JOBS MELTDOWN
Calls for Chancellor to extend furlough scheme for worst-hit sectors after 4500 staff axed in latest redundancies across UK.. just two working days into the month
THERE are growing calls to extend the furlough job retention scheme after nearly 4500 jobs have been lost at major UK employers in the first two working days in August.
Several companies announced redundancies and reported shrinking profits in the wake of the coronavirus lockdown.
Scotch whisky producer Diageo said it had its half-year profits almost halved after it was hammered by the closure of pubs and bars in the face of the pandemic.
The world’s biggest whisky producer, which employs 3000 in bottling plants and distilleries across Scotland, saw shares slide after it revealed operating profits dived 47 per cent to £2.1billion in the year.
Ivan Menezes, chief executive of the company, insisted action taken to slim down the company in previous years gave Diageo a solid foundation to see it through.
He said: “We have acted quickly to protect our people and our business, and to support our customers, partners and communities.”
But there is evidence that an unemployment spike has already arrived in Scotland.
The Unite union yesterday pledged to pledged to fight for jobs following an announcement by Johnstons of Elgin that 88 staff are at risk at the textile firm’s Elgin and Hawick sites.
Johnstons of Elgin said that it had taken the decision due to the impact of the Covid-19 pandemic on the business.
Graeme Turnbull, Unite’s regional officer, said: “We understand the pressures on business due to the Covid-19 pandemic but we ask that Johnstons of Elgin work with us to ensure that we save as many jobs as possible and we stave off in all circumstances any future announcements.”
On the high street, Pizza Express said it was to close 15 per cent of its UK restaurants, putting more than 1000 jobs at risk.
Dixons Carphone announced a plan to slash 800 jobs as part of an overhaul of its store management structure. The jobs blow adds to the 2600 redundancies announced on Monday at the retail and gym chain DW Sports and tour operator Hays Travel. A total of £50billion in loans to businesses hit by Covid-19 have been approved so far, the Treasury said, to hold back the flood of closures.
The Government is continuing to support the salaries of 9.6million workers on furlough through the job retention scheme
The latest figures show that 1.2million businesses are
claiming a total of £33.8billion for wages but the scheme is being wound down over August and September and Chancellor Rishi Sunak insists it will come to an end in October.
From this month, employers are asked to pay a small part of their employees’ wages: five per cent now, 10 per cent in September and 20 per cent in October before furlough ends.
Opposition parties called for a sectoral extension to furlough after the Office for Budget Responsibility (OBR) said UK unemployment could surpass the peaks of the 80s and the UK manufacturing sector warned of a “jobs bloodbath” in the autumn.
More than 26,000 jobs were lost at British employers in July, a small decrease from June when almost 30,000 jobs were lost.
In May, about 36,000 job losses were announced. The list of job losses only counts the biggest cuts that have been announced to the public, so shows only a small part of the devastation to the UK economy.
Thousands more positions have likely been lost at smaller firms. Ed Miliband, Labour’s shadow business secretary, said:
“There will be a ‘jobs bloodbath’ if the furlough is not extended in key sectors.”
Alison Thewliss MP, the SNP shadow Treasury spokeswoman, added: “If Westminster won’t act then it must devolve the powers so Scotland can get on with the job”.