The National:

"There is no country in Europe where so much support ... has been given to the population to get through this crisis" – Boris Johnson, PMQs October 21, 2020


Both furlough wage support and help for businesses is better in much of the rest of Europe than in the UK. In fact, this month Ireland increased benefits while the UK was cutting them. The countries with the best support during the pandemic are actually small ones like New Zealand.


At Prime Minister’s questions on 21 October, the Prime Minister (with his usual bluster) claimed “there is no country in Europe” which has provided more support to people and businesses to get through the Covid-19 pandemic and subsequent lockdowns. All the factual evidence suggests quite the opposite.

Start with support for the economy. In October 2020, the International Monetary Fund (IMF) published an updated report comparing the fiscal responses of governments in the major economies to the pandemic emergency. This calculated the additional financial measures introduced by each country to support businesses and furloughed workers.

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The first measure reported covers extra spending (including tax revenues forgone) as a percentage of GDP. By this benchmark, Britain fell behind Australia, Japan, Canada, New Zealand and the US, in new revenue support. In fact, the New Zealand fiscal injection was more than double the British, suggesting that country scale was not a barrier to business and employment support.

Overall, the British fiscal stimulus as a result of Covid-19 was roughly average for the industrial nations.

The IMF also separately measured the scale of emergency loans and guarantees made available to businesses as a result of lockdowns, again as a percentage of GDP. On this measure, the UK was significantly outpaced by Germany, Japan and even Italy.

Available German Covid loans and guarantees were roughly double those in Britain, at circa 30 per cent of GDP.

Note: loans are not necessarily taken up but show government willingness to provide business with credit to keep it going.


When dealing with help for individuals, the UK began the crisis with around 10 per cent of the population living below the internationally agreed poverty line – which means Britain actually has worse incidence of poverty than most of Europe.

We should also note that normal (pre-pandemic) unemployment benefits in much of the EU are far superior to those in the UK. By comparison, Germany’s unemployment benefit pays 60 per cent of previous salary for a year. France provides up to 75 per cent of the previous average daily wage for up to two years. So, the pandemic hit a country already worse prepared than the rest of Europe.

With most countries imposing a lockdown, governments were forced to replace lost wages. How does the UK compare?

In fact, Covid-19 wage subsidies in a number of European countries are superior to the furlough scheme in the UK, some substantially so. For instance, the first version of the Chancellor’s furlough subsidy paid 80 per cent of wages, which seems generous. However, the total received was capped at £2500 per month.

The German equivalent paid up to 67 per cent of wages lost, but with a cap more than twice the UK figure. And unlike the British scheme, German firms could still allow staff to work part-time. The initial French system paid furloughed workers up to 70 per cent but again with a higher cap. Also, the French paid employees on minimum wage 100 per cent compensation.

The latest, revised UK wage support scheme pays eligible businesses two-thirds of each employee’s salary up to a maximum of £2100 a month. Firms need to pay national insurance and pension contributions as well their share of wages. The scheme will begin on November 1 and will be available for six months only. This is similar to the German system, but the UK cap is a miserly third of that set in Germany.

The German version also raises the eligible share of the wage paid by the state, if the working time of an employee is sharply reduced, rising to 80-87 per cent. Also, the German wage scheme – one agreed at a firm level – can last up to two years.

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Other European countries continue to pay wage subsidies substantially in excess of the revised UK offer. In Netherlands, for instance, the state will still pay 80 per cent of lost wages, till the end of 2020. Unlike the UK, some EU states have even started to expand wage support in the light of the second Covid-19 upsurge, rather than taper it.

This month, Ireland actually raised payment rates for two of its flagship support schemes – the employment wage subsidy scheme and the pandemic unemployment payment. The former scheme (for furloughed workers) has been expanded to include new, higher payments up to €350 (£316), while the latter’s top rate of €350 has been reinstated.


We can measure the overall negative impact of the less generous UK pandemic support packages by looking at economic growth. UK economic output shrank by 20.4 per cent the second quarter of 2020, the worst quarterly slump on record, pushing the country into the deepest recession of any major industrial economy.

The German economy, by comparison, fell be only 11.9 per cent. The reason: because the more generous and flexible German support schemes kept more business functioning and more people in work.


Another zero for Boris.