A THINK tank has proposed a “broad and radical” approach to deal with the effects of the coronavirus pandemic, which it said has now become a full-blown economic crisis that could last for much longer than a few months.

The Resolution Foundation warned that firms will go bust and unemployment will rise, with most of the economic damage driven by measures, such as social distancing, which have been put in place to respond to the pandemic.

Lower earners are most likely to be hit most swiftly, in stark contrast to the 2008 financial crash, it said, pointing out that sectors already heavily affected have a typical weekly pay of £320, compared to the £455 average over the whole economy.

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It added that there was an urgent need for the Government to step up its economic response.

“We propose a broad and radical approach in three areas: relatively simple extensions of sick pay itself, much bolder moves to aid the retention of workers by struggling firms, and a stronger social security safety net,” said the think tank.

The National: Boris Johnson has been urged to do more for the lower paid British peopleBoris Johnson has been urged to do more for the lower paid British people

“This three-part package would amount to a bold response to a very serious economic crisis.”

It said the Government should extend Statutory Sick Pay (SSP) to the 2 million employees who earn less than £118 per week (£120 from April) and are ineligible, a move that would cost around £200 million.

“The Government could go further and make SSP more generous, but only if it met the costs of that increase, for small and medium-sized firms at least,” it said.

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“Increasing SSP from £95.85 to £160 per week would ensure it covered half the earnings of employees that rely on it, up from the current third, and cost a further £800m for small and medium-sized firms.”

It said the Government should introduce a new Statutory Retention Pay (SRP) scheme, where people who do not have work to do stay formally employed by their firm, but with a significant amount of their pay covered by the state.

The main adult rate of out-of-work Universal Credit (UC) should also be increased by one third, to £100 per week, and the Government should target a 10% uprating of other elements of the country’s means-tested benefits system.

The National:

SNP Westminster Leader Ian Blackford (above) has written to Boris Johnson calling for a cross-party meeting this week, and Neil Gray, the party’s shadow work and pensions secretary, said the foundation’s proposals should be taken seriously.

Gray said: “We must learn the lessons of the last financial crisis. Families have already been hit by a decade of austerity, with soaring rates of poverty and inequality – we cannot allow more people to be left struggling to get by as the coronavirus crisis hits our economy.

“The UK Government must do whatever it takes to put money in people’s pockets, protecting jobs and incomes, and ensuring that people aren’t left struggling to support their families, pay their bills and keep a roof over their heads.

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“The proposals by the Resolution Foundation must be taken seriously, as must cross-party calls to use the tax system to ensure everyone has access to an emergency Universal Basic Income, and SSP levels that at least meet the EU average and are extended to all workers, including self-employed and lower earners.

“I urge the UK Government to meet with opposition parties and urgently deliver this support as part of a wide-ranging multi-billion financial package to protect the incomes of all our people.”