How to throw good money after good

Budget 2021 and the challenge of delivering a rapid recovery from Covid-19

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While the strength of the economic recovery from Covid-19 will depend on the vaccine rollout and the Government’s ‘road map’ for easing social distancing restrictions, it will also depend on decisions taken at the Budget which are the economic counterpart to that reopening plan. This paper assesses the economic context to the Budget: how the … Continued

Half-measures

The Chancellor’s options for Universal Credit in the Budget

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The Government has still to decide on whether to continue the £20 per week uplift to Universal Credit (UC) and Working Tax Credit (WTC), due to expire in just 45 days. There are suggestions the Chancellor will opt for a halfway house of keeping the uplift for six months. Compared to the pencilled-in default of … Continued

Long Covid in the labour market

The impact on the labour market of Covid-19 a year into the crisis, and how to secure a strong recovery

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This is the third time we have written a report taking stock of the impact of the virus on the labour market. Nine months on from our first report in June last year, some things are similar. The health effects of the second wave may be starting to recede, and thoughts are again turning to … Continued

Getting ahead on falling behind

Tackling the UK’s building arrears crisis

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This briefing note examines how families have managed their housing costs over the Covid-19 period. Although the Government has done much to support families over the past year (not least via the furlough scheme and the £20 per week uplift to UC), it is clear that financial strain has grown as the pandemic has worn … Continued

On firm ground?

The impact of Covid-19 on firms and what policy makers should do in response

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The coronavirus crisis has had huge repercussions across the economy, and the corporate sector is no exception. This paper analyses how the crisis has affected firms’ finances, puts that in context compared to previous recessions, and assesses the ability of firms to contribute to the post-crisis recovery. This is important because firms’ investment and hiring … Continued

Pandemic Pressures

Why families on a low income are spending more during Covid-19

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Household spending has fallen during the Covid-19 pandemic, but not for many of those on the lowest incomes. This note brings together data from representative surveys with vivid accounts from parents and carers participating in the ‘Covid Realities’ research programme to explore the reasons behind, and consequences of, the cost pressures that many have faced since the pandemic began.

Lockdown lessons

What 2020 has to teach us about the difficult weeks ahead

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2021 begins with England and Scotland heading into new lockdowns, and tough ones at that. Lasting until at least late February, England’s new restrictions are more comparable to those of spring 2020 than the more relaxed autumn affairs. In this short note we focus on the experience of that first lockdown, and what it can … Continued

Home and away

The UK labour market in a post-Brexit world

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This briefing note considers a number of ways in which the labour market could be affected as the UK moves to a tighter, post-Brexit immigration regime in January 2021. Under the new rules, legal avenues for low-skilled migrant workers to enter the UK will be more restrictively drawn, with implications for firms, resident foreign-born workers … Continued

Time out

Reforming Statutory Sick Pay to support the Covid-19 recovery phase

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In a pandemic, sick pay should play a crucial public health role, as well as providing income protection. But the UK’s Statutory Sick Pay is low by international standards, and misses out two million of our lowest-paid workers. Evidence suggests that this contributes to the low level of compliance with the legal obligation to self-isolate … Continued

Here today, gone tomorrow

Putting Spending Review 2020 into context

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This briefing note provides an assessment of the measures announced in the November 2020 Spending Review. The backdrop to that Review was the reality of an on-going health crisis and a huge hit to the economy which looks set to leave lasting damage to both household and public finances. In response, the Chancellor has ramped up coronavirus spending this … Continued

The Covid state

Analysis of the economy and public finances ahead of the 2020 Spending Review

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The Chancellor is set to unveil his Spending Review against a radically changed economic and fiscal backdrop to the one he faced in March. Although unemployment is set to peak lower and later than had been expected back in the Summer, the long-term economic scarring from this crisis is set to be significant. The OBR’s … Continued

Caught in a (Covid) trap

Incomes, savings and spending through the coronavirus crisis

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In this briefing note we examine how the family finances of working-age adults have been affected since Covid-19 gripped the nation this spring. Drawing on new data from a representative survey of 6,000-plus working-age adults fielded in mid-September, we take a close look at how incomes, spending and saving changed during both the lockdown (April … Continued

Unhealthy finances

How to support the economy today and repair the public finances tomorrow

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This report provides analysis of the dual challenges faced by the government: ensuring that there is sufficient fiscal support through the crisis and recovery, and setting fiscal policy on a sustainable long-term path. Some argue it is unsustainable to provide the massive government support during the crisis, while others see little constraint on government borrowing … Continued

The Bank of England’s options for supporting the economy

Lessons from the US

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Ahead of this week’s Monetary Policy Committee meeting, we discuss what recent changes to how US policy makers approach setting interest rates might tell us about what additional support the Bank of England could provide in the face of a second national lockdown. The most important change was the introduction of a ‘flexible average inflation … Continued

Wake me up when November ends

The economic outlook amid Lockdown II

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We’ve got less than 48 hours until a second national lockdown in England begins, and who knows how long until it comes to an end. Pubs, hotels, and hairdressers’ doors will close again across England – as they have been in Wales since 23 October – with the significant tightening of restrictions representing the final … Continued

Failed safe?

Enforcing workplace health and safety in the age of Covid-19

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This briefing note is part of a three-year programme of research exploring labour market enforcement generously funded by Unbound Philanthropy. Using a new survey of 6,000-plus UK working-age adults fielded in September this year, and administrative data from the enforcement agencies themselves, we explore how workers, employers and the regulators have responded to the threat … Continued

Coping with housing costs, six months on…

New findings from the Resolution Foundation's Covid-19 study - wave two

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In this spotlight, we use results from a new Resolution Foundation/Health Foundation survey to explore the impact that housing costs are having on living standards as the COVID-19 crisis continues to unfold. Despite some improvements in the labour market since the spring, housing costs continue to be a serious concern for many households as they … Continued

Jobs, jobs, jobs

Evaluating the effects of the current economic crisis on the UK labour market

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This report highlights which groups of workers have struggled the most as the coronavirus crisis has evolved, who is at risk as the Coronavirus Job Retention Scheme is replaced by the Job Support Scheme, and the prospects for the future.

Sorting it out

The Chancellor moves to fix the Job Support Scheme

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The Chancellor has sharply, and rightly, changed course to make Job Support Scheme (JSS) a functioning short-time work scheme, addressing its central flaw. Slashing the share of wages for hours not worked that employers must pay from 33 to just 5 per cent will make a big different to the cost of using the scheme. … Continued

Back to the furlough

U-turn to retain furlough scheme in closed sectors paves way for fresh lockdowns

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The short-lived attempt to set economic policy as if we were leaving the pandemic behind us is over, with the Government announcing that it will pay two-thirds of wages of employees in firms forced to close because of national or local restrictions. This will provide much needed support, saving many jobs in the hospitality and … Continued

Safe harbour?

Six key welfare policy decisions to navigate this winter

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Despite the new Job Support Scheme, unemployment is set to rise substantially through the autumn and winter, as the Job Retention Scheme ends and the hospitality sector adjusts to new restrictions. This means many more individuals will soon be dependent on the social security system; and as the economy moves into the next phase of … Continued

The Winter (Economy Plan) is coming

Chancellor ramps economic support back up, but avoidable design flaws will limit its success in stemming the Autumn rise in unemployment

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Economic policy yesterday caught back up with the ramping back up of social distancing restrictions by the Prime Minister earlier in the week. The Chancellor rightly announced new measures rather than sticking to plans to phase out help for workers and firms.   His most significant policy was the Job Support Scheme (JSS), an extended, … Continued

Final furlough?

Six months on from the start of the Job Retention Scheme

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At its peak in early May the Coronavirus Job Retention Scheme (JRS) was supporting 8.9 million jobs. As the economy has opened up in recent months take-up of the scheme has been falling, to 4.8 million by 31 July. Of these, 3.5 million (over 10 per cent of private sector employees) were still furloughed in … Continued

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