Calls for more help as unemployment surges

26 February 2021

With the latest official labour market statistics from the Office for National Statistics showing that the unemployment rate rose to 5% in the three months to November 2020, there have been calls for Government action from a range of organisations.

Tej Parikh, Chief Economist at the Institute of Directors, said that it was crucial that the Job Retention Scheme and other Covid-19 economic support should be extended beyond the spring to support employment.

For the REC (Recruitment and Employment Confederation), Chief Executive Neil Carberry said that the latest figures were disappointing but not surprising.

“Reforming the Apprenticeship Levy to boost skills, reducing the cost of furlough, deferring 2020 VAT repayments and reducing the jobs tax — employers National Insurance — would all be sensible steps,” he argued.

Pointing out that the two largest rises in unemployment in 2020 occurred in months when support was reduced or expected to end, the TUC has told Chancellor Rishi Sunak that he must urgently extend the job retention scheme to save jobs.

General Secretary Frances O’Grady said: “It’s time to end the uncertainty and anxiety. The Chancellor must urgently extend furlough support to the end of the year to keep jobs safe.”

Meanwhile, the Chartered Institute of Personnel and Development (CIPD) has highlighted that redundancies are not an easy or cheap option for businesses, costing around £11,000 per individual.

Labour market economist, Jon Boys, said that many of these jobs stand to be viable again in just a few months' time, which is why the CIPD is calling for the furlough scheme to be extended until at least the end of June.

“It is also important,” he went on, “that the furlough scheme is linked to support for training for workers who are furloughed or working reduced hours.”

Finally, the Federation of Small Businesses echoed a point made by the REC in calling for a cut in employer’s National Insurance contributions.

Comment by Paul Holcroft, Managing Director at Croner

There are many incentives in place from the Government to assist employers in tackling unemployment, especially targeted at young people.

Still, it is evident that other priority groups are potentially being overlooked. A vast number of employers may find it difficult to solve unemployment issues independently, seeing how the coronavirus pandemic has negatively impacted businesses.

However, some may begin to contribute in small ways whilst legislative developments are awaited; for example, by offering training to furloughed staff to help them retain key skills.