Covid-19 Jobs and Incomes package: IES response

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20 Mar 2020

Tony Wilson, Institute Director

Follow @tonywilsonies

I am delighted with the Chancellor’s announcements tonight on jobs and income.  At the beginning of the week, we called for urgent measures to support those facing redundancy or seeing their incomes fall, and the government’s announcement today – that it will pay those laid off up to £580 a week – goes much further than we had called for or expected.  This will protect millions of jobs.  We all now need to do all we can to encourage, support and cajole employers to take up these funds. 

The increase in the Universal Credit standard allowance, to around £94 a week, is also a big and positive step.  We wanted to see this increase by more, and believe that it may yet need to, but for now it will directly benefit more than 2 million low income households and many hundreds of thousands of new claimants.

The government deserves huge credit for the speed and scale of its response today, as do the many civil servants who will have worked tirelessly and with little recognition or thanks to put this package together.

At the same time however, today’s announcements were less positive for the five million self-employed – who will miss out on the lay-off scheme and will instead be reliant on Universal Credit.  The package also appeared to leave Statutory Sick Pay unchanged, which at £94 a week is just a quarter of a full-time minimum wage. This and Universal Credit need to rise, so that no-one need face the choice of isolating themselves and going out to work. 

Finally, the government will need to revisit soon the wider support available through the welfare system for those in financial distress.  Today’s announcement that benefits will cover private rents up to the thirtieth percentile of the local market is a modest improvement on now but will leave most renters facing rising debt, while many millions of households will find themselves needing more relief now on council tax and household bills in the coming months.

However, these are issues for next week.  For today, we should all recognise and welcome the huge steps taken and get on and make sure that all employers who are thinking of laying someone off instead take these up.

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.