Lord Forsyth warns the government of “sleepwalking into the unemployment crisis” and risks ruining the prospects of a generation of young people
- The ministers’ efforts to put the labor market back in order after months of Covid chaos are lagging behind the requirements
- “Time for a new deal” urges ministers to invest in job creation, recruiting more social workers and building up the childcare sector to “repair the UK’s social infrastructure”.
The government “sleeps in an unemployment crisis” and risks ruining the prospects of a generation of young people, Tory financier Lord Forsyth warned.
Ministers’ efforts to restore order to the labor market after months of chaos in Covid are falling short of what is needed, the influential peer added.
Today the House of Lords Economic Committee, which he chairs, released a report calling on the government to step up efforts to get Britain back on its feet.
Warning: Ministers’ efforts to put the labor market back in order after months of Covid chaos are lagging behind
“Time for a new deal” urges ministers to invest in job creation, recruiting more social workers and building up the childcare sector to “repair the UK’s social infrastructure”.
Lord Forsyth, a former JP Morgan UK vice chairman who served in John Major’s cabinet, said: “The government is in an unemployment crisis. This report seeks to save the prospects of a generation of young people.
“We believe the government is assuming the vaccine means the economy no longer needs support. We think this is wrong.
‘The job sectors that have historically led to a rebound in the labor market – hospitality, retail and leisure – have flattened out. They are likely to be in worse shape in the spring when wage support ends. Unemployment will rise. ‘
The warning will ring alarm bells for Chancellor Rishi Sunak.
In the face of a £ 2 trillion national debt heap, Sunak cut foreign aid spending and froze public sector wages. But Lord Forsyth said it was “a mistake to think about a cut before we recover”.
He added: “I think that was one of the big mistakes we made after the financial crisis. Mistakes happen, but if you repeat those mistakes it becomes unforgivable. ‘
The Lords Economic Affairs Committee, which includes Test and Trace boss Dido Harding and former BT managing director Lord Livingston, recommends priority for “green” projects such as cycle paths to make older buildings more environmentally friendly and to switch gas boilers to low-carbon alternatives.
Support programs like Kickstart, which pay companies to hire young interns, should be expanded. Companies should get bigger apprentice hiring grants, the report added.