Thursday 30 April 2020

Furlough Fraud: Does It Matter?

... He maketh His sun to rise on the evil and on the good, and sendeth rain on the just and on the unjust alike

As so often, the Bible has it right.  Or, to quote a lesser authority (Mr Dillow): 
Ordinarily, we should worry about the distributional impact of support packages, incentive effects and whether systems will be gamed. In a crisis, though, these are low priorities. What matters is that the support be immediate and large. If your house is on fire, you should not worry about your carpets getting wet. You should put the fire out and clean up the mess later. 
Gamed?!  Outright fraud would be more like it - I am sure we could all recount a long list of the individual cases we are personally aware of.  Dillow's piece is headed "When rules don't apply"; and as a soldier, it's always necessary to remind junior officers that ruthlessness in action is what's needed.  (Your average subaltern is nicely brought up, and inclined to find a gate in a wall instead of driving clean through it.  "A farmhouse is obscuring my line of sight ..." - Then flatten it!)

So - do we care?   Is the point of 'helicopter money' to just get people spending?

I don't think it's quite as easy as that, even if there's a point that needs recognising.   But.  War-profiteering is one thing: outright theft is another.  People of good will on both the Right and the highly-redistributive Left ought to be distressed at the thought that, "when this is all over", the de facto distribution that will have taken place is disproportionately to more-or-less organised criminals.  That's what happened to Russia in the 1990's, and the legacy of that era is pretty awful.

Thoughts?  Solutions?



david morris said...

I've yet to see any public condemnation of the chancers & grifters who appeared out of the ether to suck on the teat of taxpayer largesse post Grenfell.

E-K said...

Yup. Always the risk when you resort to Marxist economics.

Nick Drew said...

Grenfell? Well, judges have been banging them up

Timbo614 said...

What choice is there Nick? If the economy is going to go to 1930s depression levels then we have to use the money tree for "helicopter money" or we use it for Social security/dole/whatever.
I think a better choice would be a Job Guarantee scheme, the govt. should keep people working at least notionally. The are lots of things that need doing generally in our environment. So if the govt. is going to pay people the the country may as well have something to show for it. Unfortunately for our service based office workers most of these jobs would be manual at least they would get fit and possibly lose some weight!
If this is done or attempted then one last point is that the "money" should not come via the banksters but by direct BoE lending to the govt.

Anonymous said...

I'm pretty stunned at how badly it's been handled, it's British bureaucratic pigheadedness at it's very worst.

A temporary UBI and a pausing of minimum wage laws would have allowed for firms to furlough staff, accounted for the self-employed and those who recently moved jobs. Instead it's been a mess.

Then there's been the tale of the grants and loans.

It's all had an air of the Gordon Brown about it - a tragic desire to micromanage and control, when simply getting the broad bush out would more than suffice.

It's fortunate that few wish to make the government's life more difficult, but that will pass, and I imagine Starmer has found himself surrounded by political weapons handed to him and the time to muse what to use, and when.

Anonymous said...

My neighbour is a plumber.
He’s furloughed both his sons, not sure of his status.
All three are still out working.

Anonymous said...

Ditto my mother's physio: has furloughed herself but keeps working - cash only!

Old Git Carlisle said...

The only fair thing is to investigate a significant proportion of claims then if there is a fiddle found make an example of those responsible.

Unfortunately we have system of taxing self employed that appears to encourage sailing close to the wind.

I have long been persuaded that what I understand is the Norwegian system of publishing tax returns is a good control mechanism.

Similarly all state payments to individuals and companies should be in the public domain.

Also consolidated statements of payments (expenses and fees) to elected representatives and Quango members.

Or am I just a spoil sport ?

APL said...

"Outright fraud would be more like it"

You thought Grenfell Tower assistance fund was a crap shoot.

You ain't seen anything yet!

Anonymous said...

How does UBI help.

It assumes everyone has an equal rent and equal mortgage.

In my own family, mortgages go from, £1000 a month
To £8000.

Saying, here’s £80 a week, won’t be much use.

Bill Quango MP said...

I know of several people, including own wife, who could not be furloughed. Started new job. Anyone who left a job in February for a new one, gets nothing.
Not registered for tax at either new or old job. My own PA, left on 24th feb. Can’t be furloughed by me. Or her new employer. It’s a loophole.

ALL bricks and mortar business got £10,000 or £25,000 from their council. This is, effectively, a return of rates paid. But, the bakery, will not have closed. Will have been busier than ever. Same with any food shop. Many that have closed, are doing Inline delivery and are as busy as being open.

If people have furloughed their staff, and are then paying them, they will be paying them cash. Wages are the largest expense of a business.
So whatever they are doing will all have to be undeclared to hide it. Cash only. The plumber scam only works on a 100% cash.

Bill Quango MP said...

A point raised earlier. Business pushing through things they have long wanted, but were unable.

Royal Mail announced they will not deliver letters on the weekend, this is temporary, they say. As it means with a reduced workforce, they can still continue their service.

But, RM management have wanted to end Saturday delivery for a very long time. Twenty years, or more. The unions won’t wear it.

Weekend delivery currently requires a ‘sixth day’ worker. RM could have just one worker on a weekend, for every five they need currently.
If they need deliver letters. Only parcels. That’s a game changer for them. Huge shedding of mail workers who currently deliver unprofitable, loss making letters on a Saturday.

Unions will go ape. They know it’s job losses. But it’s quite an easy sell for a workforce. Mon-fri. Only work One Saturday in five. And get Monday Tuesday off when you do. No painful letters on a weekend, either. How about it.?

I can’t see this ‘temporary’ measure being revoked.

Anonymous said...

Amex have forced me to go paperless, because "maybe the postal service will become unreliable".

Sobers said...

"Amex have forced me to go paperless, because "maybe the postal service will become unreliable"."

You can log on to your account and undo that change, I have just done so.

estwdjhn said...


100% cash or if the employee is on hourly pay the proceeds can be split between the employer and the employee as "overtime" ...

E-K said...

Is China going to be made to pay for any of this ?

I'm not so bothered about fraud then. So long as it gets spent in the economy eventually (and not on Chinese imports until they get their act together and open themselves up to inspections.)

Yes. Very tough times ahead.

Don Cox said...

"Is China going to be made to pay for any of this ?"

How on Earth could that happen ?

The problem in China was that middle-level civil servants tried to cover up a nasty problem for fear of getting into trouble with their superiors. That kind of behaviour is common in middle management everywhere.

It was made worse in China by the menacing authoritarianism of the current man at the top, which makes admitting there is trouble really dangerous.

As for the origin of the virus, it doesn't really matter much whether it escaped from a lab or came directly from an animal in the market. The latter seems to be more likely. The markets are full of animals, and wild animals are full of viruses.

It would be very wrong for China not to have research labs studying viruses, when several epidemics have already started there. Whether the lab was badly located or badly run is a different question.

Don Cox

E-K said...

What do we owe them in debt ? At what rate do we pay them back ? That's how *it happens*.

The problem is that we don't know what's coming out of there next and for all we know another virus could be on its way already. Why not ? How would we know ?

For a nation so obsessed with elf 'n' safety that we have announcements everywhere saying "please hold onto the handrail" and "don't drink" printed on disinfectant bottles we have a blind eye turned to China's lack of hygiene in her meat markets - that's presuming best case scenario.

APL said...

The airline industry is ashes. £20 billion off GDP.

Rumour has it, Rolls Royce is laying of a large part of it's aerospace division.

So much for the Airbus wing production Bristol.

I'd say no need for Heathrow terminal 5

HS2 traffic projections are down the crapper. So that waste of time and money can be cancelled.