A version of this article was first published by the Financial Times.

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The significance of choices made in the midst of a crisis often get overlooked. During the first lockdown the UK government scrambled to invent a generous system of wage insurance for employees and income-protection for the self-employed. It could have sent all households an emergency flat rate benefit payment or targeted those in most need. Instead, the bulk of the new support offered was linked to past earnings. During this century’s darkest hour Britain turned to Bismarck, not Beveridge, for inspiration.

This represents a major rupture with the UK’s post-war policy settlement. Protecting existing jobs and wages — and the economic continuity and social cohesion this secured — trumped all other considerations like cost and selectivity that, in less extreme circumstances, would have prevailed. …


Gavin Kelly

Gavin is chair of the Resolution Foundation and chair of the Living Wage Commission. He writes here in a personal capacity.

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