Manufacturers seek longer UK furlough as job losses loom

LONDON • UK manufacturers called on Chancellor of the Exchequer Rishi Sunak to extend his flagship furlough programme amid warnings that almost a third of companies plan to cut jobs in the next six months.

A survey of 226 employers by industry group MakeUK found 62% want the programme, under which the Treasury has paid as much as 80% of wages, to be extended beyond the end of October. With 30% of respondents saying they intend to cut workers, extension of the plan could avert a “wave of redundancies”, the group said.

“The protection of key skills should be a strategic national priority as this will be the first building block in getting the economy up and running,” MakeUK CEO Stephen Phipson said, urging “the greatest support possible” from the government.

With Germany extending its equivalent programme until the end of 2021, and France also considering an extension, Sunak has come under pressure to continue to subsidise wages beyond Oct 31, when the programme is scheduled to end.

“The starting point for this should be an extension of the Job Retention Scheme to those sectors which are not just our most important but who have been hit hardest,” Phipson said. “Failure to do so will leave us out of step with our major competitors and risk a loss of key skills when we can least afford to do so.”

Yesterday, a parliamentary committee called on Sunak to extend furlough for the arts and leisure sectors, saying they both face “mass redundancies” if support is discontinued. Current restrictions on audiences and activities prevent them from returning to business as usual, the Digital, Culture, Media and Sport Committee said.

“If furlough is cut off in October, not only will mass redundancies follow but we can expect many cultural organisations to go out of business, never to return,” committee chairman Julian Knight said in a statement. “We should not allow the arts and leisure sectors that contribute amazing value to our economy to become hostages to fortune as a result of failure to act now before it is too late.”

The Opposition Labour Party has criticised the UK’s “one-size fits all” approach, and economists have warned the premature removal of support threatens to send unemployment above three million before the end of 2020. — Bloomberg