New workers continue to be furloughed even as economy re-opens

·Senior City Correspondent, Yahoo Finance UK
·2-min read
FILE - In this file photo dated Tuesday, March 17, 2020, Britain's Chancellor Rishi Sunak gives a press conference about the ongoing situation with the COVID-19 coronavirus outbreak inside 10 Downing Street in London.  With British Prime Minister Boris Johnson hospitalized and in intensive care Wednesday April 8, 2020, after contracting the new coronavirus, Sunak is among key players in Johnson's Cabinet who will be directing Britain's response to the highly contagious COVID-19 coronavirus, while their leader is being treated. (AP Photo/Matt Dunham, FILE)
Britain's chancellor Rishi Sunak. (Matt Dunham/AP Photo)

Workers continue to be placed on furlough even as the UK’s economy begin to reopen.

Data from the Treasury, published on Tuesday, showed that 1.1 million employers had furloughed 9.2 million of their staff by 21 June. It means 100,000 additional workers have been placed on furlough over the last week.

The true figure of newly furloughed workers may be even higher as the data does not break out the number of workers taken off the scheme. Non-essential shops were allowed to re-open from 15 June, which is likely to have seen some staff asked to return to work. A survey of Brits done by Bank of America over the last week found 24% were off work due to coronavirus, down from a peak of 35%.

Read more: Government told to extend furlough scheme into 2021 to prevent 'tsunami of job losses'

The rise in furloughed workers comes as the cut-off for the job retention scheme looms. Companies are only able to add new workers up until 30 June.

The weekly rise in furlough numbers is the smallest increase since the Treasury began publishing figures. However, the increase is likely to worry the government nonetheless. Many experts fear that the furlough scheme is simply delaying job losses and the continued rise in furloughed workers suggests the scale of eventual lay offs could be huge.

A survey by YouGov this week found 65% of furloughed workers worry they will lose their job as a result of COVID-19. That compares to 39% of workers overall.

Steve Turner, assistant general secretary of Unite, told parliament’s Business, Energy and Industrial Strategy select committee last week he was concerned about a “tsunami of job losses” when the furlough scheme comes to an end.

Read more: Government breaks debt and borrowing records as COVID-19 costs soar

Turner and other union leaders have urged the government to extend the programme to allow businesses more time to recover and potentially avoid job losses.

The job retention scheme is currently due to end in October, with employers asked to contribute to the cost of the scheme from August.

Treasury figures show the furlough scheme has so far cost the government £22.9bn ($28.5bn). It has contributed to a surge in government borrowing that has pushed government debt above the size of the UK economy for the first time since the early 1960s.