Covid: Almost two million in UK 'have not worked for six months'

Almost two million people have not worked for at least six months due to the economic impact of the pandemic, according to a report.

Those people affected were either unemployed or fully furloughed, the Resolution Foundation think tank said.

It is calling for the furlough scheme to remain in place for several months after lockdown restrictions are eased.

The Treasury said the government would continue to invest in protecting and creating jobs.

Employment concerns

The Resolution Foundation said that of the nearly two million people affected, the majority have been on full-time furlough or have gone from furlough to unemployment and back, while another 700,000 have been officially unemployed.

Among those workers currently employed, 8% either expect to lose their jobs in the next three months, or have been told that they will be made redundant, the think tank added.

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Nye Cominetti, senior economist at the Resolution Foundation, said: "While the UK's economic prospects are finally looking up, job insecurity remains high, particularly among those who have spent long periods not working, or who are currently furloughed."

The furlough scheme, which partially covers the wages of people placed on leave, has already been extended through to April.

The Resolution Foundation called on the government to keep the scheme in place for several months after public health restrictions have been lifted, giving employers time to recover and bring staff back.

It said support should be tailored to sectors of the economy which have been the hardest hit, such as hospitality.

A Treasury spokesperson said: "Throughout this crisis, we have done all we can to support jobs and livelihoods, spending over £280bhn in response to the pandemic."

"We will continue to invest in protecting and creating jobs through the remainder of the pandemic and through the recovery, and we will set out further details via the next stage of our plan for jobs at the upcoming Budget."

More company failures to come?

The Resolution Foundation's recommendation echoes calls made earlier this week by the Institute for Fiscal Studies (IFS) and Citi Research.

The IFS warned that lower-income households faced a higher risk of unemployment this year, as "deferred" company failures take place after the furlough scheme ends.

It said that it was vital to ensure that the furlough scheme and other government support was unwound gently, rather than coming to an abrupt halt.

However, IFS and Citi also said that the economy would not be able to adjust properly as long as the furlough scheme is still in place.