Great Britain

UK should prepare for unemployment levels not seen since 1980s, former chancellors warn

The Government must be prepared for unemployment levels to hit highs not seen in the UK since the 1980s, according to two former chancellors.

Lord Darling of Roulanish and George Osborne also called on ministers to ensure more structures to help the unemployed are in place.

Alistair Darling, who was Labour chancellor under Gordon Brown during the 2008 financial crisis, said: "We need to get ourselves into the frame of mind where we're thinking of 1980s levels of unemployment.

Download the new Independent Premium app

Sharing the full story, not just the headlines

"If it doesn't happen, that's great but I think we need to be ready for that and if we're not people will ask why."

Answering questions on comparisons between the financial crisis and the coronavirus pandemic from the Treasury Select Committee, Mr Osborne said: "We didn't really have to deal with mass unemployment. We never faced the structural unemployment that we saw in the 1980s."

He added that the Government must make sure unemployed workers do not end up on long-term benefits.

The former Tory chancellor explained: "Governments of all colours since the Second World War have not done terribly well at getting structurally unemployed people back into work."

The pair were giving evidence alongside former Tory chancellor Philip Hammond, who said there were too many uncertainties to know how quickly and successfully the economy can recover.

He said: "A lot is going to depend whether over the next months it is clear that we are heading towards a vaccine or treatment for this disease and returning the economy to something like normal, or, by contrast, that we're not heading towards an early vaccine or a treatment and we have to plan, in terms of restarting the economy living with Covid - restructuring our businesses so they can operate in a sub-optimal way so they can operate with the disease."

All three said the Government should not concern itself with the high levels of debt the UK is wracking up in the short term, avoid tax rises and consider tax cuts either through a VAT reduction or national insurance payments.

Mr Hammond said there was "no economic logic to increasing taxes in the short term".

The trio also discussed interventions, welcoming the furlough scheme but warning it would need to be extended in some form.

Experts worry that many of the 8.7 million people who have been placed on furlough might lose their jobs when the scheme starts winding down and is ended.

The government currently promises to cover 80% of the salaries of furloughed workers.

PA

Football news:

Ocampos did everything for the victory of Sevilla: first he scored, and then he put on a goalie's Jersey and in the 101st minute dragged the kick of the goalkeeper Eibar
Pizarro finished his career as a player. Werder's players cradled him in their arms after the match
Aitor Karanka: When Real Madrid wins, they always talk about the referees
Gendusa two weeks training with Arsenal according to the decision of Arteta. Londoners can sell it
Alexander Elagin: if you Want to live a man with a man, a woman with a woman-live! But don't involve children
Pizarro finished. He came to Werder 4 times and became a legend here
Lloris about the fight with Son: It's part of football. Sometimes this happens