BRACE FOR IMPACT ON THE ECONOMY
Economist: High unemployment is about to hit Retail hospitality
THE UK will face “really high unemployment for the foreseeable future” after the coronavirus pandemic, leading economists warned yesterday.
Torsten Bell, chief executive of the Resolution Foundation, said households should prepare for a “big labour market shock” despite Government measures to protect jobs.
Bell told MPs on the Commons Treasury Committee that the unemployment bounce-back “could be slower” than some have predicted.
He said: “I think we will see some spark back in activity as we leave the hard lockdown.
“The reasons to be nervous are that the sectors which are generally the quickest to bring people back to work are hospitality and retail.
“They were a big part of bringing people back into work in the financial crisis but that won’t be so easy this time.
“We expect really high unemployment for the foreseeable future.”
Paul Johnson, director of the Institute for Fiscal Studies, told the committee that there are “a lot of gaps” in the state’s coronavirus financial support package.
He said: “Some of these gaps are big.
“There are possibly as many as two million company owner-managers, 650,000 or so selfemployed people who set up since April 2019, 200,000 self-employed earning over £50,000 and others working outside the scheme.
“It was a very broad and roughand-ready scheme in terms of providing income replacement.”
The comments came as Finance Secretary Kate Forbes warned of a return to austerity unless the Scottish Government is given extra borrowing powers.
She said: “Our funding needs for the NHS, business and the third sector are greater than the sums provided by the UK Government and, as things stand, the Scottish budget will have to make up the balance.
“It is critical we have borrowing powers and greater financial flexibility to respond effectively.
“Otherwise, the only way the Scottish Government will be able to fund our response would be to make deep cuts to other services.”
But a UK Government spokeswoman said: “Scotland is benefiting from an unprecedented £3.7billion package of support.
“This is on top of the support people in Scotland are receiving through UK-wide measures such as business loans and the job retention scheme.
“The Scottish Government has its own agreed borrowing powers and a £700million Scotland reserve.”