'Workers and businesses still need more help'

New figures published today (June 15) have shown signs that the labour market is recovering after lockdown restrictions eased earlier this year, with unemployment falling for the fourth month in a row in April.

With the unemployment rate falling in the three months to April to 4.7 per cent, this was a marginal improvement from the three months to March, when the unemployment rate was 4.8 per cent.  

Other promising signs include a spike in hiring — thought to be fuelled by pent-up demand after lockdown was eased, with staff on company payrolls rising by nearly 200,000 — according to figures  from the Office for National Statistics (ONS) for the month of May.

Despite promising signs, the data still shows more than half a million fewer people on company payrolls than before the Covid-19 crisis. Only 54,000 of the more than 240,000 jobs lost in London have been recovered since the pandemic began, and just 40,000 of the 135,000 jobs lost in South East have been regained.

Meanwhile, in specific sectors, another worrying picture emerges showing the scale of the crisis to date. In manufacturing, jobs are down by 105,000 since the beginning of the pandemic, while in arts and entertainment, 110,000 jobs have gone. In accommodation and food services, a staggering 350,000 jobs have been lost.

The latest data from the ONS comes just a day after prime minister Boris Johnson announced on Monday (June 14) that the planned date for the government’s final stage in the roadmap out of lockdown – June 21, when most restrictions were to be lifted – will now be delayed by four weeks.

The news came as a blow to many industries, especially in hospitality, and prompted Unite and other unions to call on the government to provide a necessary and urgent extension of financial support for workers and their beleaguered sectors.  

Commenting, TUC general secretary Frances O’Grady said, “Last night’s announcement means many workers and businesses will need more help – especially in the arts and hospitality sectors. Ministers must step up and provide targeted support for these industries. We can’t afford for more companies to go the wall, taking good jobs with them.

“Government must delay asking businesses to make contributions to the furlough scheme in July and extend the scheme as long as needed,” she added.

As UniteLive highlighted on Monday (June 14), from July 1st, the furlough scheme is set to be scaled back to where the government will cover 70 per cent of workers’ wages – down from 80 per cent previously — while employers are expected to cover 10 per cent and workers forgo the remaining 20 per cent.

From August, employers’ contributions will increase further to 20 per cent, with the government’s contributions decreasing to 60 per cent, before the furlough scheme is set to end altogether in September.

But hospitality employers have pointed out that there are many venues, such as night clubs, that will not be able to legally open since lockdown easing is delayed, while other venues will continue to operate on much reduced capacity, meaning employers will struggle to meet their contributions from July 1.

Although chancellor Rishi Sunak is reportedly now refusing to extend the furlough scheme beyond September, despite demands from industry, Labour’s shadow chancellor Rachel Reeves urged the government to see sense in light of the most recent delay to lockdown easing.

“For sectors like hospitality, tourism, and our music industry that continue to be affected by restrictions, a month is a long time. Many businesses have financial pinch points coming up but are still struggling to turn a profit,” she said.

“If businesses have to stay closed or operate at massively reduced capacity they’re not going to be able to pay staff, rents and loans back. Government support must recognise that.”

Unite assistant general secretary Steve Turner, who was part of the union team that negotiated furlough when the crisis first hit, reiterated Unite’s call for an extension of the furlough scheme.

“With lockdown extended to July 19, so must vital support for workers and businesses forced to close — extend furlough now!” he tweeted. “Government failures to deal with variants have led to threats of a third wave, growing debt and fear for jobs — none are the fault of working people.”

By Hajera Blagg