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 leave scheme.
Before the March 3 budget, both sides of the industry told the chancellor that the economy was too fragile to end the wage subsidy scheme at the end of April and that it risked undoing efforts to protect jobs during the year. passed if it did.
Frances O’Grady, secretary general of the TUC, said Sunak should not wait until the budget, but should immediately announce that the license, which has cost the Treasury nearly £ 50 billion so far, will remain in effect until the end of the year. The government, he said, had a moral obligation to prevent a return to the unemployment levels of the 1980s.
“It would be a breach of the duty of any government [not to extend furlough]. No one should think that it is responsible or acceptable for a government to send people to subsidy queues, ”O’Grady said. “The government must understand that we have to work to get back to growth, and for that we need people in jobs. Otherwise, we will end up with real and deep economic and social problems ”.
Adam Marshall, director general of the British Chambers of Commerce, called for a license extension from April to July and said the chancellor should not be fooled into thinking that the planned gradual relaxation of closure restrictions meant that trade problems were over.
“What you can’t do is say that once the vaccine is released, everything will be fine. That is not the case. You have companies in serious trouble and there is still the possibility of the virus outbreak. It’s not just about vaccinating and forgetting it. “
Sounding the alarm as the government draws a roadmap to relax Covid restrictions this spring, the TUC and BCC told The Guardian that a long-term plan was needed to repair the damage to the economy from a triple lockdown. and the largest annual contraction in the economy for 300 years.
The extension of the license is also a central pre-budget demand of the IWC. The lobbyist’s chief economist, Rain Newton-Smith, said an announcement was needed “sooner rather than later.”
“If the government stopped him suddenly, that would almost certainly affect labor decisions, as we see hope on the horizon,” he said.
The warnings come as The Guardian releases a series of detailed articles looking at the impact of the pandemic on employment in Britain, with millions of workers on leave as coronavirus infections remain high and layoffs rise at the fastest pace on record. .
Representing millions of workers and thousands of businesses among them, the development comes as the Boris Johnson government drafts plans to relax Covid restrictions this spring. Sunak has remained open to the possibility of new support measures that reflect longer restrictions than initially envisioned, but O’Grady warned that an ideological struggle seemed to be gripping the cabinet over how to support Britain’s economic recovery from the crisis.
“Cutting down now would be a complete waste of all that effort, and it would be just obscene to confine an entire generation, particularly the young, to unemployment,” he said.
As the government’s flagship employment support scheme, the license has increased wages for nearly 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 economic forecaster, the Office of Budget Responsibility, has said unemployment could rise once it expires to 2.7 million by the summer, more than double pre-pandemic levels.
The government’s concern about the possibility of a sudden increase in job losses was underscored by an announcement by the Department of Work and Pensions of a new financial support scheme to help 160,000 unemployed people find work.
Announcing the measures Wednesday, Therese Coffey, the employment secretary, said the plan to launch “digital job surgeries” would help job seekers improve their interviewing skills and offer tips to help people return. to work quickly.
“Our employment plan is helping us rebuild better and fairer, providing job support to people in need across Britain and enhancing opportunities,” he said.
The prime minister has said that the rapid deployment of the Covid vaccine will become the government’s most powerful economic recovery tool by allowing lockdown controls to be relaxed. Sunak rejected demands for more financial support last month, 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 rolled out and ease restrictions.
While the Treasury plans to update its Covid response on the budget, the chancellor has also suggested that many households saving money during the pandemic could help jump-start the economy as the shackles in business and social life are removed.
Marshall said companies needed continued licensing help to avoid the lasting scars of the crisis, as well as longer extensions for subsidy schemes, VAT cuts, commercial fee relief and funding for staff training.
Think about how much has already been spent. Stopping now would be like letting a marathon runner fall within sight of the finish line, then not helping him cross the line and giving him the support he needs to recover, “he said.
George is Digismak’s reported cum editor with 13 years of experience in Journalism