The TUC has urged Rishi Sunak to urgently extend the furlough scheme amid rising unemployment as “millions of people’s jobs hang in the balance” in the deepening economic Covid crisis.
Responding to Office for National Statistics data published today, the trade union confederation has highlighted that the two biggest rises in unemployment in 2020 took place when government support was reduced or expected to end.
The figures released by the independent statistics watchdog showed that in the three months to November, when the job retention scheme was scheduled to end completely on October 31st, unemployment rose sharply to 5%.
General secretary Frances O’Grady said: “The more people we keep in work, the faster we can recover. But with the job retention scheme set to end in April, millions of people’s jobs hang in the balance.
“When the government planned to withdraw support last autumn, despite restrictions still being in place, unemployment surged. We can’t let that happen again.”
The TUC has also pointed out that in July last year, when the original job retention scheme ended and a modified programme reduced levels of support, unemployment increased by 17%.
Trade union leader O’Grady added: “It’s time to end the uncertainty and anxiety. The Chancellor must urgently extend furlough support to the end of the year to keep jobs safe.”
Labour has repeatedly stressed the impact of last-minute decisions on businesses and their employees, particularly when a late announcement in December meant redundancy deadlines were almost missed.
Companies with more than 100 staff must hold consultation processes on redundancies for at least 45 days, while small and medium-sized businesses have a 30-day statutory requirement for redundancies.
Anneliese Dodds also highlighted this issue when commenting on the “last-minute” U-turn decision from the government when the Chancellor extended furlough in November, to end in March 2021, just hours before it was set to end.
“How many jobs could have been saved if this government had recognised reality and let businesses plan for the future?” Dodds asked at the time. “Will the Chancellor apologise to those who have already been made redundant because of this last-minute approach?”
The Labour Party has not joined the TUC in its call for the coronavirus job retention scheme to be extended beyond the end of April this year. The opposition party has been contacted for comment.
Commenting on the ONS data released this morning, Shadow Work and Pensions Secretary Jonathan Reynolds argued: “Britain had the worst recession of any major economy because of this government’s incompetence and indecision.
“Redundancies have reached a record high while unemployment continues to rise, yet the government’s £2bn kickstart scheme has created just 2,000 jobs.”
The Office for Budget Responsibility has estimated that unemployment will peak in the second quarter of 2021 at 7.5%, with 2.6 million people out of work. This analysis was done before the latest national lockdown for England was announced.
Reynolds added: “The government must act urgently to secure our economy, protect jobs and get Britain back on the path to recovery, including cancelling their disastrous cut to Universal Credit and council tax hike.”
Labour has used recent opposition days in parliament to pass motions calling on ministers to abandon plans for a £93 increase to the average council tax bill, and on protecting the standard rate of Universal Credit and Working Tax Credits.
The government is pressing ahead with a planned cut for claimants, which will take place in April and reduce annual incomes by over £1,000 for 16 million households just as the furlough scheme ends and unemployment is forecast to be highest.