Firms eyed 300,000 redundancies in summer due to Covid-19

Our Ride Out Recession Alliance (RORA) is working hard to come up with solutions to prevent the loss of jobs in the wake of the Covid-19 pandemic.

The headlines have been filled with announcements of redundancies and axed jobs but up until now the unemployment rate has remained at around four per cent as it tends to lag behind an economic downturn – the UK officially went into a recession last month.

That’s why figures released today by the BBC are an important indication of the impact on the jobs market.

So, with unemployment projected by the @bankofengland and @OBR_UK to rise sharply this Autumn, and some data already pointing toward this trend, further policy action is needed to limit the scale of Britain’s jobs crisis, particularly in hard-hit sectors of the economy. pic.twitter.com/aLs1mbWO0i

— Resolution Foundation (@resfoundation) September 8, 2020

Obtained from a Freedom of Information request, the national broadcaster reported that the British firms planned 300,000 redundancies in June and July with 1,784 companies looking to slash 150,000 jobs in July.

This followed on from 1,888 employers eyeing up 156,000 jobs to be made redundant in June as people were forced to stay home in lockdown, battering the high street and hospitality and retail industries.

During this time, the government paid wages to protect 9.6 million jobs through the furlough scheme. They also forked out billions in loans and grant to prevent businesses for going under.

A government spokesperson said: “We are also creating new roles for young people with our Kickstart scheme, creating incentives for training and apprenticeships, and supporting and protecting jobs in the tourism and hospitality sectors through our VAT cut and last month’s Eat Out to Help Out scheme.”

But the BBC figures highlight the scale of the challenge that ministers face to prevent an unemployment crisis.

Commenting on the BBC’s figures, Nye Cominetti, senior economist at the Resolution Foundation think tank, said: “The reason this data is so useful is that all our other official data is coming through with a time lag.

“This puts policy makers in a really challenging situation. The main government support schemes are coming to an end, but in terms of the official data, we still don’t know how big the jobs crisis is, or where we’re heading as we move into the autumn.”

The Big Issue is committed to doing everything it can to protect jobs, working alongside RORA partners Shelter, Nationwide Foundation, Unilever and many more to come up with plans to keep people in work. We need your ideas too. Tell us your experiences, ideas and plans at rora@bigissue.com.

Image: EPA/Andy Rain