Fears raised as figures show 76,000 people are furloughed in The News' area

More than eight million jobs have been furloughed across the country, with £11.1bn claimed so far through the Coronavirus Job Retention Scheme.

Despite the incentive to keep staff, including a £1,000 one-off payment for every previously furloughed employee brought back and still employed at the end of January next year, The Federation of Small Businesses, a trade body, found that about a fifth of companies expected to cut jobs in the next three months.

FSB development manager for Hampshire and Isle of Wight Nicola Bailey said: ‘Business owners are in the middle of the worst downturn on record. The Government has stepped-up with a raft of support mechanisms to help them through. It’s critical that these mechanisms are not suddenly removed, and that gaps in support are plugged quickly.’

One firm, Quattro Foods, a food manufacturer in Portsmouth, was forced to furlough 30 of its 37 workers when it saw its sales plummet.

Sam Bowers, managing director, said: ‘We have October looming large, a watershed moment where the furlough scheme will come to an end and business and property rates will start being paid again.’

Hampshire Chamber chief executive Ross McNally said: ‘The furlough scheme has been a vital safety net for tens of thousands of people in Portsmouth and millions more across the UK. It has prevented mass redundancies, protected cashflow and helped to keep firms afloat as consumer demand has slumped during lockdown.

‘As we are still a long way from business as usual, we call on the government to ensure there is some continuing flexibility in the subsidy approach. The situation is precarious – while activity remains depressed, there could well be further job losses, especially if any areas suffer local lockdowns because of a rise in infections.’

Portsmouth South MP Stephen Morgan has called for the government to provide better, targeted support.

He said: ‘The government’s one size fits all approach is continuing to lead to job losses that simply should not be happening. We are already experiencing the worst excess death rate in Europe. We’re now on track for the worst recession too. The government has got to do better, and I will be calling on the government for what its plans are to support the people of Portsmouth through this economic crisis.’

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Official figures released last week showed the UK has now entered a technical recession, with the UK economy (April to June 2020) reaching a record fall of 20.4 per cent – worse than any other country in Europe.

The Coronavirus Job Retention Scheme allowed companies to keep staff on the payroll and put them on temporary leave, with the government paying 80 per cent of the staff member’s wages. However the scheme, which closed to new entrants on June 30, has begun to be phased out and from August 1, employers are required to pay employer national insurance and pension contributions. In September, employers will also be required to pay 10 per cent of wages and the government will contribute 70 per cent. In October, the employer contribution will increase to 20 per cent with the government contribution falling to 60 per cent. The scheme will close on October 31.

Thinktank the Institute for Public Policy Research released research this week that estimated three million workers will still be relying on the government’s furlough programme when it ends. Its paper ‘Rescue and recovery: Covid-19, jobs and income security’ estimates that one million of these jobs will be lost, but says that two million could be saved if the government extends the furlough scheme or adapts it to encourage employers to take back staff on a part-time basis.

It said: ‘A result of the huge uncertainties facing any government operating in this pandemic, policymakers must be ready to act or change course depending on economic and public health developments. It is clear the government response to the unemployment crisis so far, welcome though it is, is not well calibrated to the prospect of ongoing impacts of the virus or a deep recession.’

Business expert Colin Bielckus, who runs Outsourced Finance Director, from Whiteley, said: ‘We have heard that the economy is now in a recession so there must be major concerns, especially after yet another retailer has announced thousands of redundancies.

‘As the furlough scheme comes to an end there are sectors that won't be affected at all and there will be sectors that will be massively affected, such as travel and tourism. Ferries in Portsmouth for example could be affected and travel businesses in the city.

‘Without wishing to be pessimistic, I think there are a lot of things that people have got to be concerned about.’

A message from the Editor, Mark Waldron

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