Are we really all in this together?

“This health crisis has starkly demonstrated the gross inequality that disfigures our society but it also gives us an opportunity to change that.” Former Green MEP Molly Scott Cato explores the opportunity for the government to rewrite corporate governance and take control of key industries, establishing a more equitable economy which prioritises the climate in the wake of the coronavirus pandemic.

Greens announce Carbon Chancellor plans outside Treasury
Greens announce Carbon Chancellor plans outside Treasury

Image: Wikimedia Commons

Molly Scott Cato

We went into the coronavirus crisis with talk of levelling up and have been told throughout that we are all in it together.

The data tell a different story. They show that years of massive inequality and austerity have left some of our communities with chronic ill health and highly vulnerable to this deadly coronavirus. 

Work by the Office of National Statistics shows that twice as many people are dying in our most deprived communities compared to the richest. The Institute for Fiscal Studies found that death rates are much higher amongst Brits with an ethnic minority background. And it is clear that systemic and relentless racially based disadvantage means that these two findings are closely connected.

This health crisis has starkly demonstrated the gross inequality that disfigures our society but it also gives us an opportunity to change that. Research shows that people do not want to go back to the pre-crisis normal: a remarkable 90 per cent of people see this health crisis as an opportunity to do things differently both in terms of environmental protection and social justice.

Since all companies that make up our economy are reliant on public support to survive the crisis, the government has an unprecedented opportunity to rewrite the rules of corporate governance and to take control of key industries. 

A Green Chancellor would require additional conditions for those receiving public money during the Covid-19 economic emergency, which is likely to last years beyond the successful containment of the virus. Companies should not be allowed to pay out dividends, or bonuses, nor to buy back shares and no company registered in a tax haven should be eligible for public money. Government could also make the receipt of public money conditional on much greater fairness inside firms, moving towards the Green Party goal that nobody in any company should be paid more than 10 times the lowest paid employee of that company.

Far from imposing conditions, the Tory government is handing out money direct from the Bank of England with no questions asked. By mid-April, the government was already injecting cash into fossil fuel companies, including oil firms BP, Royal Dutch Shell and Total, through allowing its subsidiaries’ debts to be eligible for the Bank’s quantitative easing bond purchases. 

Although it is clear that renewables are proving more resilient through the crisis, governments elected from parties who depend on fossil fuel donations to win elections are propping up these dirty old industries that put all our futures at risk.

EasyJet, an airline that has typified the irresponsible expansion of aviation in recent years, with its model based on aviation-fuelled weekend breaks and trips that should have been made by train, has also benefited. It was the beneficiary of a £600-million loan from the government’s Covid-19 corporate financing facility. The loan had no accompanying conditions about a managed decline in capacity or even energy efficiency improvements. Our money is being handed out to a company that is one of the direct causes of the climate emergency.

In some cases, rather than imposing conditions, governments could use the massive decline in asset values to start to buy back some key industries to ensure that they could be in public or social ownership. Rather than giving bailouts to transport companies and other utilities, the government could take equity stakes or even full ownership. This would allow them to manage vital infrastructure and services in the public interest and, in the case of aviation for example, to manage a descent compatible with a net-zero carbon future.

The coronavirus crisis has demonstrated the fragility of our economic and social systems, but it has also shown that the vast majority of us are motivated by a desire for greater equality and by concern for our fellow citizens. 

As Greens we have to ensure that the Covid shock mobilises the feelings of compassion and justice that are the hallmarks of a civilized society and use them to build an economy that rejects the greed and waste of the past.