Labour Market

IEA responds to The Guardian regarding the Coronavirus Job Retention Scheme

The Institute of Economic Affairs has been approached by a journalist from The Guardian newspaper regarding its use of the Coronavirus Job Retention Scheme (CJRS).

The Guardian asked whether the IEA should pay back the state support it has received. It questioned whether putting staff on furlough, while some spokespeople were critical of the scheme, amounted to hypocrisy.

Here is our response:

The Institute of Economic Affairs (IEA) is an educational charity whose authors speak for themselves. Their views do not represent corporate positions and they often disagree: our Economics Fellow Julian Jessop told The Telegraph in February 2021 that there might be a case for extending the furlough scheme beyond April. 

That our Editorial and Research Fellow Professor Len Shackleton has written critically about the Coronavirus Job Retention Scheme does not prevent the IEA from using it as intended any more than articles in The Guardian criticising tax planning prevent your parent company the Scott Trust from investing in tax havens. 

This point is important: we must operate in the world as we find it, not as we would like it to be. A number of IEA spokespeople have made the case for NHS reform to improve efficiency, quality and outcomes – but we doubt the Institute would be accused of hypocrisy were it to call an ambulance if a staff member had a serious injury. A number of staff watch BBC or live programming and pay the BBC Licence Fee, yet the Institute has published reports from authors calling for the levy’s abolition. Some spokespeople use subsidised public transport, or purchase items at duty free. This is no more hypocritical than a Guardian columnist advocating for a higher tax rate but not paying it voluntarily in the meantime.  

The IEA has made use of the furlough scheme to manage staff costs at a difficult and extraordinary time for all charities and businesses. These difficulties have been caused by state action – and the CJRS was designed to mitigate the damage of lockdown and the impact of social distancing rules on the economy. The IEA trustees therefore decided that using the scheme was the best course of action for us. We have treated this scheme no differently to other statutory schemes designed to manage staff costs for social ends, such as maternity pay or allowances and discounts on rates.

We are more than happy to confirm that the furlough numbers in the public domain are correct, and that at the height of the pandemic all senior staff volunteered to surrender between 20-50 per cent of their pay in order to protect the income and positions of the most junior staff, even when furloughed. To be liberal or libertarian in a free society is to have the freedom to choose to take collective action to help the most at risk, rather than have that choice imposed on you by the state.

Thanks to such acts and the extraordinary generosity of our donors, we remain in a position to give young people life chances and advance education. The IEA has continued to educate the public on the role of the state in society, and this remains a central theme in our series of ‘Covid-19 briefings’, which examine the immediate and long-term impacts of the UK’s response to the pandemic.  

We look forward to the end of the pandemic and the return of the free society as the motor of prosperity and jobs, as we hope does The Guardian and your readers.

For further enquiries, please contact Annabel Denham, Director of Communications, [email protected].