The Institute for Employment Studies (IES) estimated that employment has fallen by around 1.5 to two million during the first month of the crisis. The loss is on top of people who have been furloughed under the Government’s scheme.
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And it is double the drop in employment during the last recession.
Unemployment has increased to at least 2.5 million, or 7.5 percent of the workforce.
The IES has urged the Government to set up a “Cobra for jobs” to deal with the impact of coronavirus on employment.
IES director Tony Wilson said: “We recommend that government brings together a ‘Cobra’ for jobs, to work together on designing, co-ordinating and mobilising this response, and convening a wide range of partners including government departments and agencies, local government, sector bodies, trusts and foundations and key stakeholders.
Up to two million Brits have already lost their jobs amid the coronavirus crisis (Image: GETTY)
“The proposals will help to ensure that as the economy recovers we can keep people attached to work, help them find better work, and minimise the ‘scars’ from being out of work.
“With a cost of around £4.7 billion over the next three years, the evidence from previous programmes tells us that this investment would more than pay for itself in the future, while the evidence from previous recessions tells us that the costs of inaction would be far higher.”
The IES added it could take years for the labour market to fully recover.
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The loss is on top of people who have been furloughed under the Government’s scheme (Image: PA)
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It comes as a think tank has said the Government’s plan to cover 80 percent of the salary of furloughed workers could cost up to £40billion in just three months.
The Resolution Foundation analysed new data from the British Chambers of Commerce (BCC) which showed that more businesses than first thought would furlough staff.
Torsten Bell, chief executive of the Resolution Foundation, said: “The cost of the scheme depends on firms’ take-up and the length of time workers need to be furloughed for.
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“But with recent surveys implying that at least a third of the private sector workforce could be paid through the scheme, it is likely to cost as much as £30 billion to £40 billion over three months.”
Mr Bell added that while it was expensive, the social cost of millions going unemployed without the Government guarantee would be “far, far greater”.
The BCC found that one fifth of companies who responded are now planning to furlough all their staff, up from 17 percent in the last survey.
And 37 percent of respondent said they will furlough between 75 percent and 100 percent of their workforce in the coming week.
Speaking on Wednesday, Chancellor Rishi Sunak said: “We have not put out a specific projection or an estimate of the take-up of that scheme.
“We did that so that people were not laid off, they were not unemployed, they had a good income to get them through this, and they remain attached to their company and their employer.
“If it ends up being significantly used I will view that as a success if it means that we get through this and then can bounce back quickly.”
It comes as there have been 65,077 confirmed cases of coronavirus in the UK, with the death toll at 7,978.