Thousands risk redundancy as furlough ends

The scheme helped millions over lockdowns, with nearly a million still relying on it

The furlough scheme came to end in September
Author: Alex UsherPublished 30th Sep 2021

The Government's £70 billion Furlough Scheme is finally due to end today after 18 months, with thousands of people fearing over losing their jobs.

The scheme paid 11.6 million workers up to 80% of their wages whilst businesses were closed, to help companies stay afloat during the pandemic.

Almost one millions workers were expected to still be receiving support through the financial scheme at the end of September, according to the latest Office for National Statistics.

Andy Auld, the head of Citizen’s Advice in Cumbria, has expressed that people should be aware of their rights and make sure they get all the money they are owed.

He said: "One of the concerns is individuals will be at risk of redundancy. It's important that people know they do have rights to protect them from unfair dismissal and to ensure they are paid what they're owed.

"If you're made redundant while furloughed, your redundancy pay should be based on your normal wage and not the 80% you've been getting during furlough. Make sure you're getting your full entitlement."

You can check your redundancy pay amount on the gov.uk website, to ensure you know what you are entitled to.

Citizens advice has also urged those who may risk redundancy and are struggling financially to see them as soon as possible.

What could the end of furlough mean for unemployment?

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.

Alan Custis, head of UK equities at Lazard Asset Management, said the rate of unemployment, which dropped to 4.6% last month, is likely to swing higher again.

"There will also be a percentage who choose retirement over returning to work, but we would expect the unemployment rate to settle at around 5% for the year end, before falling in 2022," he said.

The end of furlough also comes amid record UK vacancy figures, with the latest Office for National Statistics 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.

How have parliament responded?

The Liberal Democrats have called for furlough support to be extended for the 10 most affected sectors to avoid a "tidal wave" of job losses.

In a letter to Mr Sunak, Liberal Democrat Treasury spokesperson Christine Jardine said furlough should be extended for another six months for the 10 sectors, which include air travel and photography, in a move it claims would cost around £600 million.

Ms Jardine said: "The withdrawal of furlough risks having a devastating impact on countless families already facing a winter of soaring energy bills.

"The Government needs to rethink its approach or the country could face a Coronavirus Black Thursday."

Chief Secretary to the Treasury, Simon Clarke, has said that job losses will be "part of the process".

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