Coronavirus lockdown: The longterm effect on the UK economy – BBC Newsnight

published on July 19, 2020

the UK hasn't had to cope with unemployment above 10 percent for long since perms and shoulder pads were in fashion but joblessness unlike the outfits is making a comeback after the jobs crises in the 80s and 90s the UK

Unemployment rate had been on a downward trend for years falling to multi-decade lows the OVR in their covert economic scenario suggested it could jump to 10 percent in the second quarter of this year but they

Also assumed economic recovery would be Swift with about a quarter of the rise reversed by the end of the year look set to bounce back consumers and businesses are struggling and we know that six point three million jobs are now covered

By the government's furlough scheme the risk is that some of those workers ultimately find themselves laid off keeping unemployment high we know that many come from sectors like travel or hospitality that will struggle to get

Back to work and we know that they tend to be younger they're more likely to be women and to be in lower paying roles for a government elected on a promise of boosting the economy in weaker regions it presents a different economic problem

If you have two big objectives when we do all the things in your manifesto to get the job market working again the way it was seemingly working in January and it's the last one that's been going to be the top priority absolutely no doubt

Because you've got to understand the Treasury reversed its normally economic rules for a couple of months it stopped trying to pay people to go into its what the welfare system kind of does now and start paying people not to and reversing

Out of us is an incredibly difficult challenge to compare to that these long term agendas about infrastructure and leveling up and so they'll still be there in the rhetoric they'll still be there pay attention to because they're

In the manifesto but number one will be making that job market work again like it was the government has repeatedly pledged to do whatever it takes but that may involve keeping up its active role in the labor market for a

Much longer period the furlough scheme will need to be wound down gradually especially in certain sectors then quick measures to help job seekers and for those past downturns tell us will be hardest hit like the young efforts to

Avoid what economists call scarring where the negative effects of high unemployment persist for many years to come do is look back at the successes and challenges of past job guarantee programs so things like the Future Jobs

Fund which actually offered a temporary job but it was a paid job and to young people during the financial crisis it's really important to get people's foot in the door so get them a job allow them to build up their skills allow them to

Build up their confidence I'm equally allowed them to make some money and from a government point of view that's actually why it's really important because a young person working and developing their skills as a young

Person who's not on benefits deeply as a young person who probably will be working for far longer and far more consistently despite the prospect of a smaller economy and larger deficits pushing debt

Higher the government still has one eye on its longer-term agenda a commitment to infrastructure investment remains undimmed coronavirus will not stop our mission to level up to unite and to unleash the potential of this country

And infrastructure projects while not immediate can help with job creation in the medium-term is a traditional call I think from economists to say she in periods when the economy is doing badly infrastructure investment is a good

Thing in general governments have done the reverse has to be said if you look back at 2010 if you look back indeed to the early 1990s infrastructure investments cut very very sharply because it's actually an easy thing to

Cut if you're looking to balance the books it just but it may not be a terribly wise thing to cut since the 1980s the uk's public spending on infrastructure has been lower than

Oacd peers ramping up that spending with the public finances for now taking the strain maybe one plan to avoid other unfortunate historical comparisons

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