Chancellor’s Omicron support package offers badly needed help for firms, but totally ignores workers facing income falls

The Chancellor’s £1 billion support package announced today (Tuesday) rightly provides targeted support to firms affected by the economic hit from Omicron, but does nothing to help the many thousands of workers who will also be affected, and suffer a huge income hit over Christmas and into next year as a result, the Resolution Foundation said today.

The Foundation notes that a single earner on £15,000 stands to lose 70 per cent of their income if they lose their job during the current Omicron wave, compared to 60 per cent of they had lost their job in an earlier wave, or 20 per cent if they’d been furloughed.

Many of those on zero- or short-hour contracts may also see big income falls as their hours are cut back. Around 1.5 million hospitality and leisure workers were furloughed in the early 2021 lockdown.

Mike Brewer, Chief Economist at the Resolution Foundation, said:

“The Chancellor is right to have announced fresh support to deal with the economic hit being dealt by Omicron, and right to have targeted it on the worst affected sectors. With surging case numbers doing real economic damage irrespective of whether further restrictions are introduced, it’s right to proceed with economic support immediately.

“However, the scale of support to firms is sufficient only for a best-case scenario of a flash wave, while the lack of fresh support for workers leaves many at risk of major income falls in the weeks ahead. Those losing their jobs or having their hours cut during this wave of the virus will see far greater income falls than those affected earlier in the pandemic.

“Having been the defining economic policy success of the pandemic so far, it is disappointing that the Chancellor has not yet reopened a targeted furlough scheme to provide a living standards lifeline during a tough period for so many workers.”