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Remember Britain’s “jobs miracle”? Who could forget it. Until the arrival of Covid-19 on these shores, this Government never stopped talking about it. Amid low growth, poor productivity and permanent wage freezes, it was the Conservatives’ one great boast about the economy.
Under David Cameron, unemployment plunged to its lowest levels since the 1970s. His Chancellor George Osborne even pledged to restore Britain to “full employment”, though he of course declined to put a number on what that meant exactly.
The latest figures now make such promises sound like a bad joke, or a distant memory at best. A decade of rising employment has been wiped out in a matter of months, destroyed by lockdown and the pandemic. We’ve gone from talk of a jobs miracle to a jobs crisis almost overnight with the prospect of mass unemployment now suddenly very real.
Unemployment is accelerating at its fastest ever rate, leaping from 4.1pc to 4.5pc from June to August, worse than anticipated, and the highest level since spring 2017. There was an increase of 138,000 in the quarter alone, taking total unemployment to 1.5m.
That would be a worrying enough surge at any stage but against a backdrop of unprecedented state support for the jobs market in the form of the Chancellor’s furlough scheme and during a period when Eat Out to Help Out was meant to boost swathes of the economy, it is terrifying.
Imagine, then, what lies in store, once this giant safety net is suddenly whipped away at the end of the month. The question is simply how big the next jump will be. Berenberg expects unemployment to nearly double again to 8pc in the final quarter of the year alone. That’s higher than the peak during the financial crisis. And yet, that’s still not as bad as things could get, not even close, according to some forecasts.
An incredible 3m workers remain on furlough. With restrictions tightening across the country, how many of those can expect to still have jobs once the scheme ends? A study from the Centre for Economics and Business Research found that UK businesses are planning to lay off more than a third of furloughed workers at the end of October – equivalent to one million people.
ING economist James Smith believes the UK jobless rate could hit 10pc this winter – the highest since the 1993 recession. The Office for Budget Responsibility’s central scenario has the jobless rate peaking at an astonishing 12pc, worse than the dark days of the Eighties.
The young are being hit disproportionately hard. There has been a record fall in the number of 18 to 24-year-olds in work. Part-time staff and self-employed people are also being hammered.
Telling people to retrain or to enrol on apprenticeships isn’t going to cut it. Retrain as what? Which industries offer real prospects right now? How does someone with a family to feed and a mortgage to pay become an apprentice?
The expansion of the job support scheme will help but employers say it isn’t generous enough. And what about job creation? Research suggests the odds of finding a job are their worst for 50 years with thousands of people chasing a tiny number of vacancies. In one case, 15,000 people applied for 10 factory jobs in Birmingham.
More needs to be done. The UK’s jobs miracle has evaporated and the Government seems powerless to stop it.
Stockpiling the misery
The attitudes towards alcohol could not have been more different in the First and Second World Wars. Whereas war minister David Lloyd George considered drink to be another enemy in the First World War, food minister Lord Woolton declared beer to be essential for morale in 1940.
It is pleasing to report that modern day Britons have embraced the latter approach, getting sozzled at every opportunity in an effort to escape the misery. After the 10pm curfew was imposed in September, we rushed to the supermarkets, spending an additional £261m on booze, compared to the same month the previous year, according to data specialists Kantar. The end of Eat Out to Help Out will also have played a part.
That’s not the only snippet. Kantar seems to be at great pains to avoid the impression that people are panic buying because if there’s one thing guaranteed to send people running to their local supermarket to stock up on toilet roll, it’s the fear that everyone else is stocking up on toilet roll.
So, it is careful to say “there is limited evidence of consumers stockpiling”. The problem with that of course, is that “limited” means there has still been some. I give it a week before people are wrestling in the aisles for that last tin of beans.
You can check out, but never leave
Ikea says it will buy back customers’ unwanted furniture. I’d like to propose another new initiative: free meatballs for anyone hopelessly lost in the seemingly endless maze to the checkouts. Be honest, it’s happened to all of us.