As Chancellor Rishi Sunak’s furlough scheme ends, Britain braces for new tsunami of job losses
Major companies have culled nearly 200,000 British jobs already as they struggle with the devastating impact of the coronavirus pandemic, a Mail audit has found.
As shops and eateries face growing curbs, and international travel is hit by a collapse in demand, leading firms from Marks & Spencer and British Airways to Rolls-Royce and Debenhams have slashed around 183,900 roles across the UK this year.
But experts and business leaders warned this is just the tip of the iceberg – far worse is to come as fresh Covid-19 lockdowns slam the brakes on the economic recovery.
Challenging times: Rishi Sunak’s furlough scheme is being replaced by a slimmer jobs support scheme
The Government’s furlough scheme – which supported 9m jobs at its height – comes to an end today and will be replaced by a slimmer jobs support scheme.
Employers have warned it will not be enough to stave off more redundancies if restrictions tighten further, as businesses face tumbling visitor numbers or being forced to close altogether. Unemployment has already risen to a three-year high of 4.5 per cent, with the Bank of England predicting it could rise to 7.5 per cent by the year’s end, potentially leaving 2.6m out of work.
And this week the Resolution Foundation estimated the UK is facing the highest level of youth unemployment since the 1980s, after a survey found 20 per cent of 18 to 24-year-olds could soon be jobless.
In a fresh warning yesterday, the Federation of Small Businesses (FSB) called on ministers to make sure that firms ‘have the support they need to make it through the next few months’.
Mike Cherry, the group’s national chair, said: ‘With new restrictions being imposed in every part of the country, many of which are set to get tighter in the weeks to come, small businesses face huge difficulties over the winter months ahead.
‘Our latest small business index found that 30 per cent of employers expect to make some staff redundant in the next three months.
‘That is the scale of concern and uncertainty that small firms are faced with for their businesses, with many letting staff go for the very first time.’
Pubs have warned that lifeline grants promised by Chancellor Rishi Sunak will not reach them unless state aid rules are changed – putting 1m jobs at risk. The British Beer & Pub Association, British Institute of Innkeeping and UK Hospitality warned that with – out action some 20,000 venues in areas hit by Tier Two and Three lockdowns will be starved of the desperately-needed cash. They said: ‘If action is not taken, thousands of businesses might not survive to the spring.’ Jobs at other leisure sector businesses, such as nightclubs, have also taken a sharp hit.
The UK’s largest nightclub owner, The Deltic Group, had already cut around half its staff before it put itself up for sale yesterday. The Treasury has insisted that its jobs support scheme and job retention bonus – awarded to firms for keeping on staff who were previously furloughed – will together cover 95 per cent of total wage costs for the average furloughed employee until February.
Around 9.6m people used the furlough scheme in total, though the most at any one time was 8.9m. Sunak said the programme had supported ‘9.6m jobs through some of the most challenging economic times’.
But he added: ‘It’s right that as we move towards a more targeted approach to tackle the virus, our support becomes more targeted too. The jobs support scheme will continue to protect jobs through – out the difficult months ahead and is part of our comprehensive plan for jobs.’