Well worth reading this exchange, published yesterday, summarizing Treasury select committee concerns about the UK governments’s financial support to the economy with a detailed reply from Chancellor Sunak (The Stride- Sunak correspondence, Mel Stride mp is the committee chair)
The Sunak letter (13 pages including a 10 page annex) is a comprehensive summary of all the financial support provided by the government, both for households and businesses, and response to the many concerns raised.
His overall view “As I stated at the press conference on 14 April, unfortunately we can’t guarantee to protect every business and every household. However, our planned economic response aims to be as comprehensive as possible whilst delivering support as quickly as we can to those who need it.”
Credit where credit is due. HM Treasury has done a lot. The furlough scheme will be a very important first defense against mass unemployment. There are though some worrying examples of civil service niggardliness and twisting of facts.
Here is one example of what seems to be their defensive and self justifying mindset:
Committee question: “Many people fall the wrong side of the £50,000 threshold in the Self-employment Income Support Scheme (SEISS). These people should not suffer such a huge economic hit. Their savings are their pensions.“
HMT Response: “Not all those in self-employment will need extra support. In order to target support at those most in need, the government has chosen to cap this scheme. The criteria for the scheme means 95% of people who receive more than half of their total income from self-employment are eligible. The average income of those who earned more than £50,000 in 18/19 was more than £200,000. It is not right for the government to be giving money to individuals with higher average incomes who are more likely to have access to savings and other resources.”
This average income of £200,000 is not at all a good reason to refuse all help to someone with self employed earnings of £55,000! Why not a tapering of the scheme so that support gradually falls to zero as income rises from £50,000 to £150,000?