Connect with us

Hi, what are you looking for?

Investing

Sunak warned to extend furlough or risk mass unemployment

Rishi Sunak

Rishi Sunak has been warned by the leaders of Britain’s most influential business groups and the trade union movement that he risks plunging Britain into a period of mass unemployment unless he extends the furlough scheme.

Before the budget on 3 March, both sides of industry told the chancellor that the economy was too fragile to end the wage subsidy scheme at the end of April and that he risked undoing the efforts to protect jobs over the past year if he did so.

Frances O’Grady, the TUC general secretary, said Sunak should not wait until the budget but should announce immediately that furlough – which has cost the Treasury almost £50bn so far – would remain in place until the end of the year. The government, she said, had a moral obligation to prevent a return to 1980s levels of unemployment.

“It would be a dereliction of duty of any government [not to extend furlough]. Nobody should think it is responsible or acceptable for any government to consign people to the dole queues,” O’Grady said. “The government must understand we need to work our way back to growth, and for that we need people in jobs. Otherwise we are going to end up with real, deep economic and social problems.”

Adam Marshall, the director general of the British Chambers of Commerce, called for a furlough extension from April to July and said the chancellor should not be fooled into thinking that the planned phased relaxation of lockdown restrictions meant the problems of business were at an end.

“What one can’t do is say that once the vaccine rollout has happened, everything will be OK. That is not the case. You’ve got businesses in deep trouble, and still the possibility of flare ups in the virus. It’s not a case of just vaccinate and forget about it.”

Sounding the alarm as the government plots a road map for relaxing Covid restrictions this spring, the TUC and the BCC told the Guardian that a long-term plan was needed to repair the damage to the economy of a triple lockdown and the biggest annual contraction in the economy for 300 years.

Extending furlough is also a central pre-budget demand of the CBI. The lobby group’s chief economist, Rain Newton-Smith, said an announcement was needed “sooner rather than later”.

“If the government brought it to a sudden stop, that would almost certainly impact job decisions, just as we see hope on the horizon,” she said.

Representing millions of workers and thousands of businesses between them, the development comes as Boris Johnson’s government draws up plans for relaxing Covid restrictions this spring. Sunak has remained open to the possibility of fresh support measures to reflect lengthier restrictions than first envisaged, but O’Grady warned that an ideological tussle appeared to be gripping the cabinet over how to support Britain’s economic recovery from the crisis.

“To cut back now would be a complete waste of all that effort, and it would be just obscene to confine a whole generation – particularly young people – to unemployment,” she said.

As the government’s flagship job support scheme, furlough has topped up the wages of almost 10 million jobs since its launch in March last year and is due to close at the end of April after several extensions. However, the Treasury’s own independent economics forecaster, the Office for Budget Responsibility, has said unemployment could spiral upwards once it expires to hit 2.7 million by the summer – more than double pre-pandemic levels.

The government’s concern about the possibility of a spring surge in job losses was underlined by an announcement from the Department for Work and Pensions of a fresh financial support scheme to help 160,000 unemployed people find work.

Announcing the measures on Wednesday, Therese Coffey, the employment secretary, said the plan to launch “digital job surgeries” would help jobseekers to improve their interview skills and offer advice to help people back into work quickly.

“Our plan for jobs is helping us build back better and fairer, getting job support to people who need it right across Britain and levelling-up opportunity,” she said.

The prime minister has said rapid deployment of the Covid vaccine will stand as the government’s most powerful economic recovery tool by enabling lockdown controls to be relaxed. Sunak batted away demands for further economic support last month by saying the Treasury had spent more than £280bn so far, while suggesting that the British economy had underlying strengths that could be unleashed as the vaccine is deployed and restrictions eased.

While the Treasury plans to refresh its Covid response in the budget, the chancellor has also suggested that many households saving money during the pandemic could help to kickstart the economy as the shackles on business and social life are removed.

Marshall said businesses needed continued help from furlough to avoid lasting scarring from the crisis, as well as longer extensions to grant schemes, VAT cuts, business rates relief and funding for training staff.

“Think of how much has been spent already. Stopping now would be akin to letting a marathon runner fall over within sight of the finish line, then not helping them over the line and giving them the support they need to recover,” he said.

Read more:
Sunak warned to extend furlough or risk mass unemployment

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

WASHINGTON D.C. — The United States is seeking to form a coalition of countries to drive negotiations on a global plastic pollution treaty, weeks...

Economy

By Diego Gabriel C. Robles  THE WORLD BANK (WB) upgraded its growth forecast for the Philippines for this year and 2023, citing an “accommodative”...

Economy

THE PHILIPPINE auto industry’s sales recovery will likely be derailed if a measure reimposing excise taxes on pickup trucks is signed into law, according...

Economy

THE BANGKO SENTRAL ng Pilipinas (BSP) may deliver a second off-cycle rate hike in early November when the US Federal Reserve is expected to...

Economy

THE ASIAN Development Bank (ADB) is planning to allocate at least $14 billion for a program aimed at easing a food crisis in the...

Investing

With the reversal of the 1.25% rise in National Insurance Contributions happening on the 6th of November, employers across the nation have an opportunity...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Investing

The minute that any question pops into your head, you can simply ask Google. No longer do we have to pour over books and...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.