£70 billion furlough scheme prevented catastrophic levels of unemployment

Job Retention scheme furlough
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As furlough closes commentators pay tribute to the scheme that cost £70 billion and kept peak rate of unemployment down to 5.2 percent.

 

One million employees are on course to be on the furlough scheme when it closes 30 September, which will prompt a testing period in the labour market according to the centre left Resolution Foundation think tank.

ONS data shows that the number of employees on the furlough scheme fell to 1.4 million in August, with 40 per cent fully furloughed.

The Foundation says that while the majority of these workers should return to their previous jobs – particularly those on partial furlough – this would still leave hundreds of thousands of more workers needing to find new jobs in October.

This mass search for jobs is set to be testing, says the Foundation, particularly for older employees who are most likely to still be on the furlough scheme and who face a risk of early retirement if they can’t find work.

The Foundation adds that the data shows the Government was correct in extending the furlough scheme for 18 months preventing catastrophic levels of unemployment by supporting 11.6million people and subsidising 2.3 billion working days. The total cost to the state was £70 billion limiting unemployment during the sharpest economic contraction for three centuries to 5.2 percent at its peak.

Dan Tomlinson, Senior Economist at the Resolution Foundation, described the furlough scheme as being “…a living standards lifeline” but that the end of furlough is set to prompt a testing period in the labour market.


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