Full CJRS needs to remain in place for several months after public health restrictions have been lifted, and then only phased out gradually

Resolution Foundation highlights that more than 20 per cent of workers who have been furloughed for at least six months of the Covid crisis either expect to lose their jobs in the next three months, or have been told that they will be made redundant

The full coronavirus job retention scheme (CJRS) needs to remain in place for several months after public health restrictions have been lifted, and then only phased out gradually, the Resolution Foundation has said.

In a new report, Long Covid in the labour market, the Resolution Foundation examines the state of the labour market during the current Covid lockdown, the cumulative impact of the longer than expected crisis so far, and workers’ prospects for the months ahead as the economy starts to recover.

Highlighting that almost two million workers were unemployed or fully furloughed in January – and had been for at least six months - the Resolution Foundation says that, while the outlook for the economy has improved, many workers remain concerned about their own job prospects -

'Around 8 per cent of workers currently employed either expect to lose their jobs in the next three months, or have been told that they would be made redundant. This figure rises to 21 per cent among those who have been furloughed for at least six months of the crisis.'

As a result, the Resolution Foundation says that the Chancellor of the Exchequer should respond to the risk of 'long Covid in the labour market' by setting out his own roadmap for phasing out the CJRS that is sensitive to public health restrictions and the sectoral nature of the crisis -

'The report calls for the full CJRS to remain in place for several months after public health restrictions have been lifted to give firms time to bring staff back, and remain in place for longer in sectors still subject to legal restrictions, such as hospitality and leisure. The CJRS should then be phased out by gradually, increasing the minimum hours required of workers in order for support to be provided.'

Nye Cominetti, Senior Economist at the Resolution Foundation, said -

'While the UK’s economic prospects are finally looking up, job insecurity remains high, particularly among those who have spent long periods not working, or who are currently furloughed.

The Chancellor must use his Budget to set out his own roadmap for phasing out the furlough scheme gradually and in a way that acknowledges where the risks of rising unemployment are highest – in sectors like hospitality.

This would keep a lid on rising unemployment and encourage firms to bring back existing workers, while tax breaks on hiring could help more people to move jobs too.'

For more infomation, see Almost two million workers have not worked for at least six months of the crisis.