The Government must be prepared for unemployment levels to hit highs not seen in the UK since the 1980s, according to two former chancellors.

Lord Darling of Roulanish and George Osborne also called on ministers to ensure more structures to help the unemployed are in place.

Alistair Darling, who was Labour chancellor under Gordon Brown during the 2008 financial crisis, said: “We need to get ourselves into the frame of mind where we’re thinking of 1980s levels of unemployment.

“If it doesn’t happen, that’s great but I think we need to be ready for that and if we’re not people will ask why.”

Answering questions on comparisons between the financial crisis and the coronavirus pandemic from the Treasury Select Committee, Mr Osborne said: “We didn’t really have to deal with mass unemployment. We never faced the structural unemployment that we saw in the 1980s.”

He added that the Government must make sure unemployed workers do not end up on long-term benefits.

The former Tory chancellor explained: “Governments of all colours since the Second World War have not done terribly well at getting structurally unemployed people back into work.”

The pair were giving evidence alongside former Tory chancellor Philip Hammond, who said there were too many uncertainties to know how quickly and successfully the economy can recover.

He said: “A lot is going to depend whether over the next months it is clear that we are heading towards a vaccine or treatment for this disease and returning the economy to something like normal, or, by contrast, that we’re not heading towards an early vaccine or a treatment and we have to plan, in terms of restarting the economy living with Covid – restructuring our businesses so they can operate in a sub-optimal way so they can operate with the disease.”

All three said the Government should not concern itself with the high levels of debt the UK is wracking up in the short term, avoid tax rises and consider tax cuts either through a VAT reduction or national insurance payments.

Mr Hammond said there was “no economic logic to increasing taxes in the short term”.

The trio also discussed interventions, welcoming the furlough scheme but warning it would need to be extended in some form.

Experts worry that many of the 8.7 million people who have been placed on furlough might lose their jobs when the scheme starts winding down and is ended.

The government currently promises to cover 80% of the salaries of furloughed workers.