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Fears many thousands could lose jobs as furlough scheme changes

·2-min read
From Sunday, employers will have to contribute 20 per cent towards the wages of furloughed staff (PA)
From Sunday, employers will have to contribute 20 per cent towards the wages of furloughed staff (PA)

Fears have been growing many thousands of people could be made redundant as the furlough scheme gradually phases out.

From Sunday, employers will have to contribute 20 per cent towards the wages of furloughed staff which rises from 10 per cent.

However, a survey suggests one in five companies still using the furlough scheme are planning to let staff go as a result.

The Treasury is also preparing to fully end the scheme by October.

The British Chamber of Commerce (BCC) polled 250 businesses with employees still on furlough.

Of those, 18 per cent said they were now more inclined to make staff redundant while 25 per cent would decrease working hours or move staff to part-time patterns.

Despite these concerns, almost 40 per cent said the change would have no impact on the business.

Official data shows 1.9 million people were still furloughed by the end of June, a decrease from 2.4 million a month earlier.

Jane Gratton from the British Chamber of Commerce (BCC) said: "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.

"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."

It comes after Rishi Sunak was told to apologise for “prematurely” withdrawing the furlough scheme.

Ahead of Mr Sunak’s visit to Edinburgh Glasgow and Fife this week, SNP’s shadow chancellor Alison Thewliss urged him to explain “why he is short-changing us on youth jobs” and going ahead with Universal Credit cuts that will “plunge half a million people into poverty”.

Ms Thewliss called on Mr Sunak “to apologise to the people and businesses here for withdrawing furlough support prematurely and risking thousands of unnecessary redundancies”.

She went on: “I would urge Rishi Sunak to explain to the people of Scotland why he is short-changing us on youth jobs, and ploughing ahead with Universal Credit cuts that will undermine the Scottish Child Payment and plunge half a million people into poverty, when at the same time he can find £250 million for a UK Government yacht.

“It is increasingly clear that the only way to keep Scotland safe from Tory austerity is to become an independent country with the full powers needed to protect jobs and secure a strong, fair and progressive recovery.”

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