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IEA economist comments on ending of furlough scheme

Professor Len Shackleton, Editorial and Research Fellow at free market think tank the Institute of Economic Affairs, commented on the ending of furlough scheme

“While the end of government support will almost certainly lead to some increase in unemployment, there are realistic hopes that this will be less than once feared. 

“Job vacancies are at a record high. Even if those furloughed now lose their jobs, they should be able to obtain new ones fairly soon.  

“There are of course many furloughed workers in sectors such as travel and tourism where recovery has been much slower, and where new jobs will be hard to find. It is also likely that younger people will find it easier to adjust than older people. 

“Nevertheless, the UK has a relatively flexible labour market which should free up job opportunities quicker than in some European economies.

“While cautious optimism is reasonable, the government should be doing all it can to facilitate new jobs. At the moment this is not the case. National insurance increases, and the continuation of the failing apprentice levy, raise the costs of employing people directly.

“The policy of continually increasing minimum wages (and extending the National Living Wage to younger workers) has the same effect. The government is also toying with new ‘flexible working’ rights which will probably also increase employment costs.

“A mood of cautious optimism should be accompanied by cautious policy-making.”

Notes to editors

Contact: Emily Carver, Head of Media, 07715942731

IEA spokespeople are available for interview and further comment.

Original article link: https://iea.org.uk/media/iea-economist-comments-on-ending-of-furlough-scheme/

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