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12 May, 2020 Open access

Ending Coronavirus Job Retention Scheme too soon risks second surge in unemployment, says Resolution Foundation

New report calls for scheme to be extended to partial furloughs, with employers contributing to furloughed workers’ wages

Ending the Coronavirus Job Retention Scheme (CJRS) too soon risks a second surge in unemployment, according to a new report from the Resolution Foundation.

In Getting Britain working (safely) again - The next phase of the Coronavirus Job Retention Scheme, published today ahead of the announcement from Chancellor Rishi Sunak on the future of the scheme, the Resolution Foundation argues that, while the CJRS has helped the UK to avoid depression-era levels of unemployment, decisions about its future are much more complex than it’s 'relatively straightforward' introduction, and that -

'Moving too quickly could cause a second surge in unemployment, while moving too slowly would fail to support the recovery.

The mass unemployment risk of moving too quickly is particularly high as the sectors of the economy that hired new workers during the last crisis – hospitality and retail, which accounted for one in five job entries in 2010 and 2011 – are among the hardest-hit this time around.'

To avoid the risk of a further spike in unemployment, the Resolution Foundation therefore makes a number of recommendations, including that -

Commenting on the report, Resolution Foundation Chief Executive Torsten Bell said -

'The government should reject calls to swiftly end the CJRS. Moving too quickly could spark a huge second surge in job losses at a time when unemployment already looks set to be at the highest level for a quarter of a century....

The retention scheme could end up costing almost £50 billion. That’s a huge sum – but money well spent given the huge threat posed to our health, economy and living standards by this pandemic.

This policy has made a huge difference in this crisis. It now needs careful and gradual change to ensure the benefits it has provided are secured rather than squandered'

For more information, see Ending the Job Retention Scheme too soon risks a second surge in unemployment from