Concern for 80,000 Scots jobs in jeopardy as furlough ends next week

The numbers who continue to be compensated under the lifeline Coronavirus Job Retention Scheme have fallen by 18% a month since May.

If the numbers continue to fall at the same rate, it could leave 78,335 Scottish jobs still furloughed when the scheme ends on September 30.

There are now growing calls to extend the furlough scheme to prevent a risk of rising redundancies.

The UK government say that as many as 900,000 Scots were furloughed during the pandemic.

It has been credited with stopping a spike in unemployment although there are concerns that as of June it had cost UK taxpayers almost £50bn.

Scots economic analysts have warned that one in 25 businesses expect to make redundancies in the coming four months.

The respected independent research body, the Fraser of Allander Institute says that with a large share of jobs still supported, and the end of the government furlough scheme looming at the end of September, there remains a "high degree of uncertainty" in the labour market.

They said: "Much of the concern is among those jobs ‘frozen’ by the furlough scheme and what happens to these employees once businesses are no longer supported to employ them."

It comes as Citizens Advice Scotland warned that over 1.4m in Scotland ran out of money before pay day in the last year.

Polling by YouGov for the charity found that 32% of people ran out of money either ‘always’, ‘most of the time’, or ‘sometimes’ .

CAS said it showed the extent of financial insecurity across the country with the furlough scheme set to end, the cost of living rising with higher fuel bills, and a £20-a-week cut to Universal Credit.

The person remaining on furlough is typically male and older, furloughed by a small firm, and while London has the highest figures, the highest in Scotland are in and around Glasgow.

Age Scotland has raised concerns that older workers will be hardest hit when furlough ends.

Some 36% of the Scots on furlough were aged over 50.

Over 65s have the highest take-up of furlough of all age groups with 8% and 9% for female and male employment in comparison with the 5% and 6% average. Further research suggested that 31,000 workers aged 50 or over were made redundant between May and July in the UK.

The unemployment rate for 50 to 64-year-olds has increased from 2.8 per cent to 3.4 per cent since the start of the pandemic, an analysis by the Centre for Ageing Better showed.

Emily Andrews of the Centre for Ageing Better, said: “With the furlough scheme ending, there is a real risk that we could see a fresh wave of redundancies among this group.

A previous ONS study revealed that 3 in 10 older workers on furlough believed there is a 50% or higher chance they will lose their job when the scheme ends.

Some MPs are raising concern about the withdrawal of support for jobs and businesses and have called for the furlough scheme to be extended.

Martyn Day, the SNP MP for Linlithgow and East Falkirk said:"There is now a very real danger that Tory complacency on jobs could result in rising redundancies....

"I am urging Rishi Sunak to ensure the UK government does not withdraw support for jobs and businesses abruptly and prematurely. This is especially important, given the risks of covid this winter and the fragile state of the UK economy.

"Too many people have been left behind by Westminster throughout the pandemic. The UK government must not create a Tory unemployment crisis, which could see thousands of people made redundant and left on the scrap heap, at the same time that Tory ministers raise taxes and slash Universal Credit by £1040."

Drew Hendry, fellow SNP MP for Inverness, Nairn, Badenoch and Strathspey added: "The situation is getting extremely concerning. The continued complacency on jobs could result in rising redundancies in our region.

The SNP has raised concern that the hospitality and service industry could be hardest hit.

Across the UK some 15% of eligible jobs supported by furlough were in arts, food and entertainment with a further 15% in accommodation and food services.

SNP business spokesman Stephen Flynn MP added: "The Chancellor must not pull the rug out from under the economy by cutting support for jobs and businesses - risking a Tory unemployment and poverty crisis in the winter.

"Brexit has already hit the economy hard and the UK already suffers from the worst levels of poverty and inequality in north west Europe. It makes no sense for the Tory government to starve the economy of support and threaten people's jobs and livelihoods.

"Too many people have been left behind by the UK government during the pandemic, and it is increasingly clear that there will be no fair recovery at Westminster. The only way to keep Scotland safe from Tory cuts is to become an independent country, with the full powers needed to build a strong, fair and equal recovery."

The UK government has largely footed the bill for furloughed workers, but since July 1 employers were asked to contribute 10% towards the wages of furloughed workers for hours their staff do not work.

That amount was to rise to to 20% in August and September.

That was expected to make the scheme less appealing to employers, although firms are relying on it less as the economy reopened during the summer.