30 September 2021

Sunak proud of furlough, but ‘not done’ supporting people

30 September 2021

Chancellor Rishi Sunak has said he is “proud” of what furlough has achieved, adding the Government is “not done” supporting people and he feels confident about the future.

It comes as the furlough scheme ends on Thursday and after the Chief Secretary to the Treasury Simon Clarke said earlier that there will be some job losses, which he described as “part of the process” of ending the crisis.

The £70 billion furlough programme closes on Thursday after supporting millions of UK workers over the past 18 months.

Chancellor of the Exchequer Rishi Sunak listens to an employee during a visit to a British Gas training academy (Rui Vieira/PA) (PA Wire)

Speaking on a visit to a factory in South Milford, North Yorkshire, the Chancellor said “everyone is now back at work”, and that for others the Government has a plan for jobs.

Mr Sunak said: “I’m so proud of what [furlough] has achieved. It has protected millions of people’s livelihoods at a difficult time.

“But I’m also really proud of everyone who has shown such resilience over the last year-and-a-half to get through this. Everyone is now back at work, and that’s a fantastic thing.

“But I also want people to know that we’re not done supporting people even though the furlough scheme ends today. We have a plan for jobs that is focused on giving people the skills and the opportunities they need to find fantastic work and that’s what we’re now focused on delivering.”

He added: “I feel confident about the future”.

He said: “There were things that we did during the crisis to help people get through the worst part of coronavirus and I think like furlough ending, the UC (Universal Credit) uplift, it’s natural that those things will come to an end.

“But we’re not done supporting people. Our plan for jobs is literally throwing the kitchen sink at helping people get the skills they need and find new opportunities.”

He added: “But we also announced today a half-a-billion pounds programme to provide support to people, to help them get through the winter. We appreciate that the prices of some things have gone up rapidly.

“And the half-a-billion pounds will help three or four million of our most vulnerable families with £100 or £150 over the winter period. And I know that will make a difference to people at what is a difficult time.”

Chief Secretary to the Treasury Simon Clarke told Sky News earlier that “there will be some job losses”, but said he did not have an estimate with him.

He said: “Furlough has protected 11.6 million jobs in total … at some point you have to end these emergency measures.

“People’s jobs will be created just as some have very sadly been lost, that is part of the process of ending this crisis and going back to normal.”

The minister also said “we never said we could protect every job”, and that “my message to people would be there are these opportunities there.”

Uncertainty remains for the future of almost one million workers who were expected to be still receiving support through the financial scheme at the end of September, according to the latest Office for National Statistics (ONS) estimates.

Economists have warned that although many may find work in recovering sectors such as hospitality and travel, there is also likely to be a rise in unemployment due to new redundancies.

Alan Custis, head of UK equities at Lazard Asset Management, said the rate of unemployment, which dropped to 4.6% last month, is likely to swing higher again.

“There will also be a percentage who choose retirement over returning to work, but we would expect the unemployment rate to settle at around 5% for the year end, before falling in 2022,” he said.

Mr Custis added that other countries, such as the US and Australia, saw unemployment spikes when similar financial support for workers came to an end.

The end of furlough also comes amid record UK vacancy figures, with the latest ONS data for August reporting more than one million available jobs for the first time on record.

There have also been significant hiring sprees amid labour shortages for HGV drivers, warehouse staff and food production workers.

Nevertheless, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said he has “doubts” as to whether broader consumer demand will have jumped enough by October to re-employ all staff who remained on furlough.

As a result, the Liberal Democrats have called for furlough support to be extended for the 10 most affected sectors to avoid a “tidal wave” of job losses.

The Government needs to rethink its approach or the country could face a Coronavirus Black Thursday

In a letter to Chancellor Rishi Sunak, Liberal Democrat Treasury spokesperson Christine Jardine said furlough should be extended for another six months for the 10 sectors, which include air travel and photography, in a move it claims would cost around £600 million.

Ms Jardine said: “The withdrawal of furlough risks having a devastating impact on countless families already facing a winter of soaring energy bills.

“The Government needs to rethink its approach or the country could face a Coronavirus Black Thursday.”

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