Last month I wrote about the initial unemployment figures during the Covid-19 crisis. This month’s figures, relating to the first full month of lockdown, were never going to be good. But the news that 2.8m people are now in receipt of either Universal Credit and Jobseeker’s Allowance, on top of the millions furloughed, is definitive proof that unemployment will be one of the biggest problems of the coronavirus pandemic.
Locally in this constituency we now have 4,590 people in receipt of UC and JSA, plus 11,200 jobs furloughed and a further 2,800 people supported by the Self Employment Income Support Scheme. I talked last month about how we must never forget the human stories behind these figures, or become numb to them because of their size. In an economic crisis unemployment rises sharply, but on average takes seven years after that crisis to return to trend. The experience of unemployment, particularly for younger workers, takes many years to get over.
The Government response must be urgent. They should call a Budget immediately with just one focus – jobs, jobs and jobs again. Everything must be done to keep people in employment so the figures don’t get worse, including bringing forward investment projects scheduled for later years. The furlough scheme should be tailored and end flexibly in sectors particularly hard hit, such as hospitality. Sectors that are the most labour intensive, such as social care and retrofitting homes, should the priorities for further Government spending. As we did after the financial crisis in 2008, young people should be guaranteed a job if they’re out of work for more than six months.
We cannot wait to do this. If we were to wait until the Autumn for a Budget, any measures other than tax changes would not come into effect until next year. At that point, some people would already have been out of work for six months. By contrast, Germany announced it’s job stimulus package two weeks ago.
We will also need to better support people who are out of work. The social security system we had going into the crisis was not fit for purpose. The Government themselves acknowledged this with the immediate changes they made to Universal Credit. As the Shadow Secretary of State for Work and Pensions I welcomed these but they need to go further. It is my hope that this will be a moment for a fundamental look at how the social security works, and a chance to replace it with something fundamentally more supportive, efficient and run in the interests of what works for people rather than the assumptions of Government ministers.