With labour market crisis likely to accelerate over winter, government must protect the incomes of those most affected, says Resolution Foundation

Key recommendations in new 'Jobs, jobs, jobs' report include maintaining £1,000 boost to universal credit and working tax credit, extending grace period for benefit cap, and continuing suspension of MIF

The government must protect the incomes of those most affected by the coronavirus (COVID-19) pandemic as evidence points to the labour market crisis accelerating over the winter, the Resolution Foundation has said.

In a new report, Jobs, jobs, jobs: Evaluating the effects of the current economic crisis on the UK labour market, the Resolution Foundation highlights that difficult times lie ahead for workers and the labour market - particularly in areas such as hospitality and leisure - and argues that policy makers should act now, despite the uncertainty of how the coronavirus pandemic and the economy will develop, to protect the incomes of those most affected, limit the rise in unemployment, and enable people to play their part in suppressing the virus.

Analysing evidence from a survey of more than 6,000 working age adults, the Resolution Foundation finds that the employment effects of the COVID-19 crisis have borne down particularly hard in London, and in the most deprived areas of the country, and it therefoe calls on the government to - 

• retain the £1,000 a year boost to universal credit and working tax credit beyond April 2021;
• extend the grace period during which the benefit cap does not apply where the claimant has been in sufficient work over the previous 12 months;
• continue the suspension of the Minimum Income Floor for self-employed universal credit claimants;  
• ease the capital rules in universal credit;
• improve the financial incentives to self-isolate, either by raising statutory sick pay and extending it to the two million low earners who are not eligible, or by broadening eligibility for the £500 self-isolation payment; and 
• extend the full furlough version of the Job Support Scheme to firms that are not legally required to close, but which in reality cannot open.

In conclusion, the Resolution Foundation says - 

'This approach ... is far from easy, bringing significant fiscal costs and implementation challenges. But it crucially has the advantage of being based on the world, and labour market, as we find it rather than as we wish it to be.'

For more information, see Jobs, jobs, jobs: Evaluating the effects of the current economic crisis on the UK labour market from resolutionfoundation.org