As the job retention scheme winds down, new measures to support vulnerable workers are essentialby Tony Wilson / June 1, 2020 / Leave a comment
Ending the Job Retention Scheme was always going to be harder than setting it up. The chancellor won universal praise back in March for throwing a life raft to more than eight million workers so that they could ride out the lockdown. But as I’ve written before with Jonathan Portes, winding down the scheme is fraught with challenges, and will need to happen alongside a ramping up of employment and skills support for the unemployed.
It’s clear from the weekend press that government ministers understand this too, briefing that work is underway on a stimulus package for infrastructure investment and job creation. But while this is welcome, it’s just one piece of what needs to be a three-part plan to respond to what is likely to be the highest unemployment that we will have ever faced. So alongside fiscal stimulus to support a return to growth, we need investment now in measures to help those out of work and at risk of redundancy to prepare for and find new jobs; and to start putting in place the services that we will need come the end of the year, when long-term unemployment will be taking off.
Right now, though, we need to deal with an immediate unemployment crisis. This month’s “claimant count” data told us what we already knew: that unemployment has already risen faster than at any point since the winter of 1947, when Britain froze and the country ground to a halt. This time however, the snows won’t melt next month. With two million claimants unemployed in April, a million more claims to Universal Credit in the last month and at least half a million people unemployed but not claiming benefits (mostly younger people), unemployment is already above three million. This is the highest since the 1990s, and in the next few months it will reach the highest that it has ever been—higher even than during the Great Depression.
Way back in March, the hope was that unemployment would fall as fast as it rose, as we exited the crisis and things returned to normal. But if this crisis didn’t start like any other recession, it is fast turning into one—with lasting impacts in the real economy (in particular through our reduced ability to move labour and products between places), loss…