finance, University of Hertfordshire Business School

Andy Denis, Fellow Emeritus in Economics, City, University of London

Anna Laycock, CEO, Finance Innovation Lab

Guglielmo Forges Davanzati, University of Salento

Steve Keen, Distinguished Research Fellow, Institute for Strategy, Resilience and Security, University College London

Constantinos Alexiou, Professor of Macroeconomics and Policy, Cranfield University

Simon Wren-Lewis, Professor of Economic Policy, University of Oxford

Jonathan Perraton, Senior Lecturer in Economics

Sophia Kühnlenz, Lecturer in Economics, Manchester Metropolitan University

Frank van Lerven, New Economics Foundation

Jan Toporowski, SOAS University of London

Cem Oyvat, University of Greenwich

Neville R Norman, Universities of Melbourne  and Cambrdge

Pedro Mendes, Loureiro University of Cambridge

Mark Setterfield, New School for Social Research

Ewa Karwowski, University of Hertfordshire

Mary V. Wrenn of the West of England

Carolina Alves, University of Cambridge

Ozlem Onaran, Prof of Economics, University of Greenwich

Ingrid Harvold Kvangraven, University of York

Engelbert Stockhammer, Professor of International Political Economy, King’s College London

Deborah Dean, Associate Professor in Industrial Relations, Warwick Business School

Emanuele Lobina, Principal Lecturer, PSIRU, University of Greenwich Business Faculty

Ulrich Volz, Reader in Economics, SOAS University of London

Andrew Fischer, Associate Professor, Erasmus University Rotterdam

Dany Lang, Associate Professor, University Sorbonne Paris Nord

Ania Plomien, Assistant Professor, Gender Studies, LSE

Janet Veitch OBE, Chair, UK Women’s Budget Group

Karl Petrick, Associate Professor of Economics, Western New England University

Nina Eichacker, Assistant Professor of Economics University of Rhode Island

Yannis Dafermos, Lecturer in Economics, SOAS University of London

Duncan Lindo Vrije, Universiteit Brussel

Leslie Huckfield, Lecturer, Glasgow Caledonian University

Frances Coppola, Economist and author

Radhika Desai, Professor, University of Manitoba

Imko Meyenburg, Senior Lecturer, Anglia Ruskin University

Tony Yates, Resolution Foundation and Fathom Consulting

Richard Murphy, Professor of Practice in International Political Economy at City, University of London

Thomas Palley, Economist, Washington, DC

Andrew Cumbers, Professor of Regional Political Economy University of Glasgow

Howard Reed, Landman Economics

Trevor Evans, Professor of Economics, Berlin School of Economics and Law

Prof Pritam Singh, Visiting Scholar, Wolfson College, Oxford

Dr Jerome De Henau, Senior Lecturer in Economics, Open University

Dan O’Neill, Associate Professor in Ecological Economics, University of Leeds

Giorgos Gouzoulis, Research Fellow, University College London

Maria Nikolaidi, Senior Lecturer in Economics, University of Greenwich

Emanuele Citera, PhD Student, Economics Department, The New School for Social Research

Antonia Jennings, Rethinking Economics

Sara Gorgoni, Associate Professor in Economics, University of Greenwich

Natalya Naqvi, Assistant Professor in International Political Economy, London School of Economics

Jamie Morgan, Professor, Leeds Beckett University

Adotey Bing-Pappoe, Senior Lecturer, Economics, University of Greenwich

Alfredo Saad Filho, Professor of Political Economy and International Development, King’s College London

Simon Mohun, Emeritus Professor of Political Economy, Queen Mary University of London

Andrew Simms, Co-director Centre for Global Political Economy, University of Sussex

Giorgos Galanis, Senior Lecturer in Economics, Goldsmiths, University of London

Stefanos Ioannou, Research Associate, University of Oxford

Paul Mason, author and economics journalist

Ha-Joon Chang, Faculty of Economics, University of Cambridge

Frances Stewart, Professor emeritus, University of Oxford

Ann Pettifor, Economist

Stephany Griffiths, Economist

Will Hutton, Economist

Michael Edwards, Hon Prof, Bartlett, UCL

Josh Ryan-Collins, Senior Research Fellow, Institute for Innovation and Public Purpose, UCL

Josè D. Villadeamigo, Visiting Researcher, CEPED-FCE-UBA – Member of PIUBAD, Argentina9

Patrick Allen, Chair of the Progressive Economy Forum.

John Weeks, Professor emeritus at SOAS

Asad Rehman, Executive Director, War on Want