Furlough hits new low ahead of weekend wind down

The number of people living on furlough has fallen to under two million as the job-saving scheme continues to wind down this week.

The latest figures showed 590,000 fewer employees were claiming support from the Coronavirus Job Retention Scheme by the end of June, driven by a “dramatic decrease” in the number of young people claiming furlough as the hospitality industry made a comeback. 

In total, 1.9 million staff and 540,000 employers are still relying on the scheme, which has protected 11.6m jobs since March 2020 and cost the UK government £67.4bn.

But employers will be asked to pay more from Sunday. While employees will still receive 80 per cent of their wage – now capped at £1,875 instead of £2,187 – their employers will pick up 20 per cent of wages while the government’s contribution falls to 60 per cent.

There are fears among industries that are still facing Covid-19 disruption, such as the aviation and travel industry, over how jobs will be impacted when the scheme ceases entirely at the end of September.

The Big Issue has launched a Stop Mass Homelessness campaign with a nine-point plan to prevent potential increases in homelessness once the scheme ends, as thousands are set to lose furlough cash and the £20 universal credit increase faces a ‘cliff edge’.

Sign our petition to #StopMassHomelessness

Rebecca Duncan, who works in the aviation industry, is now in her 17th month on furlough and said the financial impact is beginning to bite.

“It’s a significant drop in income for a lot of people. I think had it been three, four, maybe even six months, I would probably not have noticed that much,” the 40-year-old Londoner said. “But now I am in my 17th month of that lower income and the amount of income I have lost over the last 12 to 16 months has had a huge impact.

“It’s forced me to borrow money and to use any savings I had too, and to make all sorts of cutbacks, even small things. I’ve changed where I shop and have had the long boring job of changing insurances and utility bills.”

If furlough isn’t extended beyond the end of September then I can’t see how all airlines and all related sort of travel and tourism businesses will be able to surviveRebecca Duncan, furloughed aviation industry worker

Although the numbers on furlough peaked at 5.1 million in January 2021 and have fallen since, six per cent of eligible employments are reliant on the scheme.

The travel sector remains the industry with the highest rate of jobs on furlough as international travel continues to be disrupted due to the Covid-19 delta variant.

HMRC figures show 58 per cent of passenger air transport staff remain on furlough alongside just under half of employees working in travel agency and tour operator businesses.

London also showed higher levels of staff on furlough than the rest of the country with nine of the 10 local authorities with the highest take-up rates in the English capital. Nick Bowes, chief executive of think tank Centre for London, warned “slower recovery for London will risk the whole country’s recovery too”.

Both are hitting Duncan, who told The Big Issue she struggled to see how the travel sector can survive beyond the end of the furlough scheme.

“If furlough isn’t extended beyond the end of September then I can’t see how all airlines and all related sort of travel and tourism businesses will be able to survive. I just can’t understand it,” Duncan added. 

“But at the same time, by extending furlough, it also gives the government perhaps an excuse to not focus on what they really should be doing, which is putting in place a robust process so that international travel can take place. So, in a funny kind of way, I’d personally be disappointed if they extended furlough.”

As furlough comes to an end, it needs a "worth successor" in better sick pay for workers forced to self-isolate says @thefabians' @andrew_harrop https://t.co/Bx4WLlwmAm

— Big Issue (@BigIssue) July 21, 2021

Despite the troubles ahead for some sectors, Chancellor of the Exchequer Rishi Sunak has praised the furlough scheme’s impact in protecting jobs.

Sunak said three million people have moved off the furlough scheme since March, showing encouraging signs the economy is beginning to recover from the pandemic.

“It’s fantastic to see businesses across the UK open, employees returning to work and the numbers of furloughed jobs falling to their lowest levels since the scheme began,” said Sunak.

“I’m proud our Plan for Jobs is working and our support will continue in the months ahead.”

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