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The government will close the licensing scheme this weekend, with layoffs increasing at the fastest pace on record and the second wave of Covid-19 pushing the British economy to the brink of a double recession, according to an analysis by The Guardian.
As Chancellor Rishi Sunak prepares to end the billion-pound coronavirus job retention scheme and launch a less generous replacement program, early warning indicators show business activity faltering as local closures go into effect. The number of people losing their jobs is increasing much faster than during the financial crisis of 2008, while the economic resilience of the end of March is gradually fading.
Faced with official forecasts suggesting unemployment could reach the highest levels since the 1980s around Christmas, Sunak was forced to come up with a last-minute package for businesses and workers amid anger over the lack of state support for as the number of new infections increased rapidly.
Writing in The Guardian, conservative peer David Young, who was employment secretary in Thatcher’s second government, said that people were losing their jobs “through no fault of their own and yet they have the skills and energy to flourish when conditions return to normal. ” He urged Sunak to develop new measures to stimulate job creation.
Lord Young said the current situation was different than in the 1980s, when he said old industries needed to change, but added that help was needed quickly. “The longer people are out of work, the harder it is to come back,” he said.
Since the start of the pandemic, The Guardian has chosen eight economic indicators, as well as the FTSE 100 level, to track the employment and growth impact of Covid-19 and the measures used to contain it. Facing the deepest global recession since the Great Depression, Covid’s crisis clock also tracks how the UK is doing compared to other countries.
In the last month, official figures show that UK economic growth slowed in August despite the government’s “Eat to Help” scheme providing a shot in the arm to struggling hotel companies. Since then, business activity has continued to slow in early fall as the number of Covid infections increases and local lockdowns are imposed.
In a bright spot for the economy on this month’s dashboard, retail sales have remained resilient as UK consumers who saved money while working from home earlier this year increase their spending on DIY products. and gardening. Home prices have also risen at the fastest pace in four years, as people who can afford to buy property reassess their living conditions after closing.
However, the latest dashboard shows that the problems for the economy are increasing as a difficult winter approaches. The latest figures from the Office for National Statistics show that the number of layoffs nearly doubled, to 227,000, in the three months to August, when the government began reducing the permitting scheme and the consequences of the pandemic forced companies to cut jobs.
The overall unemployment rate also rose the most in a decade to 4.5%, up from 4.1% in July. The Office of Budget Responsibility, the government’s economic forecaster, has warned that the unemployment rate could hit 12%, or about 4 million people, before the end of 2020.
As the leave scheme ends on Saturday, when it is replaced by the less generous employment support scheme (JSS), the ONS said that nearly one in 13 UK workers still received wage subsidies from the state – roughly 2 million of people.
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Against a backdrop of growing unemployment and tighter restrictions across much of the north of England, as well as Scotland, Northern Ireland and Wales, Sunak has come under increasing pressure to provide more emergency support. The JSS will offer workers two-thirds of their salaries instead of 80% under license, while there are also stricter eligibility criteria for companies. Local leaders and rebel Conservative MPs representing northern constituencies have called for more financial help to protect closed businesses in their areas.
In a message to the Chancellor, Young, who was an advisor to David Cameron, said the government urgently needs to use state-backed job creation schemes to boost job opportunities and help people start businesses.
“The government should now, as time is of the essence, recreate the programs that worked so well in the past, actively market them, and encourage the newly unemployed to get together alone or with friends or colleagues and start their own new business,” he said.
