Labour calls for “back to work Budget” and warns of “mass unemployment”

Labour has called for the government to bring forward measures to protect jobs in a “back to work Budget”, and warned that the UK could see “mass unemployment on a scale not seen for decades” when the furlough scheme is withdrawn.

The call for a focus on “jobs, jobs, jobs” from the party comes as the Office for National Statistics has revealed that the number of people on company payrolls fell by 612,000 between March and May 2020.

Labour’s Anneliese Dodds expressed concern that “the slow and confused health response is now being followed by a slow and confused response to saving jobs”, and has urged the government to take swift action.

Setting out the demands, the Shadow Chancellor said: “The government was too slow to recognise the scale of the health crisis from coronavirus and we are already paying the economic price.

“We are increasingly worried that the slow and confused health response is now being followed by a slow and confused response to saving jobs. The window is closing to protect existing jobs and encourage firms to invest in creating new ones.

“That’s why we need a back to work Budget that has one focus – jobs, jobs, jobs. As a constructive opposition, we want to work with government to get the right solutions to the problems the country faces.”

Data released by the ONS this morning showed that while the level of unemployment has remained unchanged at 3.9% over the three months to April, there has been a sharp increase in the benefit claimant rate.

The figures reveal that since the start of lockdown in March this year, the jobless claimant count in the UK increased by 125.9% or 1.6 million to a total of 2.8 million by the end of May.

Responding to the data, Shadow Work and Pensions Secretary Jonathan Reynolds said: “These numbers show that unless the government acts, the UK is likely to face mass unemployment on a scale not seen for decades once the furlough scheme is withdrawn.

“The government has been slow at every stage of this crisis – they cannot afford to be slow again in responding to this threat. There must be urgent action from the government to assist the hardest hit regions and specific support for sectors particularly exposed to the nature of the Covid crisis.

“It must prevent additional unemployment, support those who become unemployed and enable the creation of new jobs. This is why Labour is calling for a back to work Budget that has one focus – jobs, jobs, jobs.”

The figures produced by the ONS today also show that job vacancies fell to their lowest level on record and inflation-adjusted pay fell in real terms in April for the first time in over two years.

The unchanged unemployment rate is thought to be a result of the furlough scheme, which has protected more than eight million jobs across the country throughout the health crisis.

Economists have warned that the level of unemployment will rise as the government scheme is withdrawn. Chancellor Rishi Sunak announced last month that the support programme will come to an end in October this year.