‘Impossible’ to know how many people will lose jobs as furlough ends, minister admits

‘People’s jobs will be created just as some have very sadly been lost, that is the part of the process of ending this crisis’

A minister has admitted it is “impossible” to know how many people will lose their jobs this winter as the government today ends the furlough scheme 18 months after it was introduced.

Simon Clarke — the chief secretary to the Treasury — added that job losses were “part of the process” , but stressed that at “some point” the emergency measure which has supported millions of jobs had to end.

Introduced in March 2020 by the chancellor Rishi Sunak, the furlough scheme originally paid 80 per cent of workers’ wages to a maximum payment of £2,500 each month, with the support being wound down over the summer.

It comes amid warnings the country faces a “tidal wave” of job losses as the scheme closes, while other support, such as the universal credit £20-per-week uplift, supporting low-income families, also ends.

Uncertainty remains for the future of around one million workers who were expected to be still receiving support through the financial scheme at the end of September, according to the latest Office for National Statistics estimates.

Asked on Sky News how many job losses there would be, Mr Clarke said: “It’s impossible to put an estimate on. Obviously there will be a variety of outcomes, I don’t have an estimate with me today.

“There will be some job losses, but there are also vacancies in the labour market for people to move towards and a huge range of support to help them do that.

“Furlough has protected 11.6 million jobs in total during the course of its time — at some point you have to end these emergency measures, they are extraordinary and they are extraordinary for a reason.

He went on: “People’s jobs will be created just as some have very sadly been lost, that is the part of the process of ending this crisis and going back to normal.”

According to new research published last night by the Institute for Fiscal Studies (IFS) workers in London are in the “most precarious position”, having been more likely to be furloughed over the summer than other parts of the country.

Coupled with higher rates of redundancy and lower rates of re-employment, the fiscal watchdog said: “These challenges compound to heighten the risk of longer-term unemployment in the capital.”

The IFS said employees in the capital accounted for 16 per cent of the redundancies made during the pandemic while 44 per cent of those who lost their jobs found new work within six months – compared with 58 per cent of workers for the rest of the country.

Mr Clarke also defended the imminent cut to universal credit, describing it as an “enormously expensive mechanism”, adding: “Had we maintained this uplift, we’d be talking a penny on income tax”.