The biggest civil unrest in decades is likely this autumn. Not all angry people are not going to sit quietly at home, fretting in silence when they realise what is happening to them is being done deliberately. They are going to take to the streets.
But who are they going to hang, Spuddo?
There is, though, the risk of moral hazard in this. That risk is that everyone might decide not to pay, whether they can or not. That cannot happen, so whilst Universal Basic Services must exist, those wanting to use them must be required to prove their need to use this service.
The idea should be open to all though, although those on benefits should not need to give further data on income based on the fact that they incomes will already be known. For everyone else, this data will be required, as will details of outgoings be needed for everyone involved.
Once this data is established (and this must be done as simply as possible) then an agreed maximum payment per month must be fixed, and be fairly and appropriately split between all those due to be paid.
The government could and should administer that payment scheme. So, the person in the scheme should make one payment to the government and the government should then pay those they owe for them. In effect, this is a creditor’s voluntary insolvency arrangement on a massive scale.
Importantly, this scheme has to be mandatory. In other words, anyone owed money by those in this scheme will have no choice but accept the payment that they as all that will ever be paid. It will not be an option for them.
And just to be clear, the amounts not paid will have to be written off: there will be be accumulating debt left behind which landlords and others might then use to evict tenants once this crisis is over. The payments made will cancel the full liabilities owing.
What about the companies owed money? They will say this is grossly unfair. But, let’s be honest, nothing about what is happening here is fair. War is not fair. The actions of the Bank of England are not fair. The UN Secretary General says that the energy companies are screwing us.
And let’s give a mention to the banks, who are going to profit massively from the additional interest payments due to them as a result of the increase on the interest rate on the funds they have technically deposited with the BoE as a result of the operation of QE.
To put that extra bank profit in context: they cannot make less than £14 billion extra profit next year as a result of the gains handed to them directly by the BoE. That’s not fair. So let’s not shed too many tears for them.
But, some companies will still complain and want support. And I think if they can make a case for it – on a case by case basis for companies of this size – they should get it. But the price should be that they hand over a share of their business for all the support they get.
There should be no handouts, grants or loans. If these businesses are under-capitalised to manage the losses which all large companies should be robust enough to withstand then they must pay the price for wanting the additional capital that they will demand from the government.
Great, innit? Bankrupt all the companies by letting folk off their bills. Then nationalise all the companies as they go bust.
What a plan!