This report outlines a fresh approach to national unemployment insurance, in which people can insure themselves against loss of income due to unemployment. It builds on the conceptual framework set out in the Social Market Foundation’s earlier report Anglo-Flexicurity: A safety net for UK workers. Perceived job insecurity among middle-income groups was high even before the current recession, having risen over recent decades. Steadily expanding financial commitments, such as consumer credit and mortgage debt, and declining relative generosity of state unemployment benefits have raised the consequences for those in higher income brackets who lose their jobs.
The current economic crisis and rising unemployment are turning this sense of vulnerability into a very real problem for millions of people who now find their livelihoods in jeopardy. This makes it likely that we will see increasing disaffection with current forms of unemployment benefits over the coming years and a growing desire for change.
For many reasons, the role of protecting middle and higher-income earners against unemployment should not fall directly to the state. Anglo-Fflexicurity II: Insuring against unemployment in the UK makes the case for limited state involvement to unblock market failures to facilitate a market-based solution to the middle class ‘protection gap’. This research provides the stepping stones by which Anglo-Flexicurity might be developed from a set of ideas into a concrete policy to tackle a 21st century problem.