A Covid jobs crisis is on the way. If you have shares in Rishi Sunak, sell them now | Aditya Chakrabortty


For a hint of what the near future of this country holds, talk to Emily Pringle. At the end of June, she advertised a job with her home-fragrance firm, Notes of Northumberland. Based in pretty Alnwick, with lovely colleagues – 16 hours a week, working mainly in the shop. Pringle might ordinarily expect 40-odd CVs. This time, she was deluged: within a fortnight, almost 600 people applied.

Many lived more than 30 miles away, in Newcastle. Most were vastly overqualified, and a good number had PhDs. All were now fighting for part-time work in retail. “It made me sad,” Pringle tells me. “That’s not why they spent so long studying. But it says a lot about the state of the jobs market.”

Look around and these stories are unfolding all over Covid UK. A Manchester restaurant wants a receptionist: over the next 24 hours, almost 1,000 people write in. A south London pub seeks two bar staff: 500 candidates step forward.

Shocking numbers, for now. But by Christmas such vignettes will be piled higher than the snow because, if the official projections are correct, the UK faces a jobs crisis the likes of which it hasn’t confronted for two generations. The Office for Budget Responsibility (OBR) forecasts that this winter unemployment will rocket to levels last seen in the early 1980s under Margaret Thatcher, with nearly one in eight workers unemployed. Thought you’d been hurt badly by the banking crash of 2008? Just wait.

Here is the ultimate implication of the OBR’s analysis: if you are under 50, chances are you will never have been in a labour market as tough as the one that lies just ahead. The face of the 1980s recession was The Full Monty: male, middle-aged and on the scrapheap, alongside his heavy industrial employer. The face of the 2020 depression is more likely to be young, female and just let go from a restaurant – but in the early surge it will include a lot of people, from every walk of life.

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Once the summer lull is over, an earthquake will shake Britain. Its early tremors can be felt already, as unemployment rises, yet few in the political classes have paused to consider the havoc it will wreak, let alone what might seriously be done about it. If anything, the government is helping to bring on the jobless crisis. This week, the chancellor, Rishi Sunak, has begun cutting the subsidy he gives employers to keep workers on the payroll. That scheme has helped protect 9.5 million jobs and its gradual withdrawal will immediately mean more P45s being handed out. Not that you’ll hear much about it: Sunak prefers doing photo-ops to publicise his scheme to give voters half-price Happy Meals.

The government that had to be shamed into finding £120m to feed hungry kids over the school holidays happily chucks four times that – half a billion pounds – on a 13-day gimmick. Priorities, eh? Yet Sunak’s reward is ever more newspaper profiles. Last Saturday the Times magazine embellished its portrait of the chancellor with a Photoshopped halo.

Any pundits with stocks in the chancellor should cash them in now, because from this sunlit peak his standing can only fall. After doing many of the right things in March to save jobs, Sunak has done precious little since. The result will be to waste much of the £200bn he has spent to keep businesses and workers afloat.

The Treasury fully shuts its job retention scheme entirely at the end of October. Firms will be offered a small bonus to hold on to staff, but many will make redundancies. At that point, temporarily-idled employees who have been drawing 80% of their wages will crash through a trapdoor into the harsh world of unemployment benefits.

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David Cameron’s government spent much of the past decade deliberately shredding the social safety net. “This is not an easy life any more, chum,” boasted welfare secretary Iain Duncan Smith in 2012. He and his chums helped ensure the UK went into the current crisis with one of the meanest employment safety nets in the industrialised world. And while Sunak has raised some benefits, they remain abysmally low.

What awaits those unlucky millions who go from being “strivers”, as George Osborne called them, to “skivers”? A massive shock. Early surveys by the Resolution Foundation show that of those starting to claim universal credit since the lockdown, one in three are already falling behind on bills. Later this month, landlords will be allowed to evict tenants who can’t pay their rent, and mortgage lenders will again be able to repossess homes.

Imagine what this adds up to: a graduate a couple of years out of university loses her job, then her rented flat then, if lucky, ends up back at her parents’ with a mountain of debt. To keep up on the mortgage, a family goes from shopping at Sainsbury’s to queueing at the food bank. And the part-time lecturer with a PhD has no option but to try for that job selling scented candles.

Across the country, people who believed they’d done the right things and thought they were secure will find they don’t get the right outcome. People who trusted a government, a state, to look after them will learn differently. Those parts of the country that last December went blue may not flip back to Labour – they may instead switch to Nigel Farage, who has been busking hard over this pandemic. And as economist Paul Gregg observes, when the dust clears, those who will ultimately be hit the hardest will be the young, those from deprived areas, and especially minority ethnic people.

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In her just-completed book, Abusing Power, journalist Kate Belgrave documents the toll the welfare state takes on those who need it most. She records how Paul, battling in his filthy caravan to keep himself presentable, is told by a housing officer, “You’re too well-dressed to be homeless”, while jobcentre staff interrogate Marsha, who has mental health problems, about her childhood abuse. The government suspended much of this bullying early in the pandemic, but soon enough it will restart.

The welfare system has been reconfigured to punish Other People, not to help People Like Us. It is not fit for an era of mass unemployment. But neither is much else about polarised, privatised Britain during this pandemic. An economy addicted to consumerism looks useless at this point – when the last thing anyone wants is cafes, hotels and consumer services. The low-paid precarious jobs fostered by Tory ministers over the past decade will be among the first to go in this depression.

Over the crises of the past 40 years, the political class has always offered a better tomorrow. Thatcher responded to industrial decline with a services revolution and a credit boom. Tony Blair promised a knowledge economy. Cameron urged us on in the global race. For all his bombast and bluster, Boris Johnson can’t point to any sunlit upland just ahead. This time, there’s just a dead end.

Aditya Chakrabortty is a Guardian columnist



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