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Saturday, September 19, 2020

Fears Britain’s ‘redundancy floodgates will open’ as millions of furloughed workers face deadline

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Mass redundancies are feared ahead of the furlough scheme ending next month – with millions of workers set to learn today if they still have employment.

Unions and around 1,200 Labour councillors and mayors across the UK have written to the Prime Minister airing their concerns.

They want a targeted financial support scheme to prevent ‘mass unemployment’ as the job retention scheme stops. 

Regulations on workers’ rights state companies looking to make over 100 staff redundant have to start a 45-day consultation period.

It means those looking to lay off employees before furlough stops at the end of October legally have to start those talks before tomorrow, September 17.

Unite union leader Len McCluskey has called on Boris Johnson to stop bosses opening the ‘redundancy floodgates’ when the scheme winds down.

The general secretary wrote to the Prime Minister, warning that workers face a ‘miserable’ Christmas when furlough comes to an end.

Unite union boss Len McCluskey warns of a 'miserable' Christmas when furlough ends

Unite union boss Len McCluskey warns of a ‘miserable’ Christmas when furlough ends

Separately another letter from councillors outlines support for the Alliance for Full Employment, launched by former prime minister Gordon Brown, the North’s Metro Mayors, the Welsh First Minister, Mayor of Bristol and Mayor of Greater London, Sadiq Khan, last week.

It has called for a financial system that targets industries worst hit by the pandemic to be set up to ensure income for people forced to self-isolate.

Chancellor Rishi Sunak has already ruled out extending furlough arguing ‘indefinitely keeping people out of work is not the answer’.  

Jack Abbott, a councillor on Suffolk County Council, said: ‘The communities we represent are facing an unprecedented employment crisis should Boris Johnson not reverse his decision to withdraw the furlough scheme in its entirety – he is putting millions of jobs at risk.

Prime Minister Boris Johnson has received letters urging him to stop mass redundancies

Prime Minister Boris Johnson has received letters urging him to stop mass redundancies

‘The fact that well over 1,000 councillors and local representatives have signed this letter underlines the strength of feeling behind this campaign.

‘Without targeted support for sectors and local lockdown areas that have been badly affected by the pandemic, we know that viable businesses will fail and employment will be lost. This will extinguish any hopes of a quick economic recovery from the deep recession we are facing.’

Gordon Brown, added: ‘So many Labour leaders across the localities of Britain coming together to back our Alliance for Full Employment shows the extreme anxiety about mounting unemployment.

‘Councillors know best what is happening in their local communities where too many people are worried sick about their livelihoods.

Empty offices are starting to have staff return after the ravages of strict coronavirus lockdown

Empty offices are starting to have staff return after the ravages of strict coronavirus lockdown

‘Mass unemployment is not the inevitable economic outcome to the Covid pandemic, but it will be unless the Prime Minister makes the political decision to change course.’

A Treasury spokesman said: ‘The furlough scheme has done what it was designed to do – save jobs and help people back into employment.

‘And many of our unprecedented interventions – including the Job Retention Bonus, business rates holidays, VAT cuts and the Kickstart Scheme – will ensure this support continues into next year.

‘We’ve not hesitated to act in creative and effective ways to support jobs and we will continue to do so as we recover from this crisis.’

Four million are STILL on furlough despite it ending next month: Rishi Sunak pleads with firms not to slash jobs when £38bn bailout is axed amid fears employment numbers could fall off a cliff 

By DAVID WILCOCK, WHITEHALL CORRESPONDENT FOR MAILONLINE

Rishi Sunak begged employers not to sack staff when the coronavirus furlough scheme ends next month as the Treasury revealed that almost four million workers remain on it. 

The Chancellor hailed the Job Retention Scheme (JRS) this afternoon amid fears of an employment cliff-edge when it ceases to cover wages at the end of October.

He urged companies to ‘do the right thing’ and apply for the Job Retention Bonus. Launched in July it gives firms £1,000 for each previously furloughed worker who still has a job in January.

Figures released today showed that almost half the more than eight million people places on furlough remained on it in the middle of August, the most recent time period available.

Figures from the Office for National Statistics (ONS) today showed that the unemployment rate rose from 3.9 per cent to 4.1 per cent in the quarter to July.

This was the first time it has increased since the pandemic hit, and the highest in two years. A total of 1.4million are out of work, up by 62,000.

The estimated increase in the rate for July alone was even higher at 0.5 per cent, according to the latest official data.

Meanwhile, some 695,000 payroll jobs have gone since March, and there are 2.7million people claiming benefits.

Rishi Sunak told MPs today he will continue to act in ‘creative and effective ways’ to protect jobs, amid calls for a targeted extension of the furlough scheme. 

Speaking afterwards he added: ‘As today’s official employment figures today show, the furlough scheme has done what it was designed to do – save jobs and help people back to work, where they want to be,’ he said.

