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Labour: UK at risk of 1980s-level of unemployment without new government help

Saleha Riaz
·2-min read
People walk near the Job Centre in Westminster. Photo: Jack Taylor/Getty Images
People walk near the Job Centre in Westminster. Photo: Jack Taylor/Getty Images

Britain’s opposition party Labour has warned that joblessness in the UK could be as bad as it was in the 1980s unless the government does more to assist businesses that have been battling the economic fallout of the coronavirus pandemic.

There are already 2.8 million people unemployed in the UK and this figure could go up by another million unless the government steps in, according to analysis by the House of Commons Library reported by The Guardian. In 1984, unemployment in the UK peaked at 3.3 million.

Prime minister Boris Johnson is expected to use a speech next week to announce the creation of a taskforce charged with fast-tracking the building of schools, hospitals, roads, and even prisons.

However, Labour has said priority must be businesses that still don’t know when they will open, such as casinos, indoor gyms, bowling alleys, and nail bars.

READ MORE: UK unemployment rose just as COVID-19 hit

Jonathan Reynolds, Labour’s shadow work and pensions secretary, told Sky News: “We need a jobs budget — the focus should be jobs, jobs, jobs and jobs again.

The government should guarantee jobs to those out of work for a “significant period of time,” emulating the Future Jobs Fund which was created after the 2008 global crash, said Reynolds.

He also said Labour is calling for the Chancellor to be more flexible with the furlough scheme and continue to provide financial support to certain sectors.

Under current plans, employers will be required from August to make contributions to the furlough scheme but Labour wants sectors that cannot open to be exempt from this until they are fully up and running.

Shadow business secretary Ed Miliband told the Observer: “The scale of the economic emergency facing us is enormous. But the government is pulling the rug from under businesses employing one million people by demanding they start bearing the cost of the furlough when they don’t even know when they can reopen.

READ MORE: UK employers have slashed 600,000 staff since March

“The government’s approach will put jobs, businesses and livelihoods at risk, which will impose costs on us all. Failing to act to protect jobs now will only add to the burdens we face in higher benefit payments, lost tax revenues and a smaller economy.”

The Treasury has said it is already funding more than 8 million workers, at an estimated cost of a £14bn ($17.2bn) a month.

Recently, left-leaning Institute for Public Policy Research (IPPR) said that more than one million people will be “plunged into poverty” by the coronavirus crisis by the end of the year as cuts to jobs, pay and hours deepen.

New analysis suggests the number of people struggling below the breadline will be 7% higher by 2021 than if the pandemic had not hit the UK.