Sunak faces job cuts crisis after furlough
Most mid-sized businesses expect to cut workers as employment support scheme is withdrawn
BRITAIN is facing a grim autumn of job cuts after fresh evidence emerged today that most mid-sized UK businesses expect to cut staff when the furlough scheme ends, while the manufacturing industry could lose skilled workers permanently as companies warn the Government risks removing a key plank of support before the economy recovers.
It raises the prospect of a full-blown unemployment crisis in the autumn, ratcheting up pressure on the Chancellor, Rishi Sunak, to extend the job retention scheme (JRS) which he introduced to preserve employment through the pandemic.
Six businesses in 10 do not plan to bring back all of their staff when the Treasury stops supporting the wages of those still off work, according to a survey from BDO published today.
The subsidies finish at the end of October as the Chancellor warned the JRS, brought in to keep jobs open for workers who would have been laid off in lockdown, cannot continue forever.
Almost 90pc of mid-sized firms said they have already made some staff redundant, the survey found. At the same time almost two thirds of manufacturers told industry group MakeUK the JRS should be extended for key sectors to protect vital parts of the economy which might otherwise struggle to recover.
“The protection of key skills should be a strategic national priority as this will be the first building block in getting the economy up and running,” said Stephen Phipson, MakeUK’s chief executive.
“The starting point for this should be an extension of the JRS to those sectors which are not just our most important but who have been hit hardest. Failure to do so will leave us out of step with our major competitors and risk a loss of key skills when we can least afford to do so.”
Dominic Raab, the Foreign Secretary, told the BBC: “The economy needs to have people back at work. We are trying to bounce back as strongly as possible.”
Research from Morgan Stanley shows British office workers are much more reluctant to recommence commuting than their peers in Germany, France, Italy and Spain, where the vast majority have returned.
Meanwhile one in six small and medium-sized enterprises said they would not expect to survive another lockdown, in a survey from insurer Simply Business. Smaller companies appear more resilient than mid-sized firms.