The pandemic has had a significant impact on the UK. According to official statistics, so far 140,062 people have died and 4,190,000 cases have been recorded across the country. To check the spread of the COVID-19 virus, lockdowns have been an effective means for governments throughout the world. However, lockdowns have curtailed economic activity, which has had a significant impact on economic growth. The UK has tacked the same problem. The first national lockdown in the UK was announced in March 2020, the second in November 2020, and the third in January 2021. Depending on the number of COVID-19 cases in different areas, varying levels of restrictions have been imposed in different parts of the country. The situation has become especially tense since December 2020, when a new COVIDvariantin London led to the second wave of the pandemic. These developments have affected the economic growth, consequently, the rate of employment in the country has remarkably fallen.
Currently, the unemployment rate in the UK is the highest in the last five years. According to the official reports of government’s Office for National Statistics, the unemployment rate rose to 5.1 percent in the last three months of 2020. As BBC states, there were 726,000 fewer people on company payrolls compared to pre-COVID levels. The unemployment rate has consistently fallen through 2020, as from September to November 2020, the rate was estimated at 5 percent —1.2 percent points higher than 2019 and 0.6 percent higher than the last quarter. Moreover, the impact of unemployment has been particularly felt by the younger generation, as about three-fifths of those unemployed are younger than 25 years. The London labour market has been hit harder than the rest of the country. Studies point out that compared to 2019, there were around 200,000 lesser employees on London payrolls in 2020.
To combat the situation, the government has taken many steps. The furlough scheme is the most important among them. Under the scheme, those who had been working at restaurants, hotels, bars, retail outlets, and other similar businesses that have been shut because of the pandemic, would not lose their jobs. Instead, the staff would be furloughed, as these businesses would get a Coronavirus Job Retention Scheme grant from the government. Owing to the grant the employees would receive at least 80 percent of their salary. Consequently, such employees would not be counted as unemployed and would resume work when the businesses reopen. Estimates show that so far about 10 million workers and 1.2 million companies have benefited from the furlough scheme. Currently, the rate of those receiving the benefits of the scheme in the UK is 14.2 per thousand, hinting at the dismal situation and growing strain on the government. The situation however is expected to change in the second quarter of 2021 as the CIPD reports assets.