View from Westminster: We must build back better to avoid mass unemployment, says Helen Hayes

(02 July, 2020)

'The scars of mass unemployment from the 1980s – particularly youth unemployment – are still remembered'

36601Helen Hayes, MP for Dulwich and West Norwood

I grew up in the north west in the 1980s and saw the city of Liverpool decimated by mass unemployment brought about as a result of the decisions of the then Tory government under Margaret Thatcher, writes Helen Hayes…

The scars of mass unemployment from the 1980s – particularly youth unemployment – are still remembered including in our local communities in Southwark and Lambeth. The impact on our communities was devastating and unacceptable.

The coronavirus lockdown has caused the largest recorded decrease in Gross Domestic Product (GDP), 20.4% in April and with it the looming threat of job losses.

For many people the Furlough Scheme and Self-Employment Income Support Scheme (SEISS) have been a lifeline, allowing the possibility that their employment could simply be restarted when the lockdown restrictions are lifted. The chancellor recently announced that from August employers who have furloughed staff will have to pay National Insurance contributions for these staff, and the SEISS will also come to an end. In September employers will then have to pay both National Insurance contributions and 10% of staff salaries, rising to 20% of salaries in October. At the end of October the furlough scheme will end and employers will have to pay the full cost of salaries and National Insurance contributions for every staff member.

Many local independent shops have started to reopen in the last two weeks, and it is good to see parts of our economy coming out of lockdown, and some aspects of life returning to normal. But for some industries, particularly hospitality and entertainment which employ thousands of people in London, it seems clear that reopening will take much longer, dependent partly on government restrictions, and partly on public confidence. I am very concerned that without ongoing government support for industries which will take longer to recover, many employers will begin to make staff who have been furloughed redundant, heralding a return to mass unemployment.

Labour is clear both locally and nationally that life must not just go back to the old normal. We are calling on the government to bring forward a ‘back to work budget’, which keeps job protection support in place for industries which will take longer to recover, and invests in a ‘green new deal’ to help create new jobs and transform our economy to tackle climate change. We must rebuild with more resilience, ensuring that everyone is paid at least the London Living Wage and an end to insecure zero hours contracts. We must build back better.

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