‘We were clear at the start of the pandemic that we couldn’t save every job, but the furlough scheme has supported millions of workers and we want to help employers keep people on. 

‘Our Job Retention Bonus will do exactly that, supporting businesses to do the right thing.’

Chancellor Rishi Sunak decorated a plate during a visit to the Emma Bridgewater pottery in Stoke-on-Trent, Staffordshire on Monday, whose workers have returned from furlough.

Chancellor Rishi Sunak decorated a plate during a visit to the Emma Bridgewater pottery in Stoke-on-Trent, Staffordshire on Monday, whose workers have returned from furlough.

Mr Sunak with Boris Johnson at the weekly Cabinet meeting this morning

Mr Sunak with Boris Johnson at the weekly Cabinet meeting this morning

The Chancellor hailed the Job Retention Scheme (JRS) this afternoon amid fears of an employment cliff-edge when it ceases to cover wages at the end of October

The Chancellor hailed the Job Retention Scheme (JRS) this afternoon amid fears of an employment cliff-edge when it ceases to cover wages at the end of October

He urged companies to ‘do the right thing’ and apply for the Job Retention Bonus. Launched in July it gives firms £1,000 for each previously furloughed worker who still has a job in January

Labour leader Sir Keir Starmer this morning repeated his call for the furlough scheme to be extended. 

Making his first TUC conference speech as Labour leader, he said the party accepted the furlough scheme could not continue indefinitely but argued that with ‘a bit of imagination’ the Government could continue to help those most at risk of losing their jobs.

Speaking from his attic, he called for a ‘new, targeted support that can replace the Job Retention Scheme’.

‘The truth is this, the virus is still with us – infections are rising, lockdowns are increasing,’ Sir Keir told the online audience.

‘And for some sectors of our economy – retail, aviation, hospitality – for millions of workers and for towns and cities under restrictions, it just isn’t possible to get back to work or reopen businesses.

‘That isn’t a choice: it’s the cold reality of this crisis. So, it makes no sense at all for the Government to pull support away now.’

Sir Keir called for an expansion of part-time working – rewarding employers who give people hours rather than cut jobs – and the provision of training and support for those unable to return to work full-time in a bid to ‘prevent mass unemployment’.

His called was echoed by Matthew Percival, the CBI’s director of people and skills, who said: ‘The easing of lockdown restrictions and a more flexible Job Retention Scheme in July have led to the beginning of a recovery in vacancies and hours worked.

‘But rising redundancies, rising unemployment and a record fall in the number of young people in work are clear warning signs of what is to come.

‘Looking ahead, a successor to the Job Retention Scheme is needed to protect jobs and businesses.’

Sir Keir Starmer, who is awaiting the results of a test after a family member developed symptoms, told the TUC conference by video link that he had only been screened because his wife works for the NHS.

Sir Keir Starmer, who is awaiting the results of a test after a family member developed symptoms, told the TUC conference by video link that he had only been screened because his wife works for the NHS.

Economists warned that the fall in employment is the tip of the iceberg as it covers a period when the government’s massive furlough scheme was in effect – with alarming predictions of mass layoffs to come when it is withdrawn completely next month. 

According to the Office for National Statistics (ONS), the number of people on payrolls was down 36,000 in August from July. It is now 695,000 lower than in March. 

ONS director of economic statistics Darren Morgan said there were some bright points in the figures – with the employment rate actually creeping up – but coronavirus was having a ‘big impact’.

‘Some effects of the pandemic on the labour market were beginning to unwind in July as parts of the economy reopened,’ he said.

‘Fewer workers were away on furlough and average hours rose.

‘The number of job vacancies continued to recover into August, too.

The unemployment rate rose from 3.9 per cent to 4.1 per cent in the quarter to July - the highest in two years, according to the latest official data

The unemployment rate rose from 3.9 per cent to 4.1 per cent in the quarter to July – the highest in two years, according to the latest official data

According to the Office for National Statistics (ONS), the number of people on payrolls was down 36,000 in August from July. It is now 695,000 lower than in March

According to the Office for National Statistics (ONS), the number of people on payrolls was down 36,000 in August from July. It is now 695,000 lower than in March

In a glimmer of hope, the total hours worked showed some signs of recovery in the quarter to July 2020

In a glimmer of hope, the total hours worked showed some signs of recovery in the quarter to July 2020

‘Nonetheless, with the number of employees on the payroll down again in August and both unemployment and redundancies sharply up in July, it is clear that coronavirus is still having a big impact on the world of work.’

The number of people temporarily away from work – including furloughed workers – dipped, but was still more than five million in July 2020. More than 2.5million had been away for three months or more. 

There were also around 250,000 people away from work because of the pandemic and receiving no pay in July 2020.

The Claimant Count – representing people receiving out of work benefits and some in-work benefits – reached 2.7million in August, an increase of 120.8 per cent since March. 

In glimmers of hope, the total hours worked showed some signs of recovery in the quarter to July 2020, and vacancies rose.

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