UK puts RM4.3b into job centres to help wave of unemployed

Jobless claims have already doubled to almost 3m, as the economy plunges into what may be its worst recession in 3 centuries

LONDON • The UK will plop £800 million (RM4.28 billion) into job centres, in an effort to cope with a wave of unemployment in the wake of the coronavirus pandemic.

The government will double the number of work coaches to 27,000 to help benefit claimants back into work, with an initial 4,500 hires by October, the Treasury said in an emailed statement on late Saturday.

“The additional army of work coaches will give a job-seekers bespoke, personalised support to build skills, improve their employment prospects and find local jobs that are right for them,” the Treasury said.

The announcement comes as Chancellor of the Exchequer Rishi Sunak prepares to give a statement on Wednesday outlining measures to help stimulate the economy and protect jobs as the country continues to emerge from a national lockdown that began on March 23. On Saturday, pubs were allowed to reopen, after non-essential shops were permitted to do so last month.

Sunak is focusing on protecting jobs — particularly for young workers who held roles that are more precarious prior the pandemic and now face a struggle to find new work. He will put forward a wider stimulus package in a budget in the fall, when the effects of the lockdown and the unwind- ing of his furlough programme to protect private-sector jobs will be more in evidence.

With officials downplaying expectations about Wednesday’s statement, Sunak is coming under pressure from business groups to ensure he doesn’t just do the bare minimum to revive the economy.

“I would very much urge them to be bold and try to get ahead of some of the problems that are coming in the autumn rather than adopt a watch-and-wait approach,” British Chambers of Commerce DG Adam Marshall (picture) said in an interview last Friday. The necessary support “is going to cost a lot of money and be difficult in a number of ways, but it’s also incredibly important because if they want to avoid significant unemployment and if they want to inject some confidence into business and consumers, the time to do it is now”.

Marshall called for wage subsidies for apprentices, a fund to support jobs for young people and a cut to national insurance payments made by employers. He also suggested the government could issue vouchers for households to spend on retail high streets to get the economy moving again.

The chancellor’s emergency measures during the pandemic mean the government is now supporting the wages of almost 12 million private-sector workers under programmes for furloughed workers and the self-employed.

Despite that, jobless claims have already doubled to almost three million, as the economy plunges into what may be its worst recession in three centuries.

Under the furlough plan, the government is paying 80% of the wages for 9.3 million jobs at a cost of £25.5 billion. That support will decrease starting next month as companies are forced to shoulder more of the cost.

That has prompted concerns about more pain to come, with Tesco plc chairman John Allan warning of a “tsunami of job losses”. — Bloomberg