Government focusing on rescuing jobs with furlough scheme
THE Government is increasingly focused on rescuing the economy as the nation comes out of lockdown, according to Treasury Minister Jesse Norman.
He spoke in the House of Commons after business leaders including North East England Chamber of Commerce warned that unemployment will rise as the furlough scheme comes to an end.
A total of 282,500 people have been placed on furlough in the North East region, including 125,000 in Tyne and Wear.
It means that the Government is paying up to 80% of their wages while they stay at home.
Speaking in the House of Commons, Mr Norman said: “The thoughts, energies and resources of the Government are focused increasingly on planning for the recovery. We will develop new measures to grow our economy, to back businesses and to boost skills.”
Referring to figures published last week, he said: “The Office for National Statistics published its first estimate of April GDP and showed the economy contracting sharply by a record 20.4% on the month.
“It is clear that restrictions introduced during the lockdown, while necessary, have had a severe impact on output.”
An analysis by think tank the Centre for Cities found that 26% of Sunderland workers, more than one in four, are currently furloughed.
But the furlough scheme, known officially as the job retention scheme, is to be wound down slowly. From August, employers will have to pay some costs.
And the amount they pay will increase, until the scheme is abolished at the end of October.
While the scheme has been designed to save jobs until the economy re-opens, it appears certain that some staff will simply be made redundant once firms have to start contributing to the cost of employing them.
Jonathan Walker, assistant director of policy, North East England Chamber of Commerce said: “The headline labour force statistics show that the regional economy was still in job creation mode right up to point when Covid-19 hit.
“These numbers do not yet fully show how severe the impact of the current crisis has been on our labour market.
“Government support such as the furlough scheme has helped to stave off many major job losses for the time being, but the fact that May’s claimant count is 77% higher than this time last year shows the scale of the challenge we are likely to face. The North East continues to have the highest unemployment rate in the country.”