The UK government is taking unprecedented measures to tackle the economic impact of this pandemic. This includes both corporate and individual welfare.
I already ranted about corporate welfare in my last post. Now it’s time to hate on the government some more.
I’m not exactly in favour of handouts. Full stop. It doesn’t matter whether these are to a business or to individuals who have made poor decisions. Both people and businesses should take responsibility for their actions or lack thereof.
In my opinion, giving out handouts increases reliance on the government and reduces a society’s capacity to look after itself. Big business has learned that they can continue to take big risks because the government will be there if the shit hits the fan. Same for the little guy, who feels he will always be taken care of by Mr Government – from cradle to grave. Nobody needs to work on improving themselves, inventing new services/goods etc – what’s the point? You will be OK. Right?
It’s a slippery slope. Many handout programs also make it difficult to get off handouts as your income would then reduce, rather than go up. Why go to work for £1,000 p.m. net if you get to lazy around at home and collect £600 without any travel or work expenses? (full disclosure I don’t know what the actual numbers for benefits are, but the point remains valid)
Having said that, I feel that bailing out the little guy seems more palatable to me. Companies with big pockets should be able to plan for contingencies, but the average Joe is clearly more vulnerable and may not have the resources or capacity to even consider this. This is a societal failure. This is a government failure.
We should all be taught to save for a rainy day, invest wisely – not just in the stock market, but in yourself – your education and your skills. Basic financial education needs to be a core part of the curriculum.
Almost 10 million UK households had no savings whatsoever in 2017. Wow! What a sad state of affairs! Even the smallest emergency would cause massive hardship for these guys. It’s so easy to end up in debt and before you know it you’re bankrupt. As a wealthy nation, the UK should do better.
The government is now paying salaries for people who can’t work due to Covid-19. This is 80% of salaries up to £2,500 per month with loads of terms and conditions, which are complicated to understand. This is another failure of the government – they look like the good guy trying to help out their people. But they make it difficult to navigate the benefits system (probably on purpose) so that fewer people apply for it. It’s quite genius when you think about it – politicians and bureaucrats will later say they helped everybody get back on their feet when trying to get re-elected. Never mind they made it difficult to access these benefits.
It is what it is. I hope things improve and that people learn from this crisis. Stay safe!