finance

Job losses expected as furlough scheme ends


Job losses will be “part of the process” according to a UK Government minister, as the furlough scheme comes to an end.

Chief Secretary to the Treasury Simon Clarke told Sky News: “Obviously there will be a variety of outcomes, I don’t have an estimate with me today; there will be some job losses.”

He added: “Furlough has protected 11.6 million jobs in total … at some point you have to end these emergency measures.

“People’s jobs will be created just as some have very sadly been lost, that is part of the process of ending this crisis and going back to normal.”

The minister also claimed: “We never said we could protect every job … I think we need to be totally honest about this, the Covid pandemic has taken a toll on our economy, it’s changed some things.”

His comments come as the £70bn furlough programme closes today, after supporting millions of UK workers over the past 18 months.

Originally, the job retention scheme saw firms get up to 80% of staff wages, which at the start of August fell to a 60% contribution, capped at £1,875.

Uncertainty remains for the future of almost one million workers who were expected to be still receiving support through the financial scheme at the end of September, according to the latest Office for National Statistics (ONS) estimates.


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At the end of July, Scotland had as many as 116,500 people still on furlough – currently the highest number of workers on furlough amongst the devolved nations, more than Northern Ireland and Wales combined.

Scottish Labour called on the Scottish Government to use the powers it has to avert the worst impacts of today’s changes.

Scottish Labour finance spokesperson Daniel Johnson said: “Companies are calling out for practical support now and need a survival plan to keep afloat.

“The Scottish Government need to use the powers they already have to outline a plan to help businesses transition and workers re-skill.

“If we are to avoid a winter of economic turmoil, then the SNP must act and act now.”

The SNP’s Shadow Chancellor Alison Thewliss commented: “While the pandemic is still ongoing, the UK Government should be looking to strengthen financial support – not prematurely pull it at a time when welfare cuts are coming into force, our energy prices are rising, our tourism and aviation sector is not yet back to normal, and those on the lowest incomes are being hit with a National Insurance hike.

“The SNP are now demanding that the Prime Minister and Chancellor heed the warnings and u-turn on their plans to end the furlough.”

The end of furlough comes at the same time as Westminster has reduced Universal Credit by more than £1,000 a year, while introducing a National Insurance rise that disproportionately hurts people on low incomes.

Scottish Greens social security spokesperson Maggie Chapman said: “What we are seeing is a perfect storm of Tory austerity, and a cost of living crisis that has been worsened by Boris Johnson’s hard Brexit – it is no wonder that Scotland has voted time and again to reject these policies and the party that is inflicting them..”

Economists have warned that although many may find work in recovering sectors such as hospitality and travel, there is also likely to be a rise in unemployment due to new redundancies.

The Department for Work and Pensions announced a new £500m scheme to help vulnerable households over winter.

The rate of unemployment, which dropped to 4.6% last month, is likely to creep up again during the autumn.

The end of furlough also comes amid record UK vacancy figures, with the latest ONS data for August reporting more than one million available jobs for the first time on record.

There have also been significant hiring sprees amid labour shortages for HGV drivers, warehouse staff and food production workers.

Kate Nicholls, chief executive of UKHospitality, said: “With businesses currently experiencing a record number of vacancies, our hope is that those seeking employment will consider the varied and exciting opportunities a career in hospitality offers.

“In order to drive further job creation, we urge government to implement a long-overdue reform of business rates and a permanently lower rate of VAT for hospitality and tourism in order to help fragile businesses back on their feet.”

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