Four million STILL on furlough despite it ending next month as Sunak begs firms not to cut jobs

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.’

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.’

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.

‘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.