Mass unemployment fears because of virus

More than 3,500 British firms have told the government they planned to cut more than 300,000 jobs between June and July, despite the furlough scheme keeping millions of jobs going.

Any company planning 20 or more redundancies has to notify the government on a special form of how many posts they plan to lose and it is the data from these forms which has produced the 300,000 total.

Higher

But firms planning to shed less than 20 posts do not need to notify officials so the overall number of jobless is likely to be higher.

A recent survey by the Chartered Institute of Personnel and Development (CIPD) and recruitment firm Adecco showed a 50% increase in the number of firms expecting to announce redundancies between July and September.

Huge rise

Now experts fear a huge rise in jobless figures when the furlough scheme ends on October 31st.

Official unemployment figures are not showing a big increase in the jobless totals yet, but they are typically a few months behind after all the figures have been collated.

But the Office for Budget Responsibility has already estimated that the worst case scenario will be an unemployment figure of four million next year.

Useful

Resolution Foundation senior economist Nye Cominetti said: “The reason this data is so useful is that all our other official data is coming through with a time lag,

“This puts policy makers in a really challenging situation.

The main government support schemes are coming to an end, but in terms of the official data, we still don’t know how big the jobs crisis is, or where we’re heading as we move into the autumn.”

Weakest

CIPD advisor Gerwyn Davies said: “This is the weakest set of data we’ve seen for several years. Until now, redundancies have been low – no doubt due to the Job Retention Scheme – but we expect to see more redundancies come through this autumn, especially in the private sector once the scheme closes.

“Hiring confidence is rising tentatively, but this probably won’t be enough to offset the rise in redundancies and the number of new graduates and school leavers entering the labour market over the next few months.”

Support

A government spokesman said: “We are continuing to support livelihoods and incomes through our Plan for Jobs to ensure that nobody is left without hope or opportunity.

This includes a £1,000 retention bonus for businesses that can bring furloughed employees back to work.

“We are also creating new roles for young people with our Kickstart scheme, creating incentives for training and apprenticeships, and supporting and protecting jobs in the tourism and hospitality sectors through our VAT cut and last month’s Eat Out to Help Out scheme.”