Nine Million furloughed jobs under threat after October 31st as Rishi Sunak confirms end to scheme

Speaking on BBC Breakfast and BBC Radio Scotland, Rishi Sunak has confirmed the end of the UK furlough scheme will be October 31st

He said it was one of the most difficult decisions he has had to make. Over 9 million jobs have been protected by the scheme however and opposition has warned that many family incomes will be devastated by the loss of the furlough payments.

UK Chancellor Rishi Sunak said in the interview “It’s wrong to keep people trapped in a situation and pretend that there is always a job that they can go back to. I think most reasonable people will say ‘gosh, that’s not something that can carry on forever. In common with almost all countries around the world, their versions of this scheme are slowly being wound down toward the end of the year. It is wrong to keep people trapped in a situation where there was no realistic prospect of them having a job to go back to”

Ed Miliband, Labour Party MP warned “The government will be culpable for thousands of workers across the country losing their jobs and livelihoods if it ends the job retention program prematurely.”

Fiona Hylsop, Scotland’s Economy Secretary stated “The scheme, which has proved to be vital for workers and businesses alike and undoubtedly helped save lives, should last longer in some parts of the country”

London’s National Institute of Economic and Social Research Deputy Director Garry Young says “shutting down the scheme prematurely is a mistake that will increase the probability of economic scarring.”

As a trade off, Sunak announced a plan to give businesses a one-off bonus of £1,000 for each furloughed worker who is still employed as of January 31, 2021. The government also plans to launch a £2 billion scheme to support creating hundreds of thousands of jobs for young people.

Scotland where 65,000 businesses have benefited from more than £2bn of loan support wants the furlough scheme to be extended .

On the issue of why furlough support was not being extended to areas such as tourism, which will undoubtedly be the worst affected for a much longer period Sunak stated “Most reasonable people will agree that the government helping to pay private firms wages is not something that can carry on indefinitely. It is wrong to keep people trapped in a situation and pretend there is always a job that they can go back to, that won’t always be the case. In those situations it’s better we look forward and provide those people with new opportunities.”

To date:

  • The UK government’s bounce back loans scheme, offers between £2,000 and 25% of the turnover of small and medium businesses.
  • The UK government also guarantees the loans, which have no interest for the first year, before the rate rises to 2.5% after 12 months.
  • 63,469 loans had been approved, totaling £1.8 billion
  • The coronavirus business interruption loan scheme has paid out more than £587m and the UK government guarantees up to 80% of the loan and will pay interest and other fees inside the first year.

 


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