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Wed, 30 September 2020

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Rishi Sunak says government ‘can't protect every job’ as UK employment takes biggest hit since 2009

Rishi Sunak says government ‘can't protect every job’ as UK employment takes biggest hit since 2009

The Office for National Statistics said Britain had seen its ‘largest quarterly decrease since May to July 2009’.

4 min read

Chancellor Rishi Sunak has said the Government “can’t protect every job” but vowed to ensure nobody is “left without hope” as the UK suffered its biggest drop in employment since 2009.

The latest Office for National Statistics data, covering May to July this year, show the fall was mainly driven by a slump in self-employment, while young workers, those aged 65 and over and part-time staff have also been hard-hit.

The ONS said: “The decrease in employment on the quarter was the largest quarterly decrease since May to July 2009 with both men and women seeing decreases on the quarter.”

And deputy national statistician Jonathan Athow said: "The groups of people most affected are younger workers, 24 and under, or older workers and those in more routine or less skilled jobs.

"This is concerning, as it's harder for these groups to find a new job or get into a job as easily as other workers."

Mr Sunak, who has launched a wave of government schemes aimed at shoring up the British economy, said: "Today’s labour market stats make it clear that our unprecedented support measures, including the furlough and self-employed support schemes, are working to safeguard millions of jobs and livelihoods that could otherwise have been lost.

“I’ve always been clear that we can’t protect every job, but through our Plan for Jobs we have a clear plan to protect, support and create jobs to ensure that nobody is left without hope.”

The ONS data show that unemployment has not surged as much as expected as firms make use of the Government’s furlough scheme. 

The unemployment rate remains at 3.9%, largely unchanged on last year and the previous quarter.

But 730,000 fewer people were in paid employment in July than in March, when the UK’s coronavirus lockdown began.

Redundancies increased by 27,000 on the quarter, rising to 134,000, the highest level since February to April 2013 — although the ONS said this remained “well below that seen during the 2008 downturn”.

Meanwhile the Claimant Count, which measures the number of people claiming benefits aimed at helping the unemployed, rose by 3.6% between June and July, with another 94,400 seeking help. 

The Claimant Count has increased by 116.8% — or 1.4million — since March.

'JOBS CRISIS'

Responding to the data, Labour’s Shadow Work and Pensions Secretary Jonathan Reynolds said: “These figures confirm what we feared - Britain is in the midst of a jobs crisis.

"It is extremely worrying that this increase in unemployment has hit older workers, the self-employed and part-time workers hardest.”

He added: "The Government must wake up to the scale of this crisis, and put an end to this jobs crisis and adopt a more flexible approach targeted at the sectors who need it most.
 
"Every job lost is a tragedy and we must do all we can to safeguard people’s livelihoods.”

Rebecca McDonald, senior economist at the Joseph Rowntree Foundation, meanwhile said: “The latest figures cover a period when the full furlough scheme was still in place and millions were protected from the full force of the economic storm. 

“As furlough is wound down, the Government must live up to its commitment to do whatever it takes to support employers create new good jobs and equip jobseekers with the skills they need to access these opportunities.

"In the meantime, we must ensure Universal Credit provides enough timely support so people aren’t pulled into poverty.”

UNIVERSAL CREDIT

The ONS data came as separate figures from the Department for Work and Pensions showed that there has been a fall in the number of people beginning claims for Universal Credit after a sharp spike at the beginning of the pandemic.

During the first two weeks of the coronavirus lockdown there were more than half-a-million Universal Credit claims a week — a number the Department for Work and Pensions said was more than 9 times the usual level of claims made in a week.

"They have now returned to levels similar to before the coronavirus pandemic with 240,000 in the 4 weeks to 9 July 2020,” the DWP said.

The DWP data also reveals that young people now make up a greater proportion of those claiming Universal Credit than before the virus outbreak.

“The proportion of claimants starting on Universal Credit aged 16 to 19 year old (9.2%) and 20 to 24 year old (20.5%) has increased in July 2020 compared with March 2020 (6.7% and 14.4% respectively) at the beginning of the coronavirus pandemic,” the department said. 

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