Unions and thinktanks have said the government should be doing more to prevent mass unemployment despite the chancellor announcing a bonus for companies that bring workers back from furlough and a VAT cut on hospitality.
Frances O’Grady, the general secretary of the TUC, said: “The government must do far more to stem the rising tide of redundancies. We can’t afford to lose any more good skilled jobs. Struggling businesses will need more than a one-off job retention bonus to survive and save jobs in the long term.”
She said that in the chancellor’s summer statement on Wednesday, he should have announced targeted support for the hardest-hit sectors, including manufacturing and aviation, and done more to support the NHS and jobs across all public services.
O’Grady said Sunak’s £2bn “kickstart” scheme to create more jobs for young people was “a good first step” but warned: “If the government allows vital industries to go the wall, unemployment will surge and the recession will last far longer.
“The government should have announced extra investment in jobs across all public services – starting with filling the 200,000 vacancies in the NHS and social care.”
She criticised the chancellor’s scheme to give people 50% off dining out on Mondays to Wednesdays as a gift only to the privileged. “If the chancellor wants people to have the confidence to eat out, he should have announced a pay rise for hard-pressed key workers rather than dining out discounts for the well-off.
“Once again, this government fails to understand the real lives of low-paid workers. It is clear that poverty wages and insecure contracts are a public health hazard.”
Stephen Phipson, chief executive of Make UK, the manufacturing companies’ trade body, said industry would “applaud the chancellor’s bold intent” that would “spur rebuilding business confidence and healing the economy”.
“The emphasis on protecting jobs which already exist, whilst safeguarding and preparing young people with the skills for future jobs which may not yet have been invented, is a strategy that companies will fully support,” Phipson said. “In particular, the funding for apprenticeships is especially welcome and will help boost employers’ investment in their future workforce.
“This is not the beginning of the end of this crisis, however, but perhaps the end of the beginning as far as the economy is concerned. Moving forward, just as industry has shown how flexible and innovative it can be at a time of national need, then government will need to be equally flexible and innovative in dealing with the after-effects, which will undoubtedly require further action at some stage.”
Mike Cherry, chairman of the Federation of Small Businesses, welcomed the chancellor’s interventions, but warned that the job retention bonus – where employers will receive a £1,000 bonus for every furloughed worker they bring back and employ continuously through to January – must be easy to access in order to avoid mass unemployment.
“The chancellor is absolutely right to stress that the job of getting the economy back on its feet has only just begun,” Cherry said. “Will this set of measures be enough to spur activity over the coming weeks? That’s something that will need to be kept under close review. We may need further action before the autumn.
“The key now is making sure these positive new measures work for all, especially the small firms that make up 99% of our business community and employ 17 million people. The job retention bonus must be easy to access. We can’t have paperwork holding up this vital support.”
However, he said that “once again” the government had overlooked the newly self-employed and company directors who have “now been left without help for more than 100 days during this incredibly difficult period”.
The Institute for Employment Studies thinktank said that even taking into account the chancellor’s “comprehensive” measures to help workers and the economy, “the sad reality is … we will almost certainly see unemployment rising above 3 million in the coming year to levels that we have not seen since the 1980s”.