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Firms and unions urge more job support as lockdowns spread and furlough ends

Tom Belger
·Finance and policy reporter
·2-min read
A man holds an umbrella as he walks along the River Mersey with the Liverpool skyline amid the outbreak of the coronavirus disease (COVID-19) in Seacombe, Britain, October 12, 2020. REUTERS/Phil Noble
Liverpool's skyline as business chiefs say UK job support should be extended. Photo: REUTERS/Phil Noble

Business and union chiefs are demanding more UK government support for firms and workers as the furlough scheme is brought to an end.

The furlough scheme of wage subsidies closes on 31 October. UK chancellor Rishi Sunak has caved into pressure to introduce a replacement job support scheme, make it more generous and extend it to areas hit hard by lockdown restrictions.

But the finance minister still faces pressure to extend support amid tightening local COVID-19 restrictions across the country, fading hopes of economic recovery and business fears of another strict nationwide lockdown.

Mike Cherry, national chair of the Federation of Small Businesses (FSB), said the furlough scheme had been a “resounding success” in stopping job losses, but warned 30% of employers were now planning redundancies.

READ MORE: One in five young people jobless as unemployment ‘already at 2.5 million’

“If we see tougher restrictions, we are asking the government to dial up the job support scheme even further to provide more support for the small businesses that are not legally required to close but are facing a collapse in consumer demand,” he said.

He also called for longstanding gaps in support to be filled, urging more support for company directors, newly self-employed workers and struggling sectors like events, culture, the arts and tourism. Such industries have had a “torrid seven months,” he said.

WATCH: What is the job support scheme and how has it changed?

Other proposals include cutting employers’ national insurance bills, and a new ‘Kickstart startup’ scheme with higher subsidies to help individuals to launch firms.

The Trades Union Congress (TUC) is also demanding wage subsidies under the new job support scheme be as high for employees as the furlough scheme it replaces.

It backed calls for more help for the self-employed, hard-hit sectors like aviation, retail, hospitality and the arts, and higher sick pay for those self-isolating.

READ MORE: Stronger-than-expected GDP data curbs losses in European markets

Frances O’Grady, general secretary of the TUC, said: “Stopping the devastation of mass unemployment must be the government’s top priority.

“But from this weekend, the financial support for workers and businesses will fall, despite the public health crisis getting worse. And that will mean employers will lay people off.”