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IEA - Furlough scheme changes reflect need to get “back to reality”

Professor Len Shackleton, IEA Editorial and Research Fellow, commented on changes to the furlough scheme effective tomorrow and calls to extend the scheme 

“The changes coming into force on Saturday are a reflection of the need to get much of the furloughed workforce out of this strange dreamlike existence and back to reality.

“Many businesses have already brought employees back from furlough – either flexibly or full-time – and we need to recognise that a proportion of those that remain subsidised by the taxpayer will not have jobs to return to. Although there may be a case for temporary financial support for those in this position, this should not be done through extending the Coronavirus Job Retention Scheme as many continue to argue.

“It is unfair and irresponsible that the burden of paying wages should fall indefinitely on taxpayers when they themselves may see static pay, price rises, and possibly even tax rises to pay for all this.

“This week the cost of the furlough scheme passed £30billion. This will only continue to balloon between now and the end of October. Businesses need to adapt their models to meet the needs of future consumers, not remain stuck in the aspic of February 2020.

“Meanwhile those who do have continuing jobs and can return to their normal place of work should be encouraged to do so as soon as possible, to enable businesses serving office populations to begin recovering, save more furloughed jobs, and lessen the burden on the taxpayer.”

Notes to editors

For media enquiries, please contact Emma Revell, Head of Communications, on 07931 698246.

Len Shackleton is available for interview and further comment.

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.

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