Business needs to be empowered to help avert looming unemployment crisis

Author
Ian Mean
Director of Business West Gloucestershire | Business West
19th May 2020

The devastating impact of coronavirus was painted in depressing human detail today.

The unemployment rate has never been higher since records began 50 years ago and is a reminder of the dark days of the jobs crisis during the John Major government back in 1996.

According to the Office for National Statistics today claims for unemployment benefit in the form of Jobseekers Allowance and Universal Credit jumped by 856,000 in April.

This takes the so-called claimant count to 2.1million people - the biggest jump since records began in 1971.

And unemployment in the three months to March increased by 50,000 to 1.35 million.

Following the lockdown in March, there was also a big fall in hours worked-from 33 hours a week in the previous year to 24 hours a week.

This shows the sharpest fall in ten years.

Unemployment in the three months to March increased by 50,000 to 1.35 million.

And it was announced today that over 8 million people were on the furlough scheme with wages paid by government.

The worrying factor now is that how many companies which have furloughed employees will be able to afford the contributions which government are going to seek from August.

It is a depressing prospect that many of these firms may have to decide to start making employees redundant if they find they just cannot afford these new contributions.

The Chancellor has promised details of how much companies will need to pay by the end of this month.

The speed of the economy recovery depends on how many of the employees will be able to get back to work with safety paramount in that return.

While it is vital we re-open our economy in safety, vacancy rates are very low generally with the exception of the IT, health and logistics sectors.

The low vacancy rates in most employment sectors are unfortunately a harbinger of worse to come with a big influx of young people from colleges and universities now coming onto the jobs market.

While the government is recognised to have been innovative in its cash help for businesses to survive coronavirus, the spectre of such high, demoralising unemployment is a challenge that must be gripped quickly.

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