Introduce 'Plan for Jobs' to prevent Great Depression levels of unemployment

The Government has been urged to develop an ambitious ‘Plan for Jobs’ to reverse the record rise in unemployment triggered by the coronavirus crisis.


12 06 2020


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New modelling by Learning and Work Institute – a leading labour market think tank – warns that unemployment could be on track to exceed four million. This would mean an unemployment rate higher than at any point since 1938, in the wake of the Great Depression.

The report finds that the rise in unemployment has been the sharpest ever seen. One in three working age adults are now either unemployed, furloughed, or supported through the self-employment income support scheme.

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The increase in unemployment would have been sharper still had it not been for the Coronavirus Job Retention Scheme. However, the gradual withdrawal of this scheme risks triggering a ‘second wave’ of unemployment, as many of the 8.9 million furloughed workers will be unable to return to their jobs. Even if the economy quickly rebounds, it is likely to be years before employment returns to its pre-crisis levels.

The impact of the crisis will be felt unevenly across the UK. Regional inequalities are set to deepen as early data suggest more jobs have been lost in areas with lower pre-crisis employment. Young people face a particularly high risk from unemployment, leading to fears of a ‘pandemic generation’, with permanent scarring on incomes and earnings.

The report calls on the Government urgently to introduce an ambitious ‘Plan for Jobs’, including;

  1. Large-scale investment and incentives to create jobs with shovel-ready and jobs-rich schemes brought forward. Rather than cutting employer taxes – which would be expensive and less effective – action should be taken to stimulate demand, including through car and boiler scrappage schemes.
  2. A Youth Guarantee to prevent a rise in long-term youth unemployment, including maintenance support to help 18 year olds to stay on in education; an Opportunity Fund to create ring-fenced temporary jobs for young people; and reforms to the apprenticeship system to re-focus funding on young people.
  3. A massive expansion of help to find work, including for the millions of furloughed workers at risk of losing their jobs. This should include £800 million in redundancy, retraining and reemployment support, at least 10,000 extra Jobcentre Plus Work Coaches, and £2.4 billion of support for the long-term unemployed.
Stephen Evans, chief executive of Learning and Work Institute, said;
The Government has taken unprecedented action to protect jobs and incomes during the crisis. Yet despite this, we’ve still seen the sharpest spike in joblessness on record, and we risk unemployment rising to levels last seen in the Great Depression. We need a Plan for Jobs whose ambition matches the scale of the challenge by driving employment growth, guaranteeing young people work or training, and providing rapid employment support to the millions of people who now find themselves unemployed.
Dominic Atkinson, CEO of Stay Nimble, said;
This report highlights the visible slow-moving storm approaching millions of workers in the UK as we all adjust to the effects of the pandemic. While the Government has taken action to mitigate the immediate impacts to employment for millions, the damage caused by COVID-19 will be present for many years to come. It’s vital that, while we have time to build a response based on these recommendations, that we act now to give millions of people the support they need to navigate the jobs market over the coming months and years.