One year on

The labour market impacts of coronavirus and priorities for the years ahead

The pandemic led to a sharp rise in unemployment with groups like young people harder hit. The Government’s actions are welcome, but it should go further to tackle unemployment, increase employment, and support incomes.

To make sure we recover fully and rapidly from the crisis, and that everyone shares in that recovery, we recommend five areas where the Government should focus.

  1. Match furlough and other support to the impact of restrictions. The Government was right to extend furlough to September 2021. It should commit to bringing back furlough if further restrictions are required.
  2. Introduce a Youth Guarantee of a job, apprenticeship or training offer for all young people. This means engaging the 500,000 16-18 year olds leaving full-time education in summer 2021, and supporting those not claiming benefits too.
  3. Support incomes by making the £20 per week Universal Credit uplift permanent and cutting National Insurance for the lowest earners. This means not cutting the incomes of the poorest 10% of households by 5%, and bringing National Insurance thresholds more into line with income tax.
  4. Help people back to work as quickly as possible. We should focus expanded employment support capacity on those already out of work before the pandemic if unemployment rises less than previously expected, including introducing a Job Guarantee for people who are long-term unemployed.
  5. Promote employment growth and good work. Including by raising the threshold for paying National Insurance to give a tax cut to low paid workers and help employers adapt to increases in the minimum wage.

The crisis has had a stark effect. We are now focused on recovery. The Government has taken many of the right steps, but needs to go further and focus on delivery and a vision of the future. An unprecedented crisis demands an unprecedented recovery.