Unemployment figures will cask dark shadow over economy

By Ian Mean Business West Gloucestershire Director
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Shops starting to open today are a welcome first baby step in re-starting the economy of Gloucestershire.

But I am afraid the gloomy unemployment figures due out on Tuesday will inevitably cast a dark shadow over the prospect of big job losses over the next few months.

The Chancellor’s job retention scheme with the government paying furloughed workers’ wages now covers something like 8.9m employees-about a third of the country’s total workforce.

Monday of this week was the last day when large companies intending to cut more than 100 jobs can start redundancy consultations if they want to avoid at least some of the costs of their furloughed staff from August.

Across the West, more than 650,000 jobs have been furloughed due to the coronavirus pandemic with another 224,000 self-employed people claiming £665m in total through the government support scheme.

Forget party politics—this has been a brilliant scheme that has probably saved more than a million jobs.

But the big question for the Chancellor and the government now is to how to avoid a jobs bloodbath when the scheme begins to wind down at the end of July and ends in October.

There are now real fears that there could be as many as 4.8 million people unemployed or a staggering 14% of the workforce by the end of the year.

We have never seen a jobs crisis like this before. It was only 8.5% after the financial crisis.

I have written before about the bleak future facing young people looking for jobs combined with workers being made redundant as the furlough safety net begins to close.

Going back to the shops will undoubtedly help re-start our economy but confidence is the key.

People wary of the virus will , in my view, not be going back to the shops in droves.

And more importantly, many people on furlough with their children at home will find it difficult to go back to work fearing redundancy.

The government must again dig deep into the Treasury coffers to support business-particularly to guarantee apprenticeships, skills and re-training programmes.