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This week's opinion: 4 June 2020

02 June 2020 / Andrew Hubbard
Issue: 4746 / Categories: Comment & Analysis
Did the support schemes strike the right balance?

It was inevitable that the chancellor would have to bring the two main coronavirus schemes to an end: it is unsustainable for a government to continue to support 8.4 million employees and 2.3 million self-employed people indefinitely. It is right that relief is being tapered away – to have withdrawn it all at once would have created a dangerous cliff edge effect. The hope is that the gradual recovery of the economy will compensate for the reduction in relief and that many jobs and livelihoods will have been saved, although the chancellor has accepted that this will not be the case for everybody. 

This level of government support is unprecedented and I have no doubt that, after life resumes some kind of normality, we will want to see the lessons that have been learned. I am particularly interested in the balance between pragmatism and fairness – some people have fallen through the gaps, such as employees who have changed jobs. We can have sympathy for those who have seen their income disappear with little support from the state, but a system that tried to accommodate every case would have been too complicated and never have got off the ground. Whether the balance was struck at the right point is open to debate. 

We know that the chancellor is looking at ways of aligning the tax position of employees and the self-employed. How he handles this balance in those reforms will be a key factor in whether any changes are accepted by those most affected.
Issue: 4746 / Categories: Comment & Analysis
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