A mismatch between the skillsets of those needed and those losing jobs in the UK will continue unless the Government steps in after the furlough scheme ends, says the Resolution Foundation.
According to a study by the leading thinktank, the UK’s shortage of lorry drivers and care staff is unlikely to be resolved by furloughed workers being made redundant when the job protection scheme ends at the end of the month.
The Resolution Foundation has said the mismatch between the types of jobs no longer needed and the vacancies in industries facing a substantial lack of skilled staff will persist into next year without government intervention.
The warning came as UK haulage companies forecast a national shortage of 500,000 lorry and van drivers that could lead to a rise in food prices.
Business leaders from the retail, wholesale and farming sectors have criticised the Government’s response to supermarket shortages following the exodus of EU drivers, whom they said could not be replaced by domestic drivers in the short term.
The Federation of Wholesale Distributors, representing around 600 firms in the wholesale sector, said businesses were offering higher wages and incentives that would have to be passed on to retailers.
Calls for the Government to offer year-long visas to foreign lorry drivers were rejected last month by the business minister, Kwasi Kwarteng. He told business leaders rather than call for ‘sticking plaster solutions’, they should train and support domestic workers.
Older workers most disadvantaged by furlough
The foundation report found as many as 900,000 workers will still be on furlough when the scheme ends on 30 September, the majority older workers or those under the age of 25. While older workers may leave the job market altogether if they are made redundant and young workers may find alternative employment, there is likely to be an increase in unemployment next month, possibly from the current figure of 4.7pc to as much as 5.5pc.
The report said age continues to be a significant factor. While the under-25s have been the age group most likely to be on furlough for most of the crisis, the over-65s have recently become the group with the highest furlough rates, and most likely to have been furloughed for long periods of time, putting them at higher risk of job losses when the scheme ends.
The foundation added that older workers also suffer more critical consequences from losing their jobs than other age groups. The over-55s are less likely than younger workers to return to work within six months of becoming unemployed, and tend to take a significant pay cut when they do return.
In addition, tens of thousands of graduates are expected to join the workforce in the autumn, with many arriving after a year-long delay while they completed their education, contibuting to added pressure on the jobs market.
Chancellor should maintain current level of UC
Hannah Slaughter, an economist at the foundation, said the Government should protect workers unable to find a job by maintaining the current level of universal credit (UC).
Chancellor Rishi Sunak plans to cut UC by £20 per week from next month. The £20 was introduced at the start of the pandemic and its loss will affect the incomes of around six million families and about half of all UK children.
Slaughter said as firms are already reporting bottlenecks, even a fresh boost in job starts is unlikely to be sufficient to prevent unemployment rising this autumn.
Given the uncertainty surrounding the labour market, she said, the chancellor should maintain the £20 uplift to universal credit. Cutting support while unemployment is rising is bad politics, bad economics and bad for living standards.