UK furlough crisis: One in three firms to lay off staff before Government scheme ends

The British Chambers of Commerce (BBC) quarterly recruitment outlook reveals 29 percent of 7,400 firms surveyed expect to shed jobs over the third quarter – a record high for the study. The bleak figures lay bare the coronavirus pandemic’s enormous pact on Britain’s job market and economy. The report – compiled in conjunction with Totaljobs – found 28 percent of firms polled had already cut roles between April and June.

Firms will still face tough decisions despite welcome interventions made in the summer statement

Hannah Essex

The study also showed 41 percent of large companies and 41 percent of small and medium-sized firms expect to cut staff over the next quarter, with 18 percent of micro businesses also forecasting workforce reductions.

Recruitment also ground to a halt, with just 25 percent of firms looking to take on new hires in another grim record for the report.

The figures come amid mounting fears of mass unemployment as businesses shed staff to cope with the fall out from the COVID-19 crisis.

Boris Johnson

Britain is facing a mass unemployment crisis (Image: PA)

The BCC welcomed Rishi Sunak’s announcements in last week’s summer statement – including a Job Retention Bonus scheme, which will give £1,000 to firms for each furloughed employee they bring back to work.

The Chancellor also unveiled a Kickstart Scheme and an apprenticeship recovery programme to help try to shore up the jobs market.

But the BCC and Totaljobs urged him to take more action, calling for a temporary cut in National Insurance contributions to help protect businesses and jobs.

READ MORE: UK unemployment: Economic disaster looms after 649,000 job losses

Boris Johnson

Boris Johnson is urging people to go back to work (Image: GETTY)

Hannah Essex, co-executive director at BCC, said: “Many businesses are suffering from an historic cash crunch and reduced demand, meaning firms will still face tough decisions despite welcome interventions made in the summer statement.

“The Government should consider additional support for employers before the autumn Budget to reduce the overall cost of employment and prevent substantial redundancies.”

She also said the Government could consider support to “upskill and reskill” employees as businesses adapt to changing working practices after the lockdown.

Rishi Sunak

Rishi Sunak has unveiled a range of measures to help the economy through the coronavirus crisis (Image: PA)

At least 150,000 jobs have already been cut or put at risk at more than 60 major British employers during lockdown.

Around 75,000 job losses were announced last month alone.

The Office for Budget Responsibility has warned Britain could be facing an unemployment rate surging potentially as high as 13 percent from just under 4 percent now.

But there are tentative signs of recovery, according to Totaljobs, which has seen a 30 percent month-on-month increase in the number of roles being advertised on its website for June.

Sectors benefiting from easing lockdown restrictions saw big rises in vacancies – up 51 percent across retail, 47 percent for travel and 23 percent for hospitality.

A Government spokeswoman said: “Throughout the pandemic, we have acted with speed to safeguard jobs and incomes, with our support package totalling £160 billion so far.

“The Plan for Jobs announced last week, including the Job Retention Bonus and the new Kickstart Scheme, will give businesses the confidence to retain and hire, and to create new jobs in every part of our country.”

Boris Johnson is preparing to unveil a new “Contain Framework” designed to show workers the virus is under control in their local area.

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UK unemployment

UK unemployment map (Image: EXPRESS.CO.UK)

The Prime Minister hopes the move will tempt people back into the office, alongside his whack-a-mole strategy of taking extra measures to try to prevent a feared second wave of the deadly disease.

This will include a new grading system when it is safe to travel. The public will still be urged to use public transport between 9am-4pm, rather than at rush hour and to cycle or walk to work if it is possible.

The Governor of the Bank of England Andrew Bailey has already set out a three point plan to bolster the economy.

Mr Bailey was understood to be shocked by deserted town and city centres and fears they are holding the economy back.

He has urged the Government to start lifting the remaining lockdown restrictions, get people back on public transport and get people back to work – warning the country will be in a recession for a long time if it does not heed his words.

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