The UK’s latest jobs support plan is flawed, but a step to the right

Britain’s chancellor of the exchequer Rishi Sunak. Picture: WPA/GETTY IMAGES/JOHN SIBLEY

Sunak resisted for a mixture of understandable reasons. Furlough was always meant as a temporary measure designed for the extreme conditions of peak lockdown. Now the economy has reopened to some extent, it’s obvious that some businesses are failing for structural reasons. It makes little sense to keep pouring money into jobs that will disappear anyway.

To extend furloughing after so many vows to end it would have been a flagrant U-turn for the chancellor. Sunak is spoken of as a successor to Johnson, so he won’t want to have repeated the prime minister’s many policy reversals. Did he succeed? Probably in the short term, although the next few months are going to be far trickier for Sunak than the first phase of the pandemic.

At least that’s the hope. While the job support plan might help avoid a sudden unemployment shock when the furlough programme ends in October, it lacks the simplicity and scale of the earlier measures, so there may be unhappy consequences. Also, even though the wage-support measures will be much cheaper than furloughing, they won’t prevent an inevitable rise in joblessness. That will increase welfare costs.

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