600,000 workers lose jobs... and there’s worse to come

BRITAIN got its first glimpse of the predicted jobs market meltdown yesterday as stark figures showed the number claiming outof-work benefits had soared to almost three million.

And the statistics also revealed that the total on company payrolls had slumped by more than 600,000.

The number claiming either Jobseekers’ Allowance or Universal Credit more than doubled between March and May – rising by 1.6million to 2.8million, the Office for National Statistics said.

The rush for support eclipsed that seen during the first year of the Great Depression, the Institute for Employment Studies warned.

Although these benefits can be claimed by some workers on very low pay, separate ONS figures yesterday suggested that many of these new claimants had actually lost their jobs. The number of workers on UK payrolls fell by 612,000 between March and May.

At the same time, official figures showed that the number of furloughed workers claiming taxpayer support under Chancellor Rishi Sunak’s Job Retention

Scheme had topped nine million for the first time. Business leaders, economists, and politicians said they feared a fresh ‘tsunami of job losses’ in the coming months as the scheme was wound down.

The new figures triggered a string of fresh calls for Boris Johnson to scrap the two-metre social distancing rule and to ease the lockdown. Both moves are seen as vital to restarting the economy and minimising job losses long term.

Yesterday’s ONS data showed that the official headline rate of unemployment had barely budged at 3.9 per cent between February and April – covering the first five weeks of lockdown.

But the warning signs were flashing everywhere else in the official data on benefits claimants and payroll numbers.

There was also a record slump in the number of hours worked. And the ONS registered the biggest fall in job vacancies on record between March and May.

Former foreign secretary Lord Hague described the lockdown as an ‘economic catastrophe’.

Tony Wilson, director of the Institute for Employment Studies, said: ‘If the public health crisis is just starting to ease, today’s figures show that the unemployment crisis is only just beginning.’

Mr Sunak is already drawing up plans for an emergency budget – pencilled in for early next month – to kickstart the economy, retrain workers and create jobs. Yesterday he acknowledged that the ONS figures ‘confirm that coronavirus is having a severe impact on our economy’ – but added that the Government had provided ‘lifelines’ to thousands of businesses and millions of workers.

‘As we look to bounce back, one of the best ways to protect people’s livelihoods and provide opportunities to those who have lost jobs is to safely reopen our economy so people can return to work,’ he said. ‘We’ve set out our plan to do this in a gradual and safe fashion.’

But furloughed workers were told to prepare for a ‘jobs meltdown’ over the summer as firms rush to shed staff before being forced to contribute to their wages again. Latest figures show 9.1million jobs have been furloughed under the

Job Retention Scheme, at a cost of £20.8billion so far. HM Revenue & Customs also revealed that 2.6million self- employed workers are receiving support under a separate scheme which has cost £7.6billion.

It means in total the incomes of 11.7million workers – more than 40 per cent of the private sector workforce – are being paid by the state.

The Job Retention Scheme pays 80 per cent of the wages of furloughed employees, up to £2,500 a month. But it is set to be gradually wound down from the start of August, with businesses initially told to pay the National Insurance and pension contributions of furloughed staff, before it is shut at the end of October.

Experts predict many redundancy letters will be sent out from this week because employers have to give 45 days’ notice before cutting roles.

‘The unemployment crisis is just beginning’