The warning comes from a new report by the House of Lords Economic Affairs Committee, published today [14 December]. The 132-page report ‘Employment and Covid-19: time for a new deal’ takes the government to task for “sleepwalking into an unemployment crisis”.

“It must focus on creating job opportunities for people who are most at risk of unemployment in sectors which need workers urgently and that are sustainable… creating jobs to repair the UK’s ‘social infrastructure’, the urgency of which has been exposed during the Covid-19 pandemic, by increasing the number of social care workers and investing in the childcare sector.”

It also goes on to say: “It means prioritising sustainable infrastructure projects that can be delivered at scale, quickly and across the whole of the UK.” The report suggests that green projects – such as investing in parks and green spaces, retrofitting buildings and switching gas boilers to low-carbon alternatives – should be prioritised.

The report further urges the government to introduce a new job, skills and training guarantee, available to every young person not in full-time education and employment for one year. In addition, the Department for Work and Pensions should include a greater emphasis on skills profiling in its employment support offer.

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

Key findings and conclusions from the report include:

• The Covid-19 pandemic’s economic impact – the largest economic shock in 300 years – has not been shared equally. The government needs to recognise this in plans for the recovery.
• A significant proportion of the debt from the Covid-19 loan schemes will never be repaid. The government should create a new state entity to manage debt and repayments, along the lines of the UK Recovery Corporation proposed by TheCityUK, and loans should be converted into more manageable obligations such as contingent tax liabilities or ‘student loan-type’ structures.
• 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.
• The cost of providing adequate sick leave to quarantined workers is small in comparison to the cost of them not isolating and spreading the virus further. The government should raise the level of statutory sick pay and expand eligibility to the lowest paid.

The committee report also advises government that health and economic policy need to be designed in tandem.
The full report can be accessed here.

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