Tue 5 May 2020: ill-informed speculation

My lovely employers originally “furloughed” me (and I still think that’s a ghastly word) until the end of May, as that was how long the government’s “job retention scheme” ran for. It has since been extended until the end of June, although I hope that if the economic shutdown starts to lift before then my job will pop back into existence earlier – I know that some jobs have already started to come back to life.

The news is also full of stories about the government withdrawing the scheme. That probably won’t happen before the end of June but I would expect it to start after that. And so it should. While the government is subsidising people like me to not work, it is running up a large debt that will have to be paid back, either in the form of higher taxes or reduced expenditure. Both are politically difficult for the current Conservative government, but it would also be wrong to not do so and just pass the debt on to the next generation. So I wonder if they might turn the post-June scheme into something like student loans, which are in reality an opt-in tax on high-earning graduates. Even though a high-earning furlough tax would mean higher taxes for me I would support that – I’m a well off chap who has benefited from the scheme, so the burden of paying for it should fall disproportionately on my shoulders.

Of course, if that does happen I shall do some prudent tax-planning and immediately start looking for a new job. I’ve already taken an effective 50% pay cut for approaching three months, I’m disinclined to incur tax liabilities that will effectively cut my future earnings on top of that. And that is exactly what the government will want to happen as the economy opens back up – they will want those who can work to, well, work. The furlough scheme was always only a short-term measure to prevent a huge depression as people like me immediately stopped all discretionary spending.