Lockdown forces another 900,000 jobs onto furlough

Tim Wallace
·3 min read
Cardiff - Matthew Horwood/Getty 
Cardiff - Matthew Horwood/Getty

Lockdown forced businesses to furlough another 900,000 jobs last month as tough Covid restrictions slammed the brakes on the economy.

It comes as Rishi Sunak, the Chancellor, is expected to use next week's Budget to extend the Coronavirus Job Retention Scheme (CJRS) beyond its planned end date of 30 April because the virus and lockdowns are lasting for longer than previously anticipated.

A total of 4.9m wage bills were paid by the Treasury under the furlough scheme at January’s peak, surging from below 4m for most of December when more businesses had been allowed to open.

It took the number paid to stay at home to its highest level since the end of July, as the most recent lockdown had a more serious impact on jobs and businesses than in November.

That number slid to 4.7m by the end of last month, according to data from HMRC, as companies work out new ways to operate with the restrictions.

At the same time the Office for National Statistics found retailers struggling as footfall last week was down to just 38pc of usual pre-Covid levels.

Retail parks, which tend to have large open spaces, have almost two-thirds of their usual visitor numbers, while shopping centres and high streets have fewer than one-third of their normal levels.

Credit and debit card payments have crept up since the start of the year but remain around one-quarter below pre-pandemic levels.

The numbers getting out of the house remain low. Road traffic volumes are down at 70pc of pre-Covid levels, with car traffic down below two-thirds, and only heavy goods vehicles numbers back up to levels seen last February.

The ONS found 72pc of businesses are currently trading, down from 84pc in December and back at levels last seen in July at the tail end of the first lockdown.

Of those workers on the scheme, 3.2m are fully furloughed and 1.3m are partially furloughed, HMRC said, with the remainder not known.

The hospitality industry remains hardest hit with more than 1.1m on furlough, followed by almost 940,000 in retail, wholesale and vehicle repair.

The admin and support industry accounts for 387,000 more, with arts, entertainment and recreation on just over 315,000 and manufacturing close behind.

By region, London accounts for the largest slice with more than 700,000 on furlough.

Younger workers are most likely to be furloughed, with 29pc of eligible under-18s using the scheme and 18pc of those aged between 18 and 24 on furlough.

This falls further to a low of 11pc of eligible 40-59 year olds, before edging up again to account for 14pc of over-65s.

“If the Government tapers the support on offer, businesses will need to make difficult decisions about whether they can afford to keep staff on,” said Sarah Coles at Hargreaves Lansdown.

“The Government has already tried this once, and because the taper kicked in at a time of widespread uncertainty, it sparked record redundancies. This time we have a roadmap out of the crisis, but there are no guarantees we won’t have to change course, so any potential tapering needs to be cautious and flexible, so people aren’t left high and dry again.”