Labour’s Lord Alistair Darling and the Conservative Party’s George Osborne and Philip Hammond have warned that unemployment levels could match those seen in the 1980s without urgent action to limit job losses.
The three former Chancellors of the Exchequer told the Commons Treasury Committee that the 12% unemployment rate of the Thatcher years could be seen again after the pandemic.
“There will be loads of people in businesses that have gone bust that aren’t going to return, and people who are coming off furloughs into unemployment. That is going to be a big social challenge, and of course economic challenge, for this government,” Osborne said.
“Government needs to be planning,” Darling added. “Let’s just asume things are going to be worse – it’s better that it’s good and well – but don’t leave it too late because it does take a long tie to put these things in place.”
Current Chancellor Rishi Sunak is expected to announce new policies for economic recovery in July, but the Chancellors warned him to forego any austerity.
Philip Hammond said that “the debt as percentage of GDP is not the primary concern we should be addressing”.