Furlough ends for 1.6 million workers amid fears over wave of redundancies

The £70 billion job retention scheme is winding up today after supporting millions of UK workers over the past 18 months

The furlough programme ends today despite fears that the 1.6 million people still being signed up to the government support programme could face losing their jobs amid a “tidal wave” of redunduncies.

The £70 billion job retention scheme, officially known as the Coronavirus Job Retention Scheme or CJRS, is winding down after supporting millions of UK workers over the past 18 months.

Under furlough, businesses have been able to get up to 80% of staff wages to help them stay afloat during the pandemic.

First announced by Chancellor Rishi Sunak in March 2020 for an initial three month period, the end date has been pushed back five times since owing to the continuing Covid crisis.

It has been slowly wounding down from July, with the level of support from the government being tapered off from that date.

Figures published by the HMRC at the end of July show more than 1.6 million people were still on furlough when the UK ended lockdown restrictions.

For those who are still receiving support through the scheme, uncertainty lies ahead.

Economists have warned that although many may find work in recovering sectors such as hospitality and travel, there is also likely to be a rise in unemployment due to new redundancies.

In industries such as aviation and travel, employees may still be unable to return to work due to ongoing restrictions that will continue past Thursday.

Concerns are particularly high for workers over the age of 50 who are still furloughed. According to research, more than 540,000 people in the age group were receiving support at the end of July, accounting for 35% of the total.

The Liberal Democrats have warned of a “tidal wave” of job losses and called for furlough support to be extended for the 10 most affected sectors to avoid a “tidal wave” of job losses.

In a letter to the chancellor, Liberal Democrat Treasury spokesperson Christine Jardine said furlough should be maintained for another six months for 10 industries particularly badly affected by the pandemic, such as air travel and photography.

Ms Jardine said: “The withdrawal of furlough risks having a devastating impact on countless families already facing a winter of soaring energy bills.

“The government needs to rethink its approach or the country could face a Coronavirus Black Thursday.”

Despite this, Mr Sunak has rejected calls for an extension of the scheme which, coupled with an upcoming National Insurance tax rise, experts warn will lead to inevitable job cuts.

He added that he was “immensely proud” of the scheme, but that it was the right time for it to close.

Businesses now face three options from today onwards: to bring employees back to work on their agreed terms and conditions, terminate their employment or agree with employees any changes to terms and conditions of employment.

Under the initial furlough scheme, the government used to contribute 80% of pay, up to a cap of £2,500 a month, for hours not worked by furloughed staff. This then fell to 70%, up to £2,187.50, from July 1.

The support from the government then dropped again on August 1 to its most recent level of 60% contribution for hours not working, capped at £1,875.

Employers paid out the remaining 20% of furloughed income, plus pension and National Insurance contributions, again capped at £2,500.

The changes meant workers could still receive 80% of their pay while on furlough – it’s just the amount contributed by the government that has been reduced.