U.K. Puts $1 Billion Into Job Centers to Help Wave of Unemployed

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The U.K. will plow 800 million pounds ($1 billion) into job centers, in an effort to cope with a wave of unemployment in the wake of the coronavirus pandemic.

The government will double the number of work coaches to 27,000 to help benefit claimants back into work, with an initial 4,500 hires by October, the Treasury said late Saturday in an emailed statement.

“The additional army of work coaches will give job-seekers bespoke, personalized support to build skills, improve their employment prospects, and find local jobs that are right for them,” the Treasury said.

The announcement comes as Chancellor of the Exchequer Rishi Sunak prepares to give a statement on Wednesday outlining measures to help stimulate the economy and protect jobs as the country continues to emerge from a national lockdown that began March 23. On Saturday, pubs were allowed to reopen, after non-essential shops were permitted to do so last month.

Sunak is focusing on protecting jobs — particularly for young workers who held more precarious roles before the pandemic and now face a struggle to find new work. He’ll put forward a wider stimulus package in a budget in the fall, when the effects of the lockdown and the unwinding of his furlough program to protect private-sector jobs will be more in evidence.

Injecting Confidence

With officials downplaying expectations about Wednesday’s statement, Sunak is coming under pressure from business groups to ensure he doesn’t just do the bare minimum to revive the economy.

“I would very much urge them to be bold and try to get ahead of some of the problems that are coming in the autumn rather than adopt a watch-and-wait approach,” British Chambers of Commerce Director General Adam Marshall said in an interview on Friday. The necessary support “is going to cost a lot of money and be difficult in a number of ways, but it’s also incredibly important because if they want to avoid significant unemployment and if they want to inject some confidence into both business and consumers, the time to do it is now.”

Marshall called for wage subsidies for apprentices, a fund to support jobs for young people and a cut to national insurance payments made by employers. He also suggested the government could issue vouchers for households to spend on retail high streets to get the economy moving again.

Here’s What Rishi Sunak Could Do to Stimulate the U.K. Economy

The chancellor’s emergency measures during the pandemic mean the government is now supporting the wages of almost 12 million private-sector workers under programs for furloughed workers and the self-employed.

Despite that, jobless claims have already doubled to almost 3 million, as the economy plunges into what may be its worst recession in three centuries.

Under the furlough plan, the government is paying 80% of the wages for 9.3 million jobs at a cost of 25.5 billion pounds. That support will decrease starting next month as companies are forced to shoulder more of the cost.

That’s prompted concerns about more pain to come, with Tesco Plc Chairman John Allan warning of a “tsunami of job losses.”

The toll is already beginning to show with companies including Airbus SE, Swissport International AG, Shirtmaker TM Lewin and the London department store Harrods announcing thousands of job cuts among them. On Friday, the manufacturing industry group Make UK said that 42% of firms plan job cuts in the next six months, with another 31% saying redundancies are possible.

By investing in job centers, Sunak is tapping a measure used by Gordon Brown’s government in the 2008-09 recession, when another 10,000 staff were recruited. To coordinate efforts to protect jobs, officials at the Treasury and the Department for Work and Pensions formed a unit reporting to Sunak and Work and Pensions Secretary Therese Coffey, according to the statement.

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