UK Redundancies Are Rising Faster In The Covid-19 Pandemic Than In The 2008 Financial Crisis
3 min read
New figures have found that redundancy rates are rising at a faster rate as a result of the coronavirus pandemic than they did during the 2008-2009 financial crash.
Stark new analysis from the Office for National Statistics (ONS) has found the rate of job losses linked to the pandemic has already exceeded the highest rate seen during the financial crash with those working in the admin and support services industry hit the hardest.
The ONS's quarterly analysis of the labour market up to December 2020 found the UK's redundancy rate was has risen consistently since the beginning of the pandemic and is currently sitting at a record peak of 14.2 per thousand employees, compared to a maximum of 12.2 per thousand during the previous financial downturn.
But the ONS warned the economic impacts of the pandemic, which are higher than during 2008-2009, would continue "manifesting themselves in the economy".
"Policy measures introduced to contain the spread of the virus, such as public health restrictions and voluntary social distancing, have had pronounced impacts on the UK economy," they said.
"Major shocks to the economy, such as the coronavirus pandemic in 2020 and the recession between 2008 and 2009 have different causes and policy responses, but they have a common consequence: they cause the economy to contract and unemployment and redundancies to increase."
Meanwhile, the stats watchdog found a major rise in the number of companies who expected large redundancies of 20 or more employees, rising from 485 in March 2020 to 1,734 in September.
The ONS analysis found the highest rates of redundancy had been recorded in the administrative and support services industry with 35.8 per thousand employees, followed by those in the "other" category, which includes arts, entertainment and recreation, which had rates of 30.5 per thousand.
They also found that job losses were markedly higher among disabled people, with 21.1 per thousand being made redundant between July to November 2020, compared to 13.0 per thousand among non-disabled workers.
It comes after a recent report from The Resolution Foundation found that almost two million people have not been able to work for six months during the pandemic, including 700,000 who had been unemployed for at least six months.
The grim job figures come ahead of Rishi Sunak's planned Budget on 3 March where he is expected to announce fresh measures to shore up the economy.
But business chiefs have already called for a further extension of the furlough scheme beyond the proposed April end date and more financial support to avert further job cuts.
Speaking on Thursday, Adam Marshall, director general of the British Chambers of Commerce, said the Chancellor would be making a "huge mistake" if he chose to "pull the plug" on the support schemes too early.
And he warned that removing the support would be "akin to writing off the billions that have already been spent helping firms survive and preserving jobs".
He told the BBC's Today programme: "I liken this to a marathon. Businesses have been running it and they are in the 25th mile right now, they can see the finish line ahead.
"You want them to get over the finish line and then you want to get them an energy drink and a blanket to help them start to recover.
"That is why extending the scheme is so important. You don't want them falling within sight of the finish line."
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