British companies have planned for nearly 500,000 redundancies in the first five months of the Covid-19 crisis, according to figures from the government’s Insolvency Service. These figures come from forms that employers must send to the service if they plan to make 20 or more lay-offs.
The pandemic’s true cost to jobs is likely to be much higher.
The most recent figures – 58,000 redundancies planned in August – are lower than previous months, but still 150 per cent higher than the previous year. This was in the month of loosened lockdown measures, Eat Out to Help Out, and other boosts to the hospitality sector.
Now cases are rising again, and the country is a patchwork of local lockdowns. The furlough scheme finishes at the end of this month, and the replacement scheme is far less generous – only designed to protect “viable” jobs.
Indeed, the New Statesman can reveal that less than half of workers on furlough expect to return to their current employer once the scheme ends.
Only 45 per cent of those who are employed but furloughed believe they will return to work in October, according to exclusive polling conducted by Redfield and Wilton Strategies for the New Statesman on 22-23 September (before the Chancellor’s follow-up Job Support Scheme was announced).
Of this sample, 60 per cent agreed the furlough scheme should be extended for all businesses beyond October, in the event of a second wave.
Although it will only be possible to tell how successful the next employment scheme is in future months of redundancy figures, Labour has calculated that it will be cheaper for some firms to lay-off two part-time staff and keep on one full-time staffer under the new system. This could result in thousands of lay-offs (though Rishi Sunak argues this calculation doesn’t account for the costs of redundancy, recruitment, and training).
The total number of weekly hours worked in the three months to April 2020 was down a record 8.9 per cent on the previous year – and over the course of the year, the average actual time worked per week has fallen by 5.8 hours.
The number of people claiming benefits, whether to supplement a low income, or because of unemployment, reached 2.7 million in August 2020.
Bad as they are, today’s new redundancy figures alone do not expose the devastating and ongoing impact on jobs of Covid-19, lockdowns and the withdrawal of the government’s most powerful economic countermeasure.