Chancellor Rishi Sunak says he is ‘cautiously optimistic’ that the end of furlough will not cause a major spike in unemployment as he says it ‘will not be anywhere near as bad as people feared’
- Government’s £70bn furlough programme came to a close at end of September
- Economists warned end of the programme would cause spike in unemployment
- Rishi Sunak is ‘cautiously optimistic’ the end of furlough will not result in spike
- He said the ‘end of furlough will not be anywhere near as bad as people feared’
Rishi Sunak today revealed he is ‘cautiously optimistic’ that the end of furlough will not result in a major spike in unemployment.
The Government’s £70billion wage support programme closed at the end of September.
An estimated one million workers were still on the scheme when it finished, prompting fears of a wave of job losses.
But Mr Sunak said this afternoon he believes ‘the end of furlough will not be anywhere near as bad as people feared’.
He told peers on the Economic Affairs Committee that levels of redundancy notices in September were actually ‘far lower’ than they were last summer.
Rishi Sunak today revealed he is ‘cautiously optimistic’ that the end of furlough will not result in a major spike in unemployment
The Government’s £70billion wage support programme closed at the end of September. An estimated one million workers were still on the scheme when it finished, prompting fears of a wave of job losses
Ministers had warned that job losses would be ‘part of the process’ when the 18-month coronavirus support scheme ended.
Mr Sunak was grilled on the impact of ending furlough and he said the early signs suggested there has been a ‘pretty positive outcome’.
However, he conceded the Government is still waiting to see the official job market data covering the end of September.
He told the committee that the Treasury had been ‘encouraged’ in the run up to the ending of furlough because the number of people returning to employment was ‘very high’ which was a ‘good sign’.
Mr Sunak said the department had conducted surveys asking furloughed employees if they had received a firm date for returning to work.
‘Again, anecdotally and not completely statistically representative, but those were all indicative of a pretty positive outcome at the end of furlough,’ he said.
The Chancellor said that while there were approximately one million people still on furlough at the end of September, half of them were on ‘flexi-furlough’ and so were ‘already at their workplaces working’.
Mr Sunak said: ‘We haven’t seen a tick up significantly in redundancy notices which is another thing we have been tracking.
‘So the levels of redundancy notices in September were far lower than last summer for example when we introduced employer contributions into furlough and obviously what you are seeing at the moment are record numbers of job vacancies.
‘If you look at the ratio of job vacancies to unemployed, which you can match by sector… it gives you a sense of where the labour market tightness is.
‘I think, broadly, we have had about 10 months of rising employment numbers, eight months of falling unemployment. We still haven’t seen the numbers from the end of September.
‘But broadly what I am seeing and when I talk to businesses and all the informal work that we do would lead one to be cautiously optimistic that the employment outcome post the end of furlough will not be anywhere near as bad as people feared and thankfully there is a robust labour market in place to absorb people back in if they are not able to go back to their places of work.’
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