Ex-Chancellors Warn UK to Face ’1980s-Level’ Unemployment in Wake of COVID-19 Pandemic

By Staff, Agencies

Three former UK chancellors issued a warning to the British government to gear up for 1980s unemployment levels amid the looming recession triggered by the coronavirus pandemic, The Guardian reported.

With job losses surging due to COVID-19 lockdowns, Lord Alistair Darling, George Osborne and Philip Hammond urged the British government efforts to offset the fallout for the population from the health crisis.

The UK Labor Party’s last chancellor Alistair Darling, who spearheaded the government’s response to the 2008 financial crisis, was cited as telling the Commons Treasury committee online:

“We need to get ourselves into the frame of mind where we’re thinking about 1980s levels of unemployment.”

According to Darling, the government urgently needed to be drawing up measures to aid those who have been left jobless, or help them retrain for new opportunities.

“Government needs to be planning. Let’s just assume things are going to be worse – it’s better that it’s good and well – but don’t leave it too late because it does take a long time to put these things in place,” he said.

Relatively, Darling’s Conservative successor at the Bank of England, George Osborne, warned of a massive level of unemployment likely to be brought about by the current economic consequences of the spreading coronavirus epidemic.

“There will be loads of people in businesses that have gone bust that aren’t going to return, and people who are coming off furloughs into unemployment. That is going to be a big social challenge, and of course economic challenge, for this government,” said Osborne.

Earlier, the Bank of England warned that the unemployment figures could potentially more than double from the current rate of 3.9 percent by the end of 2020, as a result of the COVID-19 pandemic and lockdown measures put in place to try and stop its spread.

In light of the reports, Darling and Hammond warned the chancellor of the dangers that a fresh round of austerity to tackle rising government borrowing could be fraught with.

According to the ex-chancellors, pro-growth policies were the only means of boosting a stronger economic recovery.

“In the recovery phase, the next two years, where the debt as percentage of GDP is not the primary concern we should be addressing,” suggested Philip Hammond, who served as chancellor under Prime Minister Theresa May.

The British government was not yet in a position to reopen the economy fully in light of the continuing health risks from the COVID-19 pandemic, believes Alistair Darling.

The UK government would need to either impose cuts or raise taxes after the coronavirus pandemic had subsided, said George Osborne, adding:

“Sadly we are poorer than we thought we were, and either we’re going to have to raise more in revenue or spend less than we were planning.”