One in six Britons are at risk of losing their jobs because of coronavirus, new report claims

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One in six Britons is at risk of losing their jobs because of coronavirus, new report claims

  • Report by New Economics Foundation said 5.6million workers could be jobless
  • Government introduced scheme worth £330billion to support furloughed staff 
  • Around 1.6million workers work in industries which have already been closed 
  • Learn more about how to help people impacted by COVID

By Harry Howard For Mailonline

Published: | Updated:

One in six Britons could lose their jobs amid the economic chaos caused by coronoavirus, a new report claims. 

It suggests that as many as 5.6million workers could be out of work, out of a workforce of 32million.

The Government has introduced a scheme worth £330billion to provide 80 per cent of the salaries of workers furloughed by employers.

But the new analysis, released by think tank the New Economics Foundation and reported by The Sun, pointed to four groups of workers who remain at risk.

One in six Britons could lose their jobs amid the economic chaos caused by coronoavirus, a new report claims

Three of them – those on fixed-term contracts, people on zero-hours contracts and part-timers who are not doing all the hours they want – may not qualify for the Government’s help if their employers decide to fire them. 

And the fourth group – the self-employed – will not get any financial help until June, by which time many businesses could already have folded.

Of the 5.6million workers referred to by the New Economics Foundation, around 1.6million already work in industries which have been closed – including restaurants and retail shops.

As a result, these workers face a high risk of losing their jobs.

The New Economics Foundation urged the Chancellor, Rishi Sunak, to create an even bigger safety net.

They suggested a £221-a-week guaranteed minimum income for all working-age adults. 

Head of economics Alfie Stirling told The Sun: ‘Despite the Government’s interventions to protect jobs and pay, millions could face the prospect of relying on benefits for the first time.

The report comes a week after former Bank of England official David Blanchflower suggested that unemployment caused by the coronavirus crisis could in months be worse than during the 1930s Great Depression

The report comes a week after former Bank of England official David Blanchflower suggested that unemployment caused by the coronavirus crisis could in months be worse than during the 1930s Great Depression 

‘But Universal Credit payments are insufficient to meet basic living costs. Having made welcome moves to prevent job losses, government must now turn to strengthening the UK’s safety net as well.

‘If not, we risk consigning millions to the poverty trap through no fault of their own — a trap that many may struggle to break out of.’ 

The report comes a week after former Bank of England official David Blanchflower suggested that unemployment caused by the coronavirus crisis could in months be worse than during the 1930s Great Depression.

What does it mean to be furloughed?

Essentially, if you’re being furloughed by your employer, it means you’re being sent home, but will still receive 80 per cent of your salary by the Government, up to a maximum of £2,500 a month.

This Government job retention scheme is only for employed people, it does not apply if you are self-employed.

However, you first need to agree to be put on furlough by your employer, who can then apply for the money to the Government. You cannot apply for it yourself.

Your employer can choose to pay the remaining 20 per cent of your wages, although it is not obliged to do so.

If you earn more than £2,500 a month, your employer can choose to ‘top up’ your salary, but again it is not forced to do so.

You will still continue to pay income tax and national insurance contributions while on furlough.

The Government advice says: ‘If you and your employer both agree, your employer might be able to keep you on the payroll if they’re unable to operate or have no work for you to do because of coronavirus. This is known as being “on furlough”.’

Mr Blanchflower, who was part of the Bank during the 2008 financial crisis, said unemployment is rising at the fastest rate in living memory as job losses mount around the world and in the UK. 

He warned that there has never been a ‘concentrated business collapse’ on the scale seen in recent weeks as the Government forced all non-essential firms to close. 

In the last two weeks of March, 10 million people in the US applied for unemployment benefits, while in the UK there were grim warnings of the jobless total hitting 2.75million by June.

During the Great Depression, unemployment hit 24.9 per cent in the US and 15.4 per cent in the UK, over several years. 

But Professor Blanchflower said unemployment in the UK could rapidly rise to more than 6million people – which is around 21 per cent of the entire workforce.