[UK] Chancellor urged to make CJRS permanent

The Coronavirus Job Retention Scheme (CJRS) was intended as a temporary measure but has been extended a number of times due to the ongoing impacts of the COVID-19 pandemic. Now, a think tank has urged UK chancellor Rishi Sunak to make the measure permanent, Express reports.

The Resolution Foundation said making furlough a more familiar fixture could be a help in managing unemployment and protecting people from financial challenges. The foundation’s latest report ‘In Need of Support?’ has examined the ways temporary measures like furlough and SEISS have reshaped the welfare state in the UK.

Additionally, the report suggestions what this could mean for reforms in the future, once the global pandemic has been managed. The think tank has called for the introduction of a policy known as “earnings insurance”, administered via the furlough scheme and SEISS.

It suggests that permanently moving to a new system of earnings insurance would be relatively inexpensive; at £900million a year, based on 2019 unemployment levels. However, the Resolution Foundation acknowledges this cost could rise, for example, to £3.25billion based on unemployment levels from 2009.

The proposed new system of earnings insurance would mean unemployment support is paid at 80 per cent of previous earning for three months. The intention is that such a policy would automatically protect those who lose their jobs if there were to be any future downturns.

This would also mean unemployed individuals would not have to wait for the Government to redesign support measures for each downturn.

Commenting on the issue, Mike Brewer - Chief Economist at the Resolution Foundation - said, “After a decade of cuts and reinvention via Universal Credit, the UK’s welfare system has been upended again by the COVID-19 pandemic.

“But the safety net that millions of new welfare recipients have relied upon, from furloughed workers to first-time UC claimants, has been very different.

“It has been far more generous than the system the UK had in place pre-COVID.

“The big challenge now is whether the UK’s post-pandemic welfare system should retain welcome new elements such as earnings insurance, and address key problems such as the low level of the basic safety net and sick pay.

“Simply returning to the old system is not good enough after what the country has gone through.”

The Coronavirus Job Retention Scheme (CJRS) was intended as a temporary measure but has been extended a number of times due to the ongoing impacts of the COVID-19 pandemic. Now, a think tank has urged UK chancellor Rishi Sunak to make the measure permanent, Express reports.

The Resolution Foundation said making furlough a more familiar fixture could be a help in managing unemployment and protecting people from financial challenges. The foundation’s latest report ‘In Need of Support?’ has examined the ways temporary measures like furlough and SEISS have reshaped the welfare state in the UK.

Additionally, the report suggestions what this could mean for reforms in the future, once the global pandemic has been managed. The think tank has called for the introduction of a policy known as “earnings insurance”, administered via the furlough scheme and SEISS.

It suggests that permanently moving to a new system of earnings insurance would be relatively inexpensive; at £900million a year, based on 2019 unemployment levels. However, the Resolution Foundation acknowledges this cost could rise, for example, to £3.25billion based on unemployment levels from 2009.

The proposed new system of earnings insurance would mean unemployment support is paid at 80 per cent of previous earning for three months. The intention is that such a policy would automatically protect those who lose their jobs if there were to be any future downturns.

This would also mean unemployed individuals would not have to wait for the Government to redesign support measures for each downturn.

Commenting on the issue, Mike Brewer - Chief Economist at the Resolution Foundation - said, “After a decade of cuts and reinvention via Universal Credit, the UK’s welfare system has been upended again by the COVID-19 pandemic.

“But the safety net that millions of new welfare recipients have relied upon, from furloughed workers to first-time UC claimants, has been very different.

“It has been far more generous than the system the UK had in place pre-COVID.

“The big challenge now is whether the UK’s post-pandemic welfare system should retain welcome new elements such as earnings insurance, and address key problems such as the low level of the basic safety net and sick pay.

“Simply returning to the old system is not good enough after what the country has gone through.”