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LOWER-INCOME households are at greater risk of unemployment this year as the furlough scheme ends and delayed company failures kick in, experts said today.
Their warning came as workers in precarious employment launched a campaign for an immediate and indefinite extension to income support schemes to avoid further job losses.
During the pandemic, low-paid workers have been forced to use savings to cover expenses while higher earners have built up an extra £125 billion while being stuck at home.
Ahead of next month’s Budget, the Institute for Fiscal Studies (IFS) and Citi Research said it was vital that income support schemes, including those for self-employed workers, were unwound gradually rather than abruptly ended on April 30.
Support should be “phased out as soon as conditions allow,” the researchers said, but the £20-per-week increase to universal credit (UC) could be maintained.
IFS director Paul Johnson said the economy would not be able to adjust properly until furlough had ended, but warned that Chancellor Rishi Sunak’s priority should be to “secure the recovery” from a succession of lockdowns — not fixing the public finances.
“In the recovery phase [Mr Sunak] needs to support jobs and investment, but also crucially needs to recognise and address the multiple inequalities exacerbated by the crisis,” he said.
Keeping the UC increase would cost about £6.5 billion in the long term — but removing it could slash some people’s incomes by a fifth, the IFS warned.
It came as the Independent Workers’ Union of Great Britain (IWGB) launched its #FairFurloughNow campaign, calling on the government to break the “cycle of uncertainty” caused by late extensions to government support.
The initiative, already supported by 30 MPs, including Labour’s Nadia Whittome, is also calling for furlough to be properly enforced — with bosses still asking workers in non-essential roles to attend workplaces despite the health risks.
IWGB president Alex Marshall said: “The government’s failure to enforce and extend furlough isn’t just costing jobs and destroying lives — it’s putting public health at risk.
“We’re dealing with yet another tidal wave of cases relating to mass redundancies and the unjustifiable denial of furlough by companies who can certainly afford it.
“And yet again, of course, it is precarious BAME [black, Asian and minority ethnic] and migrant workers who are being hardest hit.”
The TUC, which has also called for an immediate furlough extension, pointed out that the two largest rises in unemployment in 2020 occurred in months when government job support was reduced or expected to end.
In July 2020, when the initial job-retention scheme ended and a less generous replacement was introduced, unemployment rose by 17 per cent.
There was another rise as the latest scheme’s proposed end date of October 31 approached, before it was finally extended into this year on November 5.
And after the government’s announcement that an extra 1.7 million people in England are being asked to shield indoors, the TUC added that those affected “must not lose their jobs and livelihoods overnight.”
“Ministers must publicise the option to furlough new shielders, and should consider introducing a right to be furloughed for all those who are required to shield,” general secretary Frances O’Grady said.
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