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Tuesday December 7th, 2021 7:41AM

Furlough total in UK falls to new low as many return to work

By The Associated Press
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LONDON (AP) — The number of workers still on furlough in Britain has fallen to its lowest level since a salary support program was first introduced at the outset of the coronavirus pandemic 18 months ago, official figures showed Thursday.

HM Revenue and Custom, which compiles the data, said that 1.6 million people remained on the government's support plan at the end of July, down 340,000 on the month before.

The Coronavirus Job Retention Scheme, which has kept a lid on unemployment during the pandemic despite the worst recession in Britain for over 300 years, is set to end at the end of September and unions are urging the government to come up with fresh support — particularly for sectors like aviation which are still struggling in the face of coronavirus restrictions.

Under the program, the government paid 80% of the salaries of those workers unable to work because of lockdown measures. The program helped support around 12 million people but the number has been falling as lockdown restrictions have been lifted over recent months.

July was the first month that employers had to pay 10% of the salaries of their furloughed workers, giving them an incentive to bring staff back, or end their employment. This went up to 20% for August and September.

“It’s fantastic to see furlough levels at their lowest since the start of the pandemic, with young people in particular getting back to work and kickstarting their careers as the U.K. gets back to business,” said Treasury chief Rishi Sunak.

According to the latest numbers, the over-65s are the most likely employees to still be on furlough as young people took up their old jobs following the reopening of some of the hardest-hit sectors in the economy, such as hospitality. Also, furlough levels remained highest in London.

The furlough plan was the most expensive support measure the government introduced to cushion the blow of the pandemic. The government has paid a total of 68.5 billion pounds ($95 billion) to furloughed employees.

Though the plan kept unemployment at around 5%, lower than it otherwise would have been, there are concerns that the end of the support will lead to a spike over coming months especially if the pandemic finds fresh legs and the government reintroduces lockdown restrictions.

“The number of people coming off furlough over the summer has slowed to a trickle, as some firms and sectors — notably overseas tourism — struggle to return to pre-pandemic levels of activity," said Charlie McCurdy, an economist at the Resolution Foundation think-tank. “As a result, up to a million employees could still be on furlough when the scheme closes at the end of this month."

And Gary Smith, general secretary of the GMB union, warned that an “economic cliff-edge” looms that risks choking the recovery.

“There needs to be a package of support for harder-hit industries such as aviation, which continues to be directly affected by travel restrictions set by the government," he said.

___

Follow AP’s pandemic coverage at: https://apnews.com/hub/coronavirus-pandemic

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy
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