Lords call for action to prevent New Year spike in unemployment

A cross-party group of peers has urged the government to focus on creating new jobs, if it is to prevent a rise in unemployment next year.

A report out today (14 December) by the House of Lords’ economic affairs committee calls on ministers to introduce a new job, skills and training guarantee, available to every young person not in full-time education or employment for one year.

It also urges the government to enhance its existing skills, training and employment support policies, including the Kickstart and the Restart programmes which need to be better co-ordinated if they are to be successful.

The report also warns the economic impact of the Covid-19 pandemic has not been shared equally.

Many higher paid workers experienced little or no economic hardship, whereas the youngest and lowest paid workers have experienced significant damage to their livelihoods and prospects, according to the report

It also argues the temporary increases to Universal Credit should be made permanent, including the £20 per week increase to the Standard Allowance.

The government should also ensure that those on legacy benefits receive a comparable uplift, review the level of the benefit cap and increase the generosity of social security for struggling families, according to the committee.

‘The government has given the impression that the economic crisis will be short-lived and everything will be fine by the spring,’ said committee chair, Lord Forsyth of Drumlean.

‘It also assumes that the good news on the vaccine means that the economy and labour market will no longer need support. Both of these assumptions are wrong.

‘The sectors with jobs that historically lead labour market recoveries – hospitality, retail and leisure – have been flattened. They are likely to be in a worse state in the spring when wage support ends. Unemployment will spike.

‘The government is sleepwalking into an unemployment crisis. The chancellor needs to get ahead of the curve to avoid being in the same position as he was in the autumn. He needs a strategy urgently for what comes next and this report sets out a comprehensive plan to save the prospects of a generation of young people.’

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