By Alan Lockey

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Viewed from almost any angle, the UK government’s Coronavirus Job Retention Scheme — to give the furlough policy its official title — is a staggering departure in the state’s relationship with the economy. Not since the foundation of the welfare state in 1948 has a British government intervened so emphatically to ameliorate labour market outcomes. And even then not to subsidise employees’ wages directly, as now.

The policy’s vast scale is a story best told in numbers. According to HMRC data, at least 9.4 million workers have been furloughed; more than a quarter of the UK’s entire labour market. The cost to the exchequer stands at an estimated £14bn a month and, by the time the policy is wound down, this could even top £100bn. With the economy in freefall, there is only one way the government can fund this: borrowing. As such, the UK’s public deficit is expected to exceed 15 percent of GDP, a level not seen before in peacetime. …



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