Covid-19 furlough scheme: a bonanza for big business
While thousands of workers find themselves without a job, bosses are cashing in on the ‘free money’ of the furlough scheme.
A new word has entered the popular vocabulary. Instead of being laid off when Covid-19 called time on production, workers are now told they have been furloughed.
What is the difference between being laid off and being furloughed? Well, the theory is that this way, when the economy emerges on the other side of the health emergency, you can have your old job back – on the somewhat risky assumption that your employer will still be around to employ you as the economic crisis continues to darken post-Covid.
The other difference between being furloughed and being laid off in the old-fashioned way is that the government is, under certain conditions, undertaking to foot 80 percent of your employer’s wage bill.
It has been clear from the start that this scheme, blazoned forth as a generous helping hand for the country’s beleaguered workforce, is intended first and foremost to subsidise big business.
From the worker’s viewpoint, he is getting a 20 percent pay cut and kept dangling in the fragile hope that his company may be one of the survivors in the storm to come.
From the commanding heights of monopoly capitalism, conversely, the view is more enticing, with the prospect of a veritable bonanza funded from the public purse. The Office of Budget Responsibility (OBR) estimates the cost of the furlough scheme to be £42bn.
A recent survey by the High Pay Centre think-tank has made clear who is really hoping to reap the benefit of all this taxpayer largesse. The Times sums up the survey’s most galling conclusions, to wit:
“Bosses of leading publicly quoted companies who have paid themselves as much as £46m over the past five years are using the taxpayer-funded furlough scheme.
“Eighteen FTSE 100 companies that are intending to take advantage of the scheme on average paid their chief executives £3.6m a year over the past five years and paid £293m each in dividends to shareholders, according to the High Pay Centre.
“The think-tank’s report shows that in the past five years these companies have spent a combined £321m on chief executive pay and £26bn in dividends.” Among the biggest rogues in this gallery are such companies as Melrose (steering the engineering giant GKN), Compass and Taylor Wimpey.
The Times continues: “There were at least 18 FTSE 100 companies and 23 percent of FTSE 250 companies intending to access the coronavirus job retention scheme.” (Companies using furlough scheme paid bosses £321m by Alex Ralph, 27 April 2020)
The average annual pay for a chief executive at one company, revealed the High Pay Centre, was enough to cover more than 200 households’ annual universal credit claims.
Whilst at one pole, wealth concentrates in ever fewer hands, at the other gathers the stark misery of ever more working-class families.
