Ministers admit they are bracing for unemployment to hit FOUR MILLION within months – as pubs warn they face laying off a QUARTER of staff
- Office for Budget Responsibility predicted unemployment could hit four million
- Therese Coffey said Department for Work and Pensions preparing on that basis
- But she said ministers ‘genuinely hope we don’t reach, obviously, that figure’
- It came as pub bosses warned that a quarter of staff are facing redundancy
Ministers are bracing for unemployment to hit four million over the winter months as pub bosses warned a quarter of staff are facing redundancy when furlough ends.
The Office for Budget Responsibility spending watchdog has forecast that unemployment could peak at 12 per cent by the end of the year, the equivalent of four million workers.
Work and Pensions Secretary Therese Coffey has revealed her department is preparing on the basis of that prediction and is bolstering the Universal Credit benefits system ahead of an expected surge in claims.
However, she insisted ministers ‘genuinely hope we don’t reach, obviously, that figure’.
Work and Pensions Secretary Therese Coffey has confirmed her department is preparing for the coming months on the basis that unemployment could hit four million
Pub bosses today warned that they are facing big redundancies when the furlough scheme ends this month. Drinkers are pictured in central London on September 25
Chancellor Rishi Sunak is ending the furlough scheme at the end of this month and replacing it with a less generous wage subsidy programme to help people who can work part-time in ‘viable’ jobs.
Experts have warned the move to the Jobs Support Scheme will inevitably lead to widespread job losses as the Government removes help for so-called ‘zombie’ roles with no future.
The OBR has forecast in its ‘central’ coronavirus economic scenario that unemployment will peak at four million at the end of 2020.
In its ‘downside’ forecast with 13 per cent unemployment the number is even higher at 4.5 million.
Ms Coffey confirmed in an interview with Sky News that the Department for Work and Pensions is preparing on the basis of the ‘central’ forecast.
She said: ‘I think we’re in a number similar in terms of being ready to help people and trying to help them get back to work as quickly as possible.
‘We’re bringing people into the organisation and in a COVID safe way in order to respond to the challenge.
‘I genuinely hope we don’t reach, obviously, that figure. But it’s important we are ready to help people.”
Ms Coffey said her department is ‘evolving’ its plans to help more people but she stressed that the Government ‘never promised we could save every single job or every single company’.
‘We will do our best to try and help businesses keep going,’ she said.
‘But we have reached a point where we absolutely recognise we cannot pretend, we’ve never pretended, we can save every job.’
The most recent Office for National Statistics data showed the UK unemployment rate in May/July was 4.1 per cent. Experts fear that could spike significantly in the coming months.
The end of furlough and the Government’s 10pm curfew on pubs, restaurants and bars is expected to hit the hospitality sector particularly hard, especially as the nation moves towards winter.
The UK unemployment rate in May/July this year was 4.1 per cent, according to the Office for National Statistics, but experts are bracing for a surge in the winter months
Clive Watson, the executive chairman of the City Pub Group which has 48 pubs across South East England, said his company is facing ‘tough decisions’.
Asked what the firm will do when the furlough scheme ends, he told BBC Radio 4’s Today programme: ‘We have got about 12 per cent of our workforce on full furlough and 40 per cent of our workforce on what we call flexi-furlough.
‘So we are going to have to make some tough decisions. Trade is shrinking because of the curfew and because of social distancing.
‘Unfortunately we are going to have to look at making up to 25 per cent of our workforce redundant. That will be about 250 people.’