Su­nak faces job cuts cri­sis af­ter fur­lough

Most mid-sized busi­nesses ex­pect to cut work­ers as em­ploy­ment sup­port scheme is with­drawn

The Daily Telegraph - Business - - Front Page - By Tim Wal­lace

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.

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