Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent estimate he has made of the potential impact of the end of the Coronavirus Job Retention Scheme on the number of jobs that will be retained.

The Coronavirus Job Retention Scheme was designed as a temporary, economy-wide measure to support businesses while widespread restrictions were in place. Providing support to the end of September strikes the right balance between continuing to support the economy as it opens up and ensuring incentives are in place to get people back to work as demand returns.

This approach has worked; at the start of this crisis, unemployment was expected to reach 12 per cent or more. It is now expected to peak at about half of that level. That means almost 2 million fewer people out of work than previously feared. The Bank of England’s Monetary Policy Report (MPR) forecasts that the unemployment rate will on average be around 4.7% across Q3 and Q4, a downwards revision from the May MPR which projected unemployment to peak at 5.4% in Q3 and below the OBR Spring forecast (6.5% in the final quarter of 2021).

Moreover, the labour market is recovering rapidly with reopening of the economy in line with the roadmap. Flash HMRC PAYE data for July showed the number of paid employees increased for the eighth consecutive month. The unemployment rate stood at 4.7% in the 3 months to June 2021, down from a peak of 5.2% in the 3 months to December 2020.

Vacancies in the three months to July 2021 continued to rise, reaching record levels and are now up 18% (rising by 142,000 to 953,000) on the three months to February 2020.

In order to support people into work, as part of its comprehensive Plan for Jobs, the Government has announced the £2 billion Kickstart scheme which will create hundreds of thousands of new, fully subsidised jobs for young people, and the new three year Restart programme, which will provide intensive and tailored support to over one million unemployed Universal Credit claimants across England and Wales and help them find work.