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MORE radical economic policies need to be taken by the government in response to coronavirus amid “huge uncertainty” over how long the crisis will last, a think tank has advised.
The Resolution Foundation said ministers should add to job and finance schemes which have already been announced by preparing new policies.
A six or 12-month lockdown could lead to an economic recovery period of between two and five years and permanently hit economic output by up to 7 per cent, it warned.
And the group warned that a six-month lockdown could result in unemployment averaging five million in 2021 as the job retention scheme is phased out.
The foundation warned that lifting the lockdown too early could lead to a flare-up of new cases and reimposition of restrictions, prolonging the economic and fiscal damage.
Richard Hughes, research associate at the Resolution Foundation, said: “The government must prepare for a scenario in which the numbers of people out of work could far exceed the levels experienced during the ’80s and ’90s recessions.
“Ministers should remember that young people and low-paid workers have borne the brunt of the crisis, and will need to be at the heart of support to get the economy back on track.”