Beyond COvid: The Digest

Furlough or a four-day week?

August 3, 2020
  • Concerns over rising unemployment increase amid the Government's tapering of the furlough scheme, regional lockdowns, and news of job cuts and continued corporate financial distress.
  • Proposals for tackling the issue include replacing the furlough scheme with a "Shorter Working Time Subsidy Scheme" as part of a longer-term move to a four-day week.

  • Highlights from our In Brief and Reflections sections this week include further reading on working time and "time use policy", an article on implementing a "citizen-led prosperity index" to measure policy success, and a discussion of how we might rebuild international cooperation Beyond Covid.

Furlough or a four day week?

  • The Coronavirus Job Retention Scheme (CJRS) begins to taper this month, affecting 9.5m employees and 1.2m firms.
  • ~~Amid rising Covid-19 infection rates - leading to tighter lockdown measures in many parts of the country - and news of job cuts and increasing financial distress amongst SMEs, many are concerned that this taper is "premature" and could "fuel unemployment".
  • The National Institute for Economic and Social Research (Niesr) has argued that current plans to wind down the furlough scheme are a "mistake" and that they will push unemployment to 10% by the end of 2020.
  • ~~Niesr Deputy Director Garry Young argued that extending the furlough scheme "would have come close to paying for itself" by avoiding "scarring" - the drop in productivity caused by long-term unemployment.
  • ~~Niesr estimate that the short-term cost of extending furlough for 8 months would be roughly the same as the Chancellor's planned Job Retention Bonus (JRB).
  • ~~Earlier this month, the top HMRC civil servant did not approve the JRB because of uncertainty over its "value for money".
  • The Labour Party and the Resolution Foundation have argued against a 'one-size-fits-all' approach to furlough and are pushing for the extension of furlough in the hardest-hit sectors.
  • ~~Darren Jones MP, Chair of the Business, Energy and Industrial Strategy Committee, has written to the Government over concerns for the retail, creative, manufacturing and aviation industries.
  • Think tank Autonomy has proposed that furlough be replaced with a "Shorter Working Time Subsidy Scheme" to avoid mass layoffs in vulnerable industries in the short-term, and to transition to a four-day week in the long-term. (Times coverage)
  • A poll of 2000 people found that nearly two-thirds of the public and more than half of Conservative voters support the introduction of a four-day week as the economy emerges from lockdown.
  • ~~ICYMI, last month Joe Ryle wrote for the Spectator on the Conservative case for a four-day week.
  • ~~Over the longer-term, it has been argued that a four-day week would improve employees' health and help reduce carbon emissions (New Scientist).

In brief

  • The Financial Times reports that Dominic Cummings is leading a push for a 'light touch' state aid regime post-Brexit, which would be "opposed strongly" by Brussels in the ongoing Brexit negotiations.
  • A new Resolution Foundation report "The time of your life" finds that most people now enjoy less leisure time per day than they did four decades ago. The report outlines principles for future "time use policy" and makes the case for a "Time Use Commission".
  • Common Wealth interviewed competition law expert Michelle Meagher on how our current approach to market regulation undermines attempts to tackle inequality.
  • A new IPPR report analyses the effects of Covid-19 on work in heavy industry, and examines the risks and opportunities posed by the pandemic for reform of working time and practices in these sectors.
  • Democrats in control of California's state legislature have proposed a stimulus plan based on "future tax vouchers".
  • A study of Blackburn with Darwen, one of a number of UK boroughs under stricter regional lockdown measures, found that 80% of the borough's recent positive cases were in the poorest 30% of households, while none were in the richest 10%.


  • Oxford University's Institute for New Economic Thinking (INET) hosted a discussion (video) to examine how we might rebuild international economic cooperation post Covid-19.
  • The Deputy Director of UCL's Institute for Global Prosperity argues that "we urgently need new tools to measure economic recovery after coronavirus", suggesting the development of a "citizen-led prosperity index".
  • Analysis from Sussex University's Trade Policy Observatory finds that the purported advantages of freeports to businesses are "almost non-existent".
  • The National Grid has laid out its most recent "future energy scenarios", and finds that hydrogen - alongside a "massive rise in wind and solar power" - is necessary for meeting the UK's net zero target.
  • ~~They argue that "immediate action across all key technologies and policy areas, and full engagement across society and end consumers" is required to meet the UK's legally binding climate commitments.

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