1 in 5 businesses threaten to axe jobs as furlough tapers off

1 in 5 businesses threaten to axe jobs as furlough tapers off
18 per cent told the chamber they were likely to make staff redundant in response to being asked to contribute up to 20 per cent of their furloughed staff’s wages
// One in five businesses said they are likely to make staff redundant as furlough support changes
// From today, employers are being asked to contribute 20 per cent of furlough staff wages
// The BCC is warning that the latest reduction in furlough aid will lead to thousands of job losses

Around one in five businesses have said they are likely to make staff redundant as a result of the changing furlough fuels, the British Chambers of Commerce (BCC) has said.

From today (August 1), employers are being asked to contribute 20 per cent of their furloughed staff wages, an increase of 10 per cent from last month.

Out of 250 businesses with employees still on furlough, surveyed by the BCC, 18 per cent told the chamber they were likely to make staff redundant in response to being asked to contribute up to 20 per cent of their furloughed staff’s wages, while a quarter said they would aim to reduce hours or move staff to part-time working patterns.


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The survey, which was conducted between July 5-23, revealed unless these employees are made redundant, or brought back to work, keeping them on furlough through the month will “cost businesses millions of pounds”.

The news follows official data showing that 1.9 million people were still furloughed by the end of June, a reduction from 2.4 million a month earlier.

As a result, the BCC is warning that the latest reduction in furlough aid will lead to thousands of job losses and is calling on ministers to ensure those impacted can retrain.

“Today’s changes to the furlough scheme will likely result in many thousands of people being released back into the labour market, as employers who are still struggling to recover from the recession are forced to make redundancies and cuts to working hours,” the BCC head of people policy Jane Gratton said.

“With widespread skills shortages across the economy, some will find new jobs where their skills are in demand, while others will need to retrain for opportunities in a different sector.

“Whether furloughed workers are returning to the workplace or the wider labour market, it is crucial that employers and the government give them the support and training they need to be re-engaged and productive.

“Alongside rapid retraining opportunities, the government should extend the kickstart scheme into 2022, and expand it to enable older workers to gain new skills and experience.”

According to the survey, a little under 15 per cent said they would have to cancel investment plans but, in better news for the British workforce, almost 40 per cent said the change would have no impact on the business.

A government spokesman added: “Our Plan for Jobs is working, and has supported the livelihoods of workers throughout the pandemic with two million fewer people expected to become unemployed than forecast last year.

“We deliberately went along with our support, with furlough in place all the way through to the end of September, and three million workers coming off the scheme since March.

“As the economy rebounds, it’s right that furlough support is tapered, so that we can focus support elsewhere.”

with PA Wires

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