Furlough

Look past the headline statistics and you’ll see economic reality starting to infiltrate the labour market. Today’s employment figures from the Office for National Statistics mark very little movement from the previous quarter, with employment at 76.4 per cent (down 0.2 per cent on the previous quarter) and unemployment at 3.9 per cent (unchanged from the previous quarter, still hovering at a record-low level). Yet today also marks the biggest decrease in UK employment for a decade, since May 2009 in the wake of the financial crash. For many workers, being temporarily away from paid work is likely to become permanent How can this be? The official figures from the

The number of people claiming unemployment benefits in Britain rose by over 856,000 to 2.1 million in April, the first full month of the lockdown. Figures from the Office for National Statistics reveal that the number claiming benefits due to unemployment has increased by nearly 70 per cent. This marks an unbelievable u-turn from the start of the year, when UK employment figures were hovering at record highs. These figures do not include ‘the furlough effect’: those who are still counted as employed, paid by the Government to stay home and wait for the green light to return to work. Today’s numbers, as bad as they are, don’t reflect the number of

Who are we kidding? If you are still furloughed through July, August, and September, the chances are that your job isn’t on hold as you wait for lockdown to gradually be lifted or for your company to get back to normal levels of demand. In truth, you have probably been fired. It’s just that no one got around to telling you yet. Rishi Sunak’s coronavirus job retention scheme, to give its full title, has in many ways been one of the most successful government projects we have seen for years. More than six million workers and half a million companies have taken it up. It has been brilliantly implemented by

You can get 80 per cent of your salary, and sometimes even 100 per cent, without actually working. Companies are getting virtually free loans, and can dump their often troublesome staff on the Treasury payroll, and entrepreneurs can get direct injections of cash from the state without actually having to launch any products. Sure we can understand why the Government has stepped in with so much cash. It needs to stop the economy collapsing, and a lot of businesses would have gone under already if that support was not available. But there’s a catch. We’ve just created the biggest free lunch in history, and we shouldn’t be surprised if some

Last week’s report from the Office for Budget Responsibility made waves with its latest economic scenario, estimating a 35 per cent collapse in GDP in the second quarter of the year. But could even that dire prediction have been too optimistic? While the downturn was estimated by the OBR to be sharp, so too was the economy bounce-back, creating a V-shaped recovery and quick economic improvement. But internal Treasury assessments revealed by the Times today predict a U-shape recovery: a longer, more painful return to the status quo. In both scenarios, the millions made unemployed by the Covid-19 lockdown take longer to return to work than the economy does to technically