October’s employment figures, according to the Chancellor Rishi Sunak are ‘testament to the success of the furlough scheme’. The other way of looking at the figures, released this morning, is that they show why the furlough scheme should have been wound up months ago, rather than at the end of September.
The number of people on payroll in October rose by 160,000 to 29.3 million in spite of furlough ending. The unemployment rate fell by 0.5 per cent. The employment rate, at 75.4 per cent, is now just 1.1 percentage points lower than it was in the three months leading up to the pandemic. It is astonishing because at the moment the furlough scheme ended, it was still paying the wages of 1.14 million people. Not only do these people appear to have been gulped up by the labour market, but extra jobs have been created on top.
We can only wonder how much extra economic growth might have been created had this labour source been freed up earlier
As we know, employers have been screaming about labour shortages for months, especially in sectors like hospitality which have relied on large numbers of staff from eastern Europe in recent years – many of whom have returned home either as a result of the pandemic or Brexit.
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