11.7 million unemployed as British capitalism collapses – socialist revolution the only answer

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AS MANY as 11.7 million people will be thrown out of work – either through being furloughed or simply being sacked – in the coming months, according to the Resolution Foundation.

The Foundation released its damning assessment yesterday, the day that the Tory coronavirus Job Retention Scheme (JRS) came into operation.

From yesterday, businesses can apply to have 80% of the wages of furloughed workers, up to a cap of £2,500 a month, paid by the government.

In addition, the government is committed to paying employers’ National Insurance while employees will still be liable to pay income tax and national insurance on their furloughed wage.

Under JRS, bosses who apply to join the scheme will then be expected to pay their workers and reclaim the money from HM Revenue and Customs. Employees can only be furloughed for a minimum of three weeks and the scheme is due to close at the end of June.

When Tory chancellor Rishi Sunak first announced this scheme – as a way of trying to keep a lid on the massive unemployment resulting from the wholesale closure of industry and businesses – he estimated that only three million would be furloughed.

Now the Resolution Foundation, working on estimates based on the most up to-date figures from the Office for National Statistics (ONS), calculates that over eight million people will apply. This represents 41% of all private sector employees.

This figure of over eight million assumes that all employees at closed businesses are furloughed rather than laid off and made unemployed. In fact, the day the scheme opened saw a flood of applications from businesses with 67,000 claims from employers being made in the first 30 minutes of opening.

When Sunak announced this scheme last month – as part of his £350 billion bail-out of British capitalism – it was hailed as a means by which workers would be kept on the books of these businesses ready for the expected economic recovery after the coronavirus pandemic had been ‘defeated’.

All the talk was of the crisis being V- or U-shaped – in other words, a sharp decline followed by an equally sharp recovery. In fact, rather than a V- or U-shape the crash of the UK economy is clearly an I-shape, crashing down with no recovery, just a collapse into recession and depression.

The overwhelming majority of these businesses are in the low-paid service sector – Thatcher’s Tories destroyed most of British industry in the 1980s boasting the UK only needed a service industry – they will not re-open.

The JRS scheme will only keep them going on paper so long as the taxpayer picks up the wages of their workers, and when that ends they will throw in the towel officially and close down.

As for the Tories guaranteeing a subsidy in the form of 80% of workers’ wages while furloughed, this actually represents a 20% wage cut for the lowest paid workers who still have to pay rent and buy food for their families.

At the same time 3.7 million are unemployed and not covered, including all the self-employed gig economy workers and those on shorter working hours, along with all those thrown out of work back in February, and are forced to rely on Universal Credit.

Nearly one million workers applied for Universal Credit in the last two weeks of March, up from the 100,000 applications normally made in this period.

11.7 million are being driven into poverty by a scheme devised by the Tories as a desperate attempt to keep capitalism going through the crisis. Mass unemployment on a scale not seen since the 1930s Great Depression (not for nothing known as the ‘hungry thirties’) is the only future capitalism holds for the working class.

The only way forward for the working class is to take independent action to ensure that they do not pay for capitalism’s crisis, by mobilising to bring down the Tories and bring in a workers’ government that will expropriate the capitalist class and go forward to socialism.

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