Government is still undecided on whether to introduce unemployment insurance – as the recession begins to bite.

The idea was first put on the table in 2002 by then Finance Minister Eugene Cox, and two years later $1 million seed money was set aside for the scheme.

However the plan then appeared to fall off the radar screen until current Finance Minister Paula Cox said legislation would be tabled in the House of Assembly by the end of 2006.

And she said last year that a small technical team of officials from the Ministry of Finance and the Ministry of Social Rehabilitation was working on a scheme to suit Bermuda's unique economic circumstances.

Asked whether the scheme was still in the works Ms Cox urged The Royal Gazette to contact Social Rehabilitation Minister Dale Butler. He said: "We did a lot of work on it when the economy was booming and discussed whether or not it was important.

"At that point in time it didn't make sense to implement it. But at the moment we could potentially implement it in short order. We do have financial assistance and we are monitoring whether or not we are going to have some type of unemployment insurance."

He said the review was ongoing but he said the final decision rests with Finance Minister Paula Cox's Budget next month.

"We wait to see what will happen. We are still in the discussion stages."

Government already offers financial assistance to poverty-stricken families. Mr. Butler said his staff were not reporting a massive increase in applicants.

And he indicated that if unemployment insurance was introduced, the burden would not fall on companies to fund the scheme. He said: "With hindsight now, we probably should have had such a scheme, with so much money deliberately taken out of your account should you become redundant or unemployed that you would be able to benefit from that.

"But at the moment I don't see how, based on the feedback from employers, that they would be able to contribute. They are laying people off. So it would be left to the taxpayers ultimately to get the burden.

"We were looking at that but we will have to wait and see. We don't want people going without food and basic necessities."

He said some Bermudians were being proactive by taking jobs in other fields when they were laid off and he urged people to take advantage of night classes to acquire new skills.

Mr. Butler said he hoped Bermudians didn't become aggressive to foreign workers but made sure they were able to replace them, if need be, when work permit renewals came up.

"They need to be ready with resumes to apply. I am hoping we won't see any attacks verbally or physically on people who are legitimately here on contracts."

He urged organisations such as churches and workmen's clubs to make scholarships available for people who needed to retrain.

The idea received mixed reviews from stakeholders.

Bermuda Employers' Council executive director Martin Law said unemployment insurance wasn't something Bermuda needed. He said: "It's too expensive. Even if Government funds it – where does Government get its money from? From the rest of us."

Bermuda Industrial Union President Chris Furbert said he hoped unemployment insurance would be introduced in the Budget and he said calls were starting to come in about job losses.

Mr. Furbert said if unemployment got really bad, then a stimulus package similar to that seen in other jurisdictions would be needed.

Free market economist Robert Stewart said Government should not look to increase hand-outs. He said: "If people haven't got enough money because there's a recession, then how can they pay for other people to live?"

And Bermuda Public Services Union president Armell Thomas said he would like to see the details although he wasn't against it in principle. "Everyone needs insurance because of the uncertainty. But it's the little parts — who is going to pay the premium, how does one qualify."