Prime Minister Boris Johnson has told the Commons that the UK’s furlough scheme is “far more generous… than anything provided in France, Germany or Ireland”.
All four countries have different systems for subsiding people who can’t work during the coronavirus epidemic. And all the schemes have changed over time.
As of this week, the UK government is paying 70 per cent of the gross salaries of furloughed workers, up to £2,187.50 a month.
Employers then top up wages to get to 80 per cent (up to £2,500 a month) and pay tax and National Insurance contributions.
Germany, through its longstanding “Kurzarbeit” system, pays 60 per cent of the net salary of a new claimant. That’s less than in Britain.
But the German wage subsidy rises to up to 80 per cent of net salary, or 87 per cent for people with children, depending on how long you have been furloughed. The subsidy rates apply to salaries as high as 6,900 euros or just over £6,000 a month.
So it’s hard to say whether an “average” worker would be better off in Germany or Britain: it depends on your family circumstances, how much tax you pay, how much you earn and how long you have been furloughed.
Until last month, the French government was paying furloughed workers 70 per cent of gross salary. As in Germany, this applied to salaries of just over £6,000 per month.
So high earners may well feel that aspects of the French and German systems were more generous than the British one, which caps total earnings at £2,500 a month.
Changes to the French system were brought in last month, making it even harder to compare to the British one. Companies are now expected to reduce their employees’ working hours rather than keep them off work altogether. The level of state subsidy has been cut, but the scheme will cover some workers for up to two years.
Ireland has also brought in big changes. Until this week, the percentage of salary paid and the maximum amount depended on how much you were earning before you were furloughed. Again, this makes it hard to do a straightforward like-for-like comparison with the UK.
Ireland’s furlough scheme changed this week, with the government cutting the level of subsidies and tightening eligibility rules but promising to continue topping up wages for some workers until 2021.
This brings us to an all-important question: how long will each country carry on with its furlough scheme?
The British government has said its Coronavirus Job Retention Scheme will run until the end of October this year, although it is likely to come under increasing pressure to extend it.
France, Germany, Ireland and other countries have pledged to extend state subsidy for considerably longer, although the amount of government support may fall over time.
That makes it virtually impossible to compare the “generosity” of different systems over time. How generous for whom, and for how long?
If the UK pays furloughed workers more per month for a while, but ends its scheme months or years before other countries, the total each person receives from the state over a period of time could end up being less.
It’s factors like this that explain why FactCheck has struggled to find a reputable economist prepared to rank countries in order of “generosity”.
It’s not clear what evidence Boris Johnson is relying on to back up his claim that Britain’s system is more generous, and we have asked Downing Street for clarification.