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11 May, 2020 Open access

Coronavirus Job Retention Scheme should be extended for three months, with further extensions conditional on minimum pay and job quality standards, says think tank

New report urges government to ‘strike a balance’ between protecting workers and their incomes, supporting compliance with social distancing restrictions, and protecting viable businesses and the economy

The Coronavirus Job Retention Scheme should be extended for three months with further extensions conditional on minimum pay and job quality standards, the Learning and Work Institute has said.

In Next steps for the Coronavirus Job Retention Scheme, the Institute welcomes the success of the scheme in limiting the impact of COVID-19 on jobs and incomes, highlighting that its monthly cost - estimated as up to £14 billion for the 6 million workers that have been furloughed - is outweighed by the likely cost of not acting, including potentially large increases in unemployment and out of work benefit spending, and lasting damage to the economy.

In addition, the Institute warns that while some lockdown restrictions are likely to have been eased by the time the scheme ends at the end of June 2020, beyond that time the government will need to ‘strike a balance’ between supporting people to comply with ongoing social distancing restrictions, protecting workers and their incomes, protecting viable businesses, and enabling transition to a potentially very different labour market.

As a result, key among its recommendations to achieve this balance are to -

Commenting on the report, chief executive of the Learning and Work Institute Stephen Evans said -

‘The Coronavirus Job Retention Scheme has been successful in limiting the impact of the virus on jobs and incomes, and it has put us in a better place to bounce back from this crisis.

While it can’t continue indefinitely, a sudden withdrawal in support risks leading to a second wave of unemployment. The Chancellor should extend the scheme for three months, reform it to support a gradual return to work, and plan for a phased withdrawal of support in the autumn.

“The post-crisis economy will be very different, and we need to recognise that hundreds of thousands of furloughed workers may never be able to return to their jobs. So we need to be ready to support these workers through investment in skills, a jobs guarantee and a more generous safety net.’

For more information, see Extend and reform Coronavirus Job Retention Scheme to avoid ‘second wave’ of unemployment and help Britain back to work from learningandwork.org.uk