The number of redundancies made in the UK workforce rose at the fastest rate on record in the three months to August, official figures from the Office for National Statistics (ONS) have revealed.
Almost a quarter of a milion workers – 227,000 – were laid off, nearly double the number who were made redundant in the previous three months (114,000), leaving a total of 1.5 million people out of work.
As a result, the unemployment rate rocketed more quickly than it has in over a decade to 4.5% from 4.1%.
The worst hit segments of society were people aged between 16 and 24 years old, who made up 60% of the fall in employment in 2020, self-employed men, and women in part-time jobs.
Employers’ organisation, The Institute of Directors (IoD), laid the blame at the Chancellor’s door, after the newly announced Job Support Scheme was widely criticised by businesses and unions alike.
“With the furlough scheme unwinding, cash-strapped firms have been forced into difficult decisions about retaining their staff,” Tej Parikh, Chief Economist at the IoD said. “The job support scheme may need to be beefed up if the government wants to avert further rises in unemployment.”
Unions agreed, urging the government to reconsider its plans to cut job retention support at the end of the month.
“We are on the precipice of an unemployment crisis,” Frances O’Grady, General Secretary of the TUC, said.
“Wage replacement should be 80% for businesses who have to shut. We need a more generous short-time working scheme for firms which aren’t required to close but will be hit by stricter local restrictions. And self-employed people in local lockdown areas need help too.”
But the government should not just focus on helping industry to survive, it can use this time to ensure that the economy can grow and become resilient to future challenges, she added.
“Ministers must do more to create good new jobs,” O’Grady explained. “TUC research shows that we could create 1.2 million new jobs in the next two years in green transport and infrastructure, and another 600,000 by unlocking public sector vacancies.”