U.K. Urged to Adopt Furlough-Style Benefits After Covid Crisis

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The U.K. government should expand its social safety net to expand furlough-type payments to those who lose their jobs even after the pandemic, said a prominent research group campaigning for those on low pay.

The Resolution Foundation said the government should introduce a form of earnings insurance, where unemployment support is paid at 80% of previous pay for three months. The measure would cost 3.25 billion pounds ($4.5 billion) a year if the jobless rate was similar to the level in 2009 and less than 1 billion pounds if it were near 2019 levels.

That policy would echo the payments made to those temporarily laid off during the pandemic, a move credited with prevent a wave of joblessness in the past year. It would help address criticisms of the U.K. welfare system, which is one of the least generous in the developed world, according to the Institute for Fiscal Studies.

U.K. Urged to Adopt Furlough-Style Benefits After Covid Crisis

It would “mean those losing their jobs are automatically protected in future economic downturns, rather than having to rely on governments redesigning unemployment support in every crisis,” the Resolution Foundation said Thursday.

Households took on more debt and suffered a bigger hit to incomes during the pandemic than those in France and Germany partly because the British system is so rigid even though payments know as Universal Credit were increased during the crisis.

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