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Britain’s benefits system is preparing for up to four million unemployed in the coming months as the economic fallout from the COVID crisis accelerates.
Work and Pensions Secretary Therese Coffey told Sky News that her department was preparing to support that level of unemployed, but said she “really hopes” we don’t reach that number.
In a visit to promote the new £ 2 billion Kickstarter scheme for young benefit applicants to enter jobs, Ms Coffey said her department has taken the forecast from the Office of Budget Responsibility (OBR) and he was planning around that scenario.
“I think we are in a similar number in terms of being ready to help people and trying to get them back to work as quickly as possible,” Ms Coffey said.
Therese Coffey says her department is ready for an increase in applicants
“We are incorporating people into the organization and in a COVID-19 safe way to respond to the challenge.
“I really hope that we obviously don’t reach that number. But it’s important that we are ready to help people.”
The number of people with universal credit skyrocketed during the first wave of the pandemic with 2.7 million people claiming in August, an increase of 120.8% from March.
The OBR has predicted that unemployment could rise to 13.2%, equivalent to four million people, by next year.
Ms. Coffey said her department was ready for a surge in claimants and was “evolving our plans by recognizing how the economy works.”
The department will have hired 25,000 new employees in the year through March 2021, a third increase, as it prepares to tackle rising unemployment, while doubling the number of job coaches to help people retrain. and to find work in sectors not crushed by COVID. -19.
“I think it’s fair to say that doubling the work of coaches is a real investment to make sure we help people, many of whom will never have had benefits and may not have been unemployed or for a long time,” he added.
“That could put their chosen career on hold, just for a couple of years while their sector recovers, but helping them enter some of the growing sectors: construction, other infrastructure, health and social care.”
Ministers are bracing for a rise in unemployment as the chancellor ends the £ 39bn leave scheme and replaces it with a German-style wage subsidy scheme.
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Under the new Employment Support Program, the taxpayer will no longer pay part of the wages of approximately 3 million employees who were unable to work.
Instead, the Treasury will only subsidize people who work at least a third of their usual hours, giving employers just weeks to decide which jobs in their businesses are still viable, and employees who cannot work either of them. their normal hours are not eligible for government support.
The chancellor warned last week that Britain was facing a winter of mounting unemployment and said his new multibillion-dollar spending package, the Winter Economic Plan, would not be enough to prevent businesses from collapsing and job losses.
Ms. Coffey said, “We never promised that we could save every job or every company.
“We will do everything we can to try to help companies move forward. But we have reached a point where we absolutely recognize that we cannot pretend, we have never faked it, we can save all jobs.”
Young people are likely to be the hardest hit by threatened job losses in the hospitality and retail sectors, which is why the government has established the Kickstart scheme for 16-24 year olds.
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The scheme, inspired by a program that ran after the 2008 recession, is a big part of the government’s “Plan for Jobs” put in place in the summer.
Under the plan, the government pays the employers’ costs (national insurance, pension costs and salaries) in exchange for companies offering young people six months of internships.
