Employment

Concorde obviously. The Iraq War perhaps? Or Scottish devolution? It is not hard to come up with a list of really terrible ideas that the British government has wasted money on over the last 50 years. Even so, and despite some tough competition, we now have a fresh contender. It looks as if the furlough scheme will top them all. The scheme ends today, with roughly a million people still collecting a slice of their wages from the Treasury. The total bill is set to come in at around £70 billion. To put that in context, for the same money we could have tripled spending on policing and just about eliminated crime. Or we could have suspended student loans for four years and made university free again.

The pandemic continues to cause surprising events in the labour market — and challenges too, many of which were wholly unanticipated when the Covid crisis began. Today’s update from the Office for National Statistics on labour market numbers is case-in-point: the unemployment rate again, down to 4.6 per cent from May to July. Forecasts of nearly 12 per cent unemployment, once predicted by the Office for Budget Responsibility, are long in the past. The furlough scheme has starved off an unemployment surge and there’s good reason to think it’s been avoided altogether. Over one and a half million people were still on furlough at the end of July.

This is getting serious. Never mind global shortages of microchips, plastics, copper and container ships; now we’re running out of pigs in blankets. The British Meat Processing Association says its members are so understaffed that annual production of 40 million packs of this popular pork item for the Christmas market is under threat. The British public have so far stoically accepted occasional empty supermarket shelves as a pandemic knock-on, to be blamed in part on necessary pinging of key workers and delivery drivers and in part on neighbours’ stockpiling, rather than on systemic government cock-up. But if the succulent sausage-in-bacon delicacy is nowhere to be found, trouble will surely follow.

Millions of workers are 'never quite switching off' and are answering emails out of hours, warns Autonomy, a think tank. It suggests that the 1996 Employment Rights Act should be amended to give employees a legal 'right to disconnect'. Unfortunately for Autonomy, Labour’s new deal for workers, outlined last month, somewhat stole its thunder. Spearheaded by deputy leader Angela Rayner, the party’s radical package of labour market reforms includes a default right to flexible working, new worker status for those in the gig economy and, of course, a French-style law barring employers from contacting workers outside strictly regulated hours. Nonetheless, Autonomy’s suggestion has received fawning coverage.

Here’s a patriotic proposal: let’s form a Dad’s Army of lorry drivers, of which the Road Haulage Association reckons there’s currently a 100,000 shortage. Daily headlines tell us this is causing supply disruptions that have led to reduced factory output and half-empty supermarket shelves, slowing recovery and contributing to the blip in inflation. We need Walmington-on-Sea’s trusty platoon at the wheel to compensate for the million-plus exodus of foreign-born workers that has afflicted the economy from hospitality (see this week’s last item) to fruit farms, slaughterhouses and construction sites — compounded in haulage by delays to thousands of HGV tests for new applicants last year.

Alongside the UK’s latest step in reopening, optimistic forecasts have been rolling in concerning the economy’s timeline for returning to pre-pandemic levels. This morning, we got another positive indication that businesses are resuming normal operations. The latest update on furlough figures shows 1.9 million workers are still on the scheme as of the end of June — the lowest level of people having their wages paid by the state since furlough was first introduced during last year’s spring lockdown. The number of people on the scheme fell by half a million last month, and by roughly three million since March. The continued fall is hardly surprising, as each month since April more economic activity has been permitted.

The world of coronomics continues to surprise us. Last summer forecasters warned of a wave of redundancies after the biggest economic crash in 300 years. Peak unemployment — spurred on by lockdowns — was expected to near 12 per cent, ushering in a new era of chronic financial pain and instability for millions of workers. But the Treasury’s furlough scheme has kept the headline figure down. Unemployment has hovered around 5 per cent, less than half the original prediction. The problem this summer isn’t mass unemployment but worker absenteeism. Job vacancies are now more than a third above pre-pandemic levels. There is no shortage of available work, only a shortage of those willing to do it. At the last count, 2.

Are the world’s hardest workers about to get a well-earned break? That seems to be the hope of the Japanese government, which is trying to encourage companies to ease off a bit and allow their exhausted staff the luxury of a four-day working week. It is hoped this will lead to a healthier work-life balance — or at least give workers a chance to retrain. As an idea, it sounds great. Whether it will actually work is another matter entirely. In January, the ruling (always and forever) Liberal Democratic party drafted a proposal that firms should offer staff the option of a three-day weekend.

The ONS recorded a sharp recovery in economic growth in March. The Bank of England has already increased its forecast for the growth of the UK economy in 2021. Now comes more evidence of rapid growth. The quarterly CIPD/Adecco Labour Market Outlook, published today, shows a sharp rise in the number of organisations that are hiring extra staff or are expecting to do so over the next few months. The survey, which goes out to 1,000 employers in the private, public, and voluntary sectors, found that 36 per cent of employers are planning to increase staff levels over the next three months. Nine per cent said they are expecting to shrink staff levels, 50 per cent will keep numbers the same and 6 per cent don’t know.