Rishi Sunak under pressure to 'urgently' extend furlough scheme past June
Chancellor Rishi Sunak is under pressure to deliver a second wave of furlough payments as the government’s lockdown period continues.
The Coronavirus Job Retention Scheme (JRS), which supports businesses by paying 80% of workers’ salaries up to £2,500, is set to be cut off in June. Industry think-tanks have now warned that up to 35% of jobs could be lost if the payments are not extended.
More than 140,000 businesses are currently using the scheme for an estimated 9,000,000 members of staff across the UK. The Office of Budgetary Responsibility (OBR) estimates it is costing around £42,000,000,000 for the three months it has been rolled out.
Prime Minister Boris Johnson is due to set out a plan for exiting current lockdown restrictions next week, explaining how workers will be able to start returning to their jobs and when children will be expected to be back in school.
Reports indicate the first easing of restrictions could be as early as June, but other European nations, such as France and Spain, predict their measures will remain in place until July.
Industry think-tank the Royal Society for encouragement of Arts, Manufacturing and Commerce (RSA) warned that without further furloughs unemployment could rise to levels not seen since the 1930s.
Alan Lockey, head of the RSA Future Work Centre, said the government must avoid going ‘back to “business as usual”‘ once the threat of the pandemic lessens. He added that most of the world will suffer a ‘severe recession’, with tourism and hospitality among the industries worst hit.
He said: ‘There is an estimated 27% of the entire workforce on furlough, with more than 80% of workers in the hospitality sector affected. If those people were made redundant the level of unemployment would rocket to levels not seen since the Great Depression.’
His words were echoed by the Chartered Institute of Personnel and Development, who warned that the furlough scheme could become ‘a waiting room for unemployment’ if further action is not taken – causing jobs to fall by the wayside.
They said a lengthening of the JRS would ‘provide more certainty for employers and ensure that there is no “cliff edge” exit from furlough straight to redundancy for hundreds of thousands of workers at the end of June’.
Shadow business secretary Ed Miliband has since called for Sunak to ensure businesses are protected from ‘existential threat’, which would cause significant risk to ‘hundreds of thousands of their workers and the very fabric of our high streets and communities’.
Writing in the Observer, he continued: ‘The government must act urgently with a second wave of support, including, where necessary, an extension of the furlough scheme – with greater flexibility to enable part-time working – and it must look again at the gaps in current schemes.’
More than 140,000 businesses are currently using the scheme for an estimated 9,000,000 members of staff across the UK. The Office of Budgetary Responsibility (OBR) estimates it is costing around £42,000,000,000 for the three months it has been rolled out.
Prime Minister Boris Johnson is due to set out a plan for exiting current lockdown restrictions next week, explaining how workers will be able to start returning to their jobs and when children will be expected to be back in school.
Reports indicate the first easing of restrictions could be as early as June, but other European nations, such as France and Spain, predict their measures will remain in place until July.
Industry think-tank the Royal Society for encouragement of Arts, Manufacturing and Commerce (RSA) warned that without further furloughs unemployment could rise to levels not seen since the 1930s.
Alan Lockey, head of the RSA Future Work Centre, said the government must avoid going ‘back to “business as usual”‘ once the threat of the pandemic lessens. He added that most of the world will suffer a ‘severe recession’, with tourism and hospitality among the industries worst hit.
He said: ‘There is an estimated 27% of the entire workforce on furlough, with more than 80% of workers in the hospitality sector affected. If those people were made redundant the level of unemployment would rocket to levels not seen since the Great Depression.’
His words were echoed by the Chartered Institute of Personnel and Development, who warned that the furlough scheme could become ‘a waiting room for unemployment’ if further action is not taken – causing jobs to fall by the wayside.
They said a lengthening of the JRS would ‘provide more certainty for employers and ensure that there is no “cliff edge” exit from furlough straight to redundancy for hundreds of thousands of workers at the end of June’.
Shadow business secretary Ed Miliband has since called for Sunak to ensure businesses are protected from ‘existential threat’, which would cause significant risk to ‘hundreds of thousands of their workers and the very fabric of our high streets and communities’.
Writing in the Observer, he continued: ‘The government must act urgently with a second wave of support, including, where necessary, an extension of the furlough scheme – with greater flexibility to enable part-time working – and it must look again at the gaps in current schemes.’