A central part of the answer has to be building a robust cash transfer system. Ideally, this would have happened six years ago, in the midst of the pandemic, but doing so now would still be vastly preferable to doing so later, so we can be ready for when the next crisis arrives – just as Germany was better placed to adapt to the 2008 financial crisis through the Kurzarbeit scheme.
Any new system needs to include some form of basic income: a regular, unconditional payment to all UK residents that can be dialled up or down depending on the severity of what the country is facing. In a stable period it can be set at a modest level, providing a floor beneath people’s feet. Then, when a crisis hits – say when energy costs explode, or supply chains collapse, or a health emergency shuts down the economy – it is ready, waiting, as one of the first levers that the government pulls.
Of course, there are obvious costs to this system, but as UBI advocates have been saying for generations now, the cost of not having such a system is already being paid – through the damage to lives when millions of people cut back on heating and food; through the damage to the economy when consumer spending dries up; and the damage to our politics when civil unrest buttresses false narratives peddled by the far right. Universal payments that go to everyone, including the wealthy who will help fund it through taxation, would build the broad coalition of support that makes the system durable across governments and crises. Heavily targeted systems simply can’t achieve that buy-in.
Three crises in, we now understand that the infrastructure we need is not akin to a pop-up shop but rather requires a long-term change to the circuitry of our economy. The question is whether we build it before the next crisis, or simply stumble into one with the same cluelessness once again.