Skip to main content

Coronavirus and Jobs. Urgent Help Wanted.

By Dafydd Rees
16 September 2020

By Dafydd Rees, Leadership

Today is expected to be a difficult day for many furloughed workers.  

The deadline is looming for large employers to begin the consultation process for redundancies to coincide with the end of the Government job retention scheme set for October 31st

The media is full of advice for the Chancellor on what should happen next. 

For months, I’ve been concerned about the prospect of mass unemployment and the wider economic impact of the lockdown on communities and individuals across the UK.  

Growing up in Liverpool in the early eighties it was impossible to ignore the human cost of a life on the dole.    

It’s true that the combination of Universal Credit and the Government’s own furlough scheme have worked well so far. Unemployment in the US and in Europe has been a far bigger problem since the pandemic struck.   

But there’s no room for complacency. In my view, the Chancellor needs to prioritise help for both the young AND the old. 

Yesterday’s employment statistics from the ONS reveal the sharpest rise in UK redundancies since the aftermath of the financial crisis. 

The current UK jobless figure stands at 1.4 million. The Bank of England expects 2.5 million people to be out of work by Christmas. 

Almost 700,000 PAYE employees have lost their jobs since the lockdown started March, while the ONS believes the figure for those who are self-employed is well over quarter of a million. 

In the sectors that have been hardest hit, the statistics paint a grim picture. More than three quarters of the workforce in the hospitality sector, such as restaurants and hotels, are furloughed.

Job vacancies are 40% below their pre-pandemic levels. 

The current Chancellor, Rishi Sunak has promised MP’s that he will be creative in response to what a former Chancellor, Gordon Brown has predicted will prove to be a tsunami of mass unemployment. 

The Commons Treasury Select Committee wants to see an extension of the current furlough scheme.

The British Chambers of Commerce is urging the Treasury to make tax cuts worth more than £20 billion.  

The CBI is advocating a short- time working scheme which would allow flexible support for part-time workers with wages paid by the Government and the employer. To me it has many of the hallmarks of Germany’s long established Kurzarbeit system which allows hours to be furloughed rather than facing the choice of losing the job altogether.    

Until now, the Chancellor has signalled that an extension of the current furlough scheme would be unaffordable and provide support for “Zombie jobs” with no long-term economic future. 

Back in July, the think tank the NIESR estimated that extending the current scheme until the middle of next year would save more than 1m jobs and cost £10bn. 

My advice to the Chancellor is two-fold. 

Focus on supporting the services sector, which has been such a source of strength for the UK economy over the past decade and help those starting out as well those closer to the end of their employment careers retrain. 

But we also need a step change in attitudes towards vocational training and support for workers to retrain which is locally or regionally focused.  

The young are currently bearing the brunt of the cost of this Coronavirus induced recession. 1 in 8 of young people are out of work. 

The Government’s Kickstart scheme has proved its worth. It provides financial incentives for 16-24 year olds to cover the costs of 25 hours a week paid at the rate of the minimum wage. So far, it has cost the Exchequer £2 billion. 

In my opinion, more also needs to be done to extend subsidised work placements and apprenticeships and increase the amount of money available to support older age groups. 

The creativity the Chancellor has promised can’t come soon enough before the dire predictions about widespread job losses become painful reality.