Biggest job creation package in peacetime needed to deflect increase in UK unemployment, think tank reports

Measures are needed to respond to the highest unemployment since the early 1990s

The government has been urged to switch its job retention scheme into a job protection scheme (Getty)

The biggest job creation package in peacetime is needed to head off a massive increase in unemployment as the UK recovers from the coronavirus crisis, according to a new report.

The Resolution Foundation also called for a job protection scheme to subsidise the wages of hospitality workers, who are among those hardest hit by the impact of the lockdown.

Measures are needed to respond to the highest unemployment since the early 1990s, said the think tank.

The foundation argued that policymakers need to recognise the “unique nature” of the crisis, with lasting job losses being concentrated in hardest-hit sectors.

During the lockdown, workers in hospitality, non-food retail and arts, leisure and entertainment have been more than twice as likely to have experienced job changes than the economy as a whole, said the report.

This was said to have put young people and low-paid workers in the firing line, as they are most likely to work in hard-hit sectors.

The government was urged to switch its job retention scheme into a job protection scheme, subsidising the wages of those working in the hardest-hit sectors, to enable firms to maintain employment.

Publicly-funded job creation should be focused on areas such as expanding the social care workforce and retrofitting homes while young people should be given job and training guarantees to help tackle youth unemployment, and the long-term scarring effects it can have on young people’s careers, said the foundation.

Nye Cominetti, senior economist at the Resolution Foundation, said: “Britain is slowly emerging from the lockdown that brought the economy to a halt and sent employment tumbling, but we are a long way off returning to business as usual, and its jobs crisis is far from over.

“A second wave of unemployment later this year, following the phasing out of the job retention scheme, could leave Britain with the highest unemployment levels in a generation.

“The government’s approach should include a job protection scheme to maintain employment in hardest-hit sectors and the biggest ever peacetime job creation programme.

“Major public investment in social care and retro-fitting homes could both spur job creation and help meet the challenges of an ageing population and climate change.

“The success of the job retention scheme in protecting family incomes has shown why it pays to be bold with policy decisions. That same ambition is needed in the next phase of the crisis.”

PA