Britain’s shortage of lorry drivers and care staff is unlikely to be solved by furloughed workers being made redundant when the job protection scheme ends at the end of the month, according to a study by a leading thinktank.

A mismatch between the types of jobs that are no longer needed and the vacancies in industries facing a significant lack of skilled staff will persist into next year without government intervention, the Resolution Foundation said.

The warning came as truck companies said a national shortage of 500,000 lorry and van drivers could lead to a rise in food prices.

Business leaders from across the retail, wholesale and farming sectors have criticised the government’s response to supermarket shortages after an exodus of European Union drivers, which they said could not be replaced by domestic drivers in the short term.

The Federation of Wholesale Distributors, which represents about 600 firms in the wholesale sector, said businesses were offering incentives and higher wages that would need to be passed on to retailers.

Calls for the government to offer year-long visas to foreign truck drivers were rebuffed last month by the business minister, Kwasi Kwarteng. He told business leaders they needed to train and support domestic workers rather than call for sticking plaster solutions.

The Resolution Foundation report found that as many as 900,000 workers will still be on the furlough scheme when it ends on 30 September, most of them older workers or those under the age of 25. It said that while older workers may leave the job market altogether if they are made redundant and young workers may find alternative jobs, there was likely to be a rise in unemployment next month, possibly from the current 4.7% figure to as high as 5.5%.

“Age continues to be a significant factor,” the report said. “While under-25s have been the age group most likely to be on furlough for most of the crisis, 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.

“Older workers also suffer more severe consequences from losing their jobs than other age groups. Over-55s are less likely than younger workers to return to work within six months of becoming unemployed, and tend to take a substantial pay cut when they do return,” it added.

Tens of thousands of graduates are also expected to join the workforce in the autumn, many following a year-long delay while they continued with their education, putting additional pressure on the jobs market.

Hannah Slaughter, an economist at the foundation, said the government should also protect workers that cannot find a job by maintaining the current level of universal credit.

The chancellor, Rishi Sunak, plans to cut universal credit by £20 a week from next month. The £20 was introduced at the start of the pandemic, and its loss will affect the incomes of 6 million families and about half of all UK children.

“With firms already reporting hiring bottlenecks, even a fresh surge in job starts in unlikely to be enough to prevent unemployment rising this autumn,” Slaughter said.

“Given the uncertainty surrounding the labour market, 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.”


Source