One in Four UK Companies Plan to Lay Off Staff if Furlough Ends Soon: Survey

General view of the Canary Wharf financial district, following the outbreak of the CCP virus pandemic, in London, on May 5, 2020. Marika Kochiashvili/Reuters

A quarter of British businesses expect to lay off staff if Finance Minister Rishi Sunak doesn’t extend the job furlough scheme that’s due to expire at the end of April, Britain’s national business network said on Thursday.

The British Chambers of Commerce (BCC) said businesses had been “pushed to the brink” by the restrictions imposed due to the CCP (Chinese Communist Party) virus pandemic, and called on the government to set out a “clear roadmap for reopening” and extend financial support for businesses throughout 2021.

In the BCC’s latest survey of more than 1,100 businesses, in addition to laying off staff, a quarter of firms said they would have to reduce employee hours if the support was removed. Almost a quarter said they only had enough money to survive for less than three months, and 61 percent of companies reported a fall in sales in the previous three months.

“It is vital that the UK government keeps financial support going until firms can reopen and rebuild,” BCC Director General Adam Marshall said in a statement.

“Pulling the plug now would be a huge mistake and would be akin to writing off the billions already spent helping firms to survive.”

The BCC said more than two-thirds of the businesses surveyed between Jan. 18 and Jan. 31 said the government’s furlough scheme has been “very effective.” Only 4 percent said it was not effective.

“Firms are desperate to start trading again so they can boost revenue and start thinking about the future,“ Marshall said. ”To do so they need to see a clear, evidence-based plan for reopening, and they need time to get back on their feet without unnecessary additional taxes, and the security of knowing that government will once again support them should we see additional restrictions imposed at any point.”

Sunak is due to deliver his annual budget on March 3 and has promised to provide more support for jobs hit by the CCP virus pandemic.

But he is also mindful that spending related to the CCP virus has already pushed Britain’s budget deficit to its highest since World War II.

The furlough scheme cost £46 billion ($64 billion) up to mid-December last year—the government’s most expensive single economic support measure.

Official data released on Thursday showed 20 percent of private-sector employees were currently furloughed as of Feb. 11, up from 18 percent two weeks earlier, though below the 30 percent who were on leave during the first lockdown.

Furlough Extension

Britain entered a third national lockdown last month, which forced schools and most businesses to close to the public, although staff can continue to work on-site if there’s no alternative.

While new virus infections have fallen by more than three-quarters since a peak at the turn of the year, the government remains concerned about the risk posed by new variants of the disease and has not yet eased national lockdown rules.

Almost 2 million people in the UK had been either fully furloughed or unemployed for a minimum of six months as of January, according to a report (pdf) from living standards think tank Resolution Foundation released on Wednesday.

In the report titled “Long Covid in the Labour Market,” the Foundation recommended that the government keeps the furlough scheme in place for at least two months after lockdown restrictions start to ease to give the labour market time to redeploy workers and consult on redundancies.

It also recommends that the scheme is extended even longer for specific sectors, such as hospitality and leisure, which have been most heavily impacted by the curbs.

The scheme should then be phased out, the report says, with a gradual increase in the minimum hours an employee needs to work for the support to kick in.

In addition, the Kickstart scheme should be extended for the long-term unemployed and “a range of policies to promote hiring, job creation, and to facilitate career changes where that is appropriate” should be provided.

The government said it will be setting out plans to protect and create jobs in the next budget.

“Throughout this crisis, we have done all we can to support jobs and livelihoods, spending over £280 billion [$391 billion] in response to the pandemic,” a Treasury spokesperson told The Epoch Times in an email.

“We’ve already extended our furlough scheme through to April so that people have certainty that help is in place.

“We will continue to invest in protecting and creating jobs through the remainder of the pandemic and through the recovery, and we will set out further details via the next stage of our Plan for Jobs at the upcoming budget.”

Reuters contributed to this report.