Ministers are secretly preparing for four million people to join the ranks of the unemployed because of the economic effects of the coronavirus pandemic.
Therese Coffey, the Secretary of State for Work and Pensions, said her department was preparing to support that level of unemployed people but stressed that she "genuinely hopes" Britain does not reach that figure.
The prospect of four million unemployed far outstrips the three million unemployment rate last seen in the 1980s.
Ms Coffey said her department is preparing for unemployment to reach "a similar" to the forecast by the Office of Budget Responsibility (OBR). In July, it predicted the unemployment rate could hit 13.2 per cent – equivalent to four million people – by early next year in its most pessimistic forecast.
Ms Coffey told Sky News: "I think we're in a number similar in terms of being ready to help people and trying to help them get back to work as quickly as possible."
"We're bringing people into the organisation and in a Covid-safe way in order to respond to the challenge. I genuinely hope we don't reach, obviously, that figure. But it's important we are ready to help people."
Number 10 said on Thursday Ms Coffey was referring to figures from the OBR. A Downing Street spokesman said: “I think what the work and pensions secretary was referring to was the OBR forecasts. The government is prepared to step up and support as many people as possible. We are trying to keep as many people as possible in jobs, including through the job support scheme.”
The number of people on Universal Credit soared in the first wave of the pandemic, with 2.7 million claiming by August – a 121 per cent increase since March. People can claim Universal Credit either to bolster a low salary or support them while they look for a job.
Ministers are now preparing for a sharp rise in unemployment as Rishi Sunak, the Chancellor, ends the £39 billion furlough scheme and replaces it with a wage subsidy plan at the end of October (ewatch him announce the measures in the video below).
The taxpayer no longer pays part of the wages of an estimated three million employees who have been seen their careers put on ice by the coronavirus pandemic. Instead, the Treasury will only subsidise people who are working at least a third of their usual hours.
Ms Coffey said her department was ready for an increase in claimants and was "evolving our plans recognising how the economy works".
The Department for Work and Pensions has won plaudits for the way it has swiftly recruited extra staff to cope with the huge increase in claimants for Universal Credit. It will have hired 25,000 new staff in the year to March 2021 – a 33 per cent increase year on year.
Many of the new staff are work coaches who help people who have lost their jobs to retrain.
Ms Coffey added: "The doubling of work coaches is a real investment in making sure we help people, many of whom will never have had benefits and may not have been unemployed or for a very long time.
"That might be putting their chosen career on hold, just for a couple of years while their sector recovers, but helping them get into some of the growth sectors – construction, other infrastructure, health and social care."
She added: "We've never promised we could save every single job or every single company. We will do our best to try and help businesses keep going. But we have reached a point where we absolutely recognise we cannot pretend, we've never pretended, we can save every job."
A spokesman for Number 10 said: "The Government is prepared to step up and support as many people as possible. We are trying to keep as many people as possible in jobs, including through the job support scheme."
Companies are cutting hundreds of thousands of jobs as coronavirus continues to hit the economy.
The most recent unemployment rate – for May to July – is 4.1 per cent, according to the Office for National Statistics (ONS), but the claimant count suggests it will be much worse.
Many of the new Universal Credit claimants are young people. Official figures published in September show that the numbers of under-25s on Universal Credit increased by 250,000 to a record 538,000 during lockdown.
The surge in new claimants between March and July meant that that one in 13 of the seven million Britons aged between 16 and 24 years old is now claiming benefits.
Under a "KickStart" scheme launched in September, the Government will fully fund each "Kickstart" job – paying 100 per cent of each person's National Minimum Wage, National Insurance and pension contributions for 25 hours a week from November.
Employers will be able to top up this wage, while the Government will also pay employers £1,500 to set up support and training for them, as well as helping pay for uniforms and other costs.