Rising debt, homelessness and poverty are predicted as official figures showed unemployment in Scotland rose to 120,000 between March and May as the impact of the coronavirus lockdown was felt.
Data from the Office for National Statistics (ONS) shows the unemployment rate for people aged over 16 rose to 4.3 per cent, a 0.6 per cent increase on the previous quarter.
The figures for the first three months of lockdown do not include nearly three quarters of a million Scots put on furlough so the increase is much lower than it might otherwise have been.
The headline unemployment rate for Scotland at 4.3 per cent was higher rise than the UK unemployment rate of 3.9 per cent.
Overall the number of UK workers on payrolls fell by 649,000 between March and June as the coronavirus crisis claimed another 74,000 jobs last month.
Nye Cominetti, of the Resolution Foundation thinktank said the next big test of the crisis is still to come as the furlough scheme that has supported over nine million jobs is phased out.
Scottish Economy Secretary Fiona Hyslop also warned the stats do not reflect the full picture of the labour market as the UK Treasury’s Job Retention Scheme paid the wages of many workers during lockdown.
Hyslop said: “The Job Retention Scheme will end in October but we believe the UK Government must extend the scheme, particularly for sectors that have been most affected by Covid-19, for example travel and tourism and hospitality, given that most of these sectors will not have fully recovered by October.”
She said the Scottish Government has committed a further £100 million for “employability and training support” to help anyone who has lost their job or is at risk of losing their job, as well as those looking for work.
Sara Willcocks from national poverty charity Turn2us, said: “It is now clear that we are heading for an intense period of high unemployment. Without intervention this will lead to mass personal debt, rising homelessness and increasing numbers of families going hungry.
She added: “We urge the DWP to increase social security spending, eliminate the five week wait for Universal Credit and ensure that benefit conditionality is flexible to claimant’s needs and opportunities in their area.”
