Bailouts are back, thanks to coronavirus. Now they must help people, not corporations | Zoe Williams | Opinion

As Easyjet grounds its flights and Richard Branson asks his considerable airline workforce to take eight weeks of unpaid leave, it is plain that the state will soon step in.

Rudimentary details of such action are already out there: workers furloughed rather than fired, with the government paying 80% of their wages. This, rather than putting money directly into the hands of the individual, makes sense: it will be better for any economic recovery if people with jobs keep them, if companies don’t go bust.

However, it is unlikely that covering the payroll will be enough to forestall disaster for many firms, and the word “bailouts” has roared back into fashion. As a talking point, bailouts were largely furloughed five years ago. All that state money of the 00s, poured into saving corporations, then clawed back from social safety nets around the world, was so much spilt milk for many people. But if we’re going to do it again, we must do it differently.

Many failures – individual, institutional and systemic – went into creating the financial meltdown of 2008, but it is the failure of the social response that resonates now. It looked like a vindication: ultimate capitalism, when push came to shove, needed ultimate socialism in order to survive. Surely, after that, nothing could go back to the way it was? Well, we failed utterly to appreciate the audacity of wealth, and the masochistic appeal of political narratives that blamed us all for a crisis that the unimaginably rich created.

The analogy with the present emergency is not exact, of course, since it is nobody’s fault. But if we’re going to bail out large corporations and businesses, there need to be some conditions. The Democratic senator Elizabeth Warren has already laid this out in the US, and many of her points apply internationally. Any company being bailed out must maintain their payrolls and use funds to keep people employed; they’re permanently barred from share buybacks, which is one way to funnel state aid directly to shareholders; they should be prohibited from paying out dividends or executive bonuses for three years; and a minimum of one seat on the board should be given to a representative from the workforce. No union agreement can be renegotiated under the relief programme. Warren’s proposal also includes a requirement of a $15 minimum hourly wage, which the UK could frame as a living wage requirement (an actual living wage; not George Osborne’s ersatz “national living wage”).

There is another opportunity here: use state aid to curtail tax avoidance. No company that isn’t headquartered in the UK should receive help from the British government. The measure doesn’t have to be vindictive – companies can re-domicile. But if you want the protection of the state, you have to pay tax to that state.

And these conditions can be agile, building in fixes as the situation unfolds: write requirements against price gouging, particular to Sports Direct (although it denies any wrongdoing), or if Wetherspoons gets a bailout demand that its founder, Tim Martin, pay smaller suppliers.

Every sector is having specific crises: grounded planes and shuttered pubs face different challenges to agriculture, where demand has never been more insistent but there’s a shortage of workers. Yet what they all have in common is that, socially, we need them to survive and we need them to emerge from this moving towards a decarbonised and fruitful workplace. Airline bailouts could also require a plan for carbon reduction. The thinktank Common Wealth proposes that agricultural subsidies be used to drive sustainability, rewilding and better forestry techniques and soil management. These deeper measures, which are about the next 50 years rather than five months, can be jointly established by government, employers and employees, whose interests are the same: hibernation with the promise of reawakening to something better.

We are now in an era of intense generosity: we want individuals, families, small businesses, large corporations, life as we know it to survive, and there is no space in that for parsimony. No meaningful bean-counting will save more than it costs.

But if we’ve gone beyond counting the cost, we have also implicitly accepted that there are more important motives than profit. This is the time to talk about what pro-social business activity means: what a company’s responsibility is to the state, to its workers and to the future, and how those responsibilities can be enshrined in legislation and culture, so that we don’t emerge from this dark period into business as usual and Austerity 2.0. We can build something bold and important with our new spirit of cooperation, but it won’t build itself.

Zoe Williams is a Guardian columnist

Source link