A third of Scots could end up unemployed because of coronavirus crisis

One in three Scots could be furloughed or unemployed as a result of the economic downturn due to the coronavirus lockdown a think tank has warned, prompting new calls for the introduction of a universal basic income.
One in three Scots could be furloughed or unemployed as a result of the economic downturn due to the coronavirus lockdown.One in three Scots could be furloughed or unemployed as a result of the economic downturn due to the coronavirus lockdown.
One in three Scots could be furloughed or unemployed as a result of the economic downturn due to the coronavirus lockdown.

The Institute for Public Policy Research (IPPR) in Scotland says up to 750,000 workers could be enrolled on the UK Government’s Jobs Retention Scheme during this quarter.

The hard-hitting analysis claims up to 150,000 people could lose their jobs, meaning 900,000 Scots in total could be furloughed or out of work, the equivalent of one-third of the total workforce.

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The report has added to calls for the UK government and Scottish Government to work together to introduce a universal basic income and comes after economic experts predict that the downturn in the UK economy during the second quarter of 2020 will be far deeper and more widespread than anything seen in living memory.

According to the IPPR, the accommodation and food services sector is predicted to fare the worst, with 140,000 staff furloughed and 30,000 job losses, the equivalent of 83 per cent of the entire sector.Retail, motor trades and wholesale are predicted to have 49 per cent of staff lose their jobs or be put on furlough while in construction, 69 per cent of the workforce could be affected, with 80,000 staff taking up the Job Retention Scheme and a further 20,000 out of work.

Yesterday the Scottish Government laid out options for easing lockdown restrictions, with a focus on the construction and retail sectors that could reopen early.

The analysis also looked into the financial security of staff in the worst-affected sectors before the lockdown measures were put in place and found that 29 per cent of those working in retail were “just about getting by” or worse before the pandemic hit, while 32 per cent of construction workers and 33 per cent of hospitality staff said the same.

Using Office of Budget Responsibility projections along with Scottish labour market data to estimate sectoral impacts, the report if the first to come from IPPR Scotland’s new Rethinking Social Security programme.Russell Gunson, the director of the IPPR, said: “The Covid-19 pandemic continues to be a public health crisis but without question it is an economic crisis, too. The pandemic is affecting us all but some people will undoubtedly be more affected than others by the economic impact of this crisis.

“Our initial analysis shows it’s likely to be those in lower pay sectors and those already struggling with their finances that will be hardest hit by the initial economic fallout.”

Mr Gunson called on the Scottish and UK governments to stretch their powers “to the limit” to help those being hit hardest by the pandemic. “We must do everything we can to support families in Scotland struggling to get by, through targeted help for those that need it the most,” he said.

Scottish Liberal Democrat leader Willie Rennie said the analysis showed how “urgent it is that UK and Scottish Governments work together now to forge a universal basic income that would provide support for everyone through this crisis.”

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He added: “These drastic numbers mean that financial support must continue for as long as companies are struggling because of the virus. There can be no cliff edge of support or people’s jobs will be thrown off the cliff.”

Scottish Labour employment spokesperson Rhoda Grant said: “This report confirms our worries that the economic impact of Covid-19 will be felt most by those already struggling to get by.

“It is vital that that the Scottish Government uses the powers it has to put money in families’ pockets at this time. We must also ensure that there is adequate support for workers for as the impact of coronavirus is being felt. If support is cut off when the lockdown is lifted, Scotland’s jobs, livelihoods and economy could be damaged beyond repair.”

And Scottish Greens co-leader Patrick Harvie said “the unprecedented nature” of the coronavirus crisis, had brought “uncertainty” for many.

He added: “We know that impact will be significant and as this report shows that has already led to a significant number of people being furloughed, with a reduced income, or laid off altogether, and that number is likely to increase.

“There must be an expectation that those businesses who have benefitted from government support employ fair work practices, so that their employees can see the benefit of that support.

“The case for the introduction of a universal basic income, ensuring that a basic level of support is available to everyone, has never been clearer, and could play a significant role in supporting people as we recover from the economic impact of this public health crisis.”

Nicola Sturgeon has admitted the pandemic has proved the “time has come” for a UBI, and has said there will be “constructive discussions” with the UK Government on the matter.

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The Scottish Government has run four pilot UBI schemes in different council areas but it is the UK Government that has the ultimate power in creating a national scheme.

The UK government has currently said it is not considering a UBI. The DWP has processed more than 1.5 million claims for universal credit since March 16.

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