Set clear path to end furlough scheme, employers urge

EMPLOYERS have urged ministers to make clear plans for helping businesses get back on their feet amid fears that a sudden stop to the furlough scheme will trigger mass redundancies.

Forecasts by The Resolution Foundation predict that 8.3million Britons will be paid by the state by the end of June, when the job retention scheme is scheduled to finish, following an extension by the Treasury last week.

As many as 11.7million people in total are expected to be out of work, when unemployment is also taken into account. The Government is covering 80 per cent of wages up to £2,500 per month for staff placed on leave, through to June. The scheme begins today with businesses able to register online.

However, the risk of mass redundancies remains. Businesses are expecting to struggle in the post-lockdown economy and already weighing whether to make job cuts in preparation.

Sir John Timpson, the chairman of the cobbler Timpson, warned of the risk of a “dramatic hike” in the number of redundancies.

Employers are required to give 45 days’ notice if they plan to lay off more than 100 staff.

Sir John said he expected only half the normal custom when his stores reopened.

He called for a further extension to the furlough scheme in July and August, during which the state would pay 50 per cent of wages and employers would make up the difference to 80 per

cent as “it will take many months to bring it back to life”.

Sir Martin Sorrell, the advertising mogul, echoed the warning, saying that a prolonged lockdown would require the Government to “say they’ll subsidise [wages] for a longer period or companies will have to take more drastic action” and cut jobs.

Gerard Lyons, an economist and former adviser to Boris Johnson, said: “We’ve not seen demand really rebound [in China], so there’s no doubt you could have a situation where firms come back and demand doesn’t really pick up.”

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