Lords warn government ‘sleepwalking’ into unemployment crisis

The chair of the House of Lords’ economic affairs committee has warned the government is ‘sleepwalking into unemployment crisis’.

In a letter to chancellor Rishi Sunak, Lord Forsyth of Drumlean express his disappointment at the Treasury’s failure to engage seriously with the committee’s recent report, Employment and COVID-19: time for a new deal.

The report, which was published in December, urged the government to focus on creating new jobs.

In particular, it called 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.

The letter comes as the chancellor prepares to deliver his next Budget later this week (3 March).

‘After a lengthy inquiry, our cross-party, evidence-based report set out a blueprint for a new economic plan for an investment-led recovery,’ said Lord Forsyth.

‘We set out a substantial body of evidence on the urgent need for the government to devise a strategy to shift public spending away from job protection and towards job creation.

‘The Treasury’s response to our report, which largely contains last year’s recycled policy announcements, does nothing to allay our fear that the government is sleepwalking into an unemployment crisis,’ he added.

Appearing on BBC1’s Andrew Marr Show at the weekend, Mr Sunak said the ‘key thing is right now to keep supporting the economy’.