649,000 fewer staff on firms’ payrolls since the start of lockdown

THE number of UK workers on company payrolls has now fallen by 649,000 during lockdown, according to official figures.

The Office for National Statistics said the coronavirus crisis claimed another 74,000 jobs last month.

The new jobs figures came as leading economists claimed about one third of Rishi Sunak’s jobs plan is recycled rather than new money.

The Institute for Fiscal Studies believes between £8 billion to £10 billion of the rescue package comes from underspends on funding previously earmarked for other projects.

It accused the Chancellor of a “lack of transparency” and of fuelling “confusion” over the scale of the fiscal support being provided. However, Treasury sources rejected the accusations, insisting they had been open about the amount of spending and that it was not all new money.

A Treasury spokesman said: “This is wrong. Last week’s Plan For Jobs outlined new activity and no projects were deprioritised or cut.”

The IFS said it came to its findings partly by reverse-calculating how much funding should, but has not been allocated to Scotland, Wales and Northern Ireland under the Barnett Formula if the money had been new spending.

The report alleged:

⬤ Of the Plan For Jobs, the Treasury

has assumed almost £8 billion is money it had previously budgeted to spend on other things. The Office for Budget Responsibility believes the figure could be higher at £10 billion.

⬤ The £2 billion Green Homes Grant scheme for England is funded from within pre-existing spending limits.

⬤ Almost half of some £400 million of cash for traineeships, apprenticeships, school leavers and careers advice in England is funded by reallocating funding within existing spending envelopes.

⬤ The £5.5 billion infrastructure package represents an acceleration of previously planned investments but seems to be funded by newly anticipated underspends on other capital projects rather than an increase in overall investment spending this year.

⬤ It can make sense to re-prioritise and re-profile spending, partly as some may no longer represent value for money or could be infeasible, but it’s important to make clear what is being cancelled or postponed.

IFS associate director David Phillips said: “In its Summer Economic Update last week, the UK Government launched its £30 billion Plan For Jobs. What it didn’t say was that almost £8 billion of that is to be paid for by spending less than previously planned on other things.

“Indeed, the whole of the £5 billion of additional capital spending trumpeted by the Prime Minister a couple of weeks ago in fact represents funding previously allocated to other capital projects which will no longer happen this year.”

The number of people claiming benefits has more than doubled since March, or by 1.4 million.

However, the ONS said unemployment fell 17,000 between March and May to 1.35 million, with the rate unexpectedly unchanged at 3.9 per cent.

Experts said this masked a sharp fall in employment, down 126,000 in the quarter to 32.95 million, with the rate dropping to 76.4 per cent.

This decline was the steepest since 2011 and was driven mostly by a record fall in the self-employed, the ONS said.

The British Fashion

Almost £8 billion is to be paid for by spending less on other things David Phillips

Council said it fears 240,000 jobs in the industry risk being lost over the next 18 months, more than a quarter of the workforce.

Business Secretary Alok Sharma said many people are facing a “very, very difficult” time.

“The best thing we can do is continue to open up the economy in a phased manner,” he told the BBC.