Chancellor right to extend furloughing – but wrong to stay silent on planned Universal Credit cut

Commenting on the Chancellor’s announcement today (Thursday) that the Job Retention Scheme and business loans schemes will be extended into April, Torsten Bell, Chief Executive of the Resolution Foundation, said:

“With public health restrictions continuing well into 2021, the Chancellor is right to extend furloughing and business support into April. The job of policy is to support firms and household incomes until the very positive news on vaccines is translated into a return to normality.

“The decision that employer contributions will be limited to National Insurance and Pension contributions over this period is also a welcome recognition of the toll the crisis is taking on firms. However, there is a case for better targeting support on the hospitality and leisure sectors most affected by ongoing restrictions.

“These latest extensions however make the Chancellor’s refusal to extent the boost to Universal Credit beyond March all the more baffling. Leaving six million families going through Christmas facing the prospect of having their incomes cut by £1,000 in a matter of months makes no economic or political sense.”