A true pic­ture of the loom­ing job­less­ness cri­sis has yet to be painted by the Chan­cel­lor

The un­em­ploy­ment fig­ures still do not re­flect what is re­ally hap­pen­ing in Bri­tain’s post-Covid world

The Daily Telegraph - Business - - Coronaviru­s: Sunak’s Winter Economy Plan - LIAM HALLIGAN

One of the first records I ever bought was by UB40 – the Birm­ing­ham-based reg­gae band named af­ter the form used to claim un­em­ploy­ment ben­e­fit.

The hit sin­gle “One in Ten”– re­leased in 1981, the year job­less­ness in the West Mid­lands reached 10pc – blew my 12-year-old mind. Through­out the early Eight­ies, amid dein­dus­tri­al­i­sa­tion and in­dus­trial un­rest, UK-wide un­em­ploy­ment surged, peak­ing at al­most 12pc in 1984. The so­cial and po­lit­i­cal fall­out was huge.

Over the com­ing months, a sim­i­lar de­gree of job­less­ness is, un­for­tu­nately, in­evitable. That was the un­spo­ken ad­mis­sion in Rishi Su­nak’s Win­ter Econ­omy Plan. “I can­not save ev­ery job,” the Chan­cel­lor told the House of Com­mons yes­ter­day. But the ex­tent to which un­em­ploy­ment is about to rise – and the pro­found im­pact on pol­i­tics and broader so­ci­ety – is yet to be widely un­der­stood.

Over re­cent months, count­less pun­dits have won­dered aloud why, de­spite the UK en­dur­ing the sharpest eco­nomic con­trac­tion in three cen­turies, un­em­ploy­ment has stayed

‘In the early Eight­ies, amid in­dus­trial un­rest, UK-wide job­less fig­ures surged, peak­ing at al­most 12pc’

‘No­body knows me, but I’m al­ways there. A statis­tic, a re­minder in a world that doesn’t care’

low. The lat­est of­fi­cial data sug­gests a job­less rate of 4.1pc, just 0.3pc up on last year, be­fore any lock­down.

These head­line fig­ures, though, are by no means the full story. They cover those “ac­tively look­ing for work” – and, of course, many un­em­ployed peo­ple aren’t, due to Covid-re­lated re­stric­tions. The “claimant count” mea­sure, in con­trast – those draw­ing some kind of un­em­ploy­ment-re­lated ben­e­fit – has in­deed spiked. It is now up at 2.7m, hav­ing more than dou­bled since March. Given a work­force of around 32m, that sug­gest a job­less rate al­ready up above 8pc. And that is be­fore the fur­lough­ing scheme is wound up at the end of this month.

I ac­cept that, given how the ben­e­fits sys­tem has changed since the days of UB40, the “claima nt count” now in­cludes some peo­ple still work­ing but on low pay, re­ceiv­ing top-up as­sis­tance. That sug­gests fewer than 2.7m may ac­tu­ally be un­em­ployed. Weirdly, though, the Depart­ment for Work and Pen­sions has told me “it’s not pos­si­ble to quan­tify how many” re­ceive so-called “in-work” ben­e­fits.

Con­sider, also, that HMRC data shows the num­ber of em­ploy­ees on UK pay­rolls fall­ing sharply dur­ing lock­down. And the labour force sur­vey fine print points, in ad­di­tion, to a sharp drop in self-em­ploy­ment. So is it en­tirely rea­son­able to sug­gest un­em­ploy­ment is al­ready over 8pc, de­spite the head­line num­bers?

Su­nak yes­ter­day con­firmed fur­lough­ing will be re­placed by the Jobs Sup­port Scheme, back­ing only “vi­able” jobs. Some ex­pected a more “sec­toral” ap­proach, back­ing cer­tain in­dus­tries, but that was judged to be too dif­fi­cult. Sup­port will be of­fered, in­stead, to firms suf­fi­ciently vi­able to keep peo­ple in part-time work, sim­i­lar to Ger­many’s Kurzarbeit sys­tem, adopted af­ter the 2008 fi­nan­cial cri­sis.

Yes­ter­day’s Down­ing Street photo shoot – with the Chan­cel­lor flanked by the lead­ers of the Trades’ Union Congress and the Con­fed­er­a­tion of Bri­tish In­dus­try – in­deed seemed more Ger­man cor­po­ratism than Bri­tish lais­sez-faire. Such in­dus­trial har­mony, though, is un­likely to last very long.

Back in May, around 30pc of the UK work­force was on fur­lough. By mid­sum­mer, that fig­ure was down to 11pc. But that still means, de­spite lock­down eas­ing in July, some 3m work­ers re­main on fur­lough. And last week’s mea­sures – the rule of six and other re­stric­tions – won’t im­prove their chances of re­turn­ing to work.

Even if just one in three of these fur­loughed work­ers loses their job en­tirely when the scheme ends in Oc­to­ber then un­em­ploy­ment will spike above 3.5m, or 11pc, sim­i­lar to its mid-Eight­ies peak.

Su­nak yes­ter­day claimed there is no Trea­sury fore­cast for the un­em­ploy­ment level. I think we can con­clude there is, in fact, no fore­cast he’s pre­pared to pub­lish.

And, while this is no crit­i­cism, I can­not agree with the Chan­cel­lor when, re­ply to ques­tion­ing in the Com­mons, he said un­em­ploy­ment could reach “high sin­gle dig­its by the end of the year”. That’s too op­ti­mistic. Back in July, even the Of­fice for Bud­get Re­spon­si­bil­ity pub­lished a “cen­tral sce­nario” un­em­ploy­ment pre­dic­tion of 12pc – as­sum­ing no sec­ond lock­down.

Mass un­em­ploy­ment will fur­ther con­vulse our pol­i­tics. Ex­pect even more ve­nal party war­fare, even more class con­tempt. The Bank of Eng­land will come un­der huge pres­sure to buy count­less govern­ment bonds, weak­en­ing ster­ling. Lock­down mea­sures be­come more dif­fi­cult to de­fend and en­force.

“No­body knows me, but I’m al­ways there,” sang UB40. “A statis­tic, a re­minder in a world that doesn’t care”. Ex­pect plenty of sim­i­larly an­gry songs to emerge in the dif­fi­cult months ahead.

UB40’s song ‘One in Ten’ en­cap­su­lated the anger at the un­em­ploy­ment cri­sis in the Eight­ies

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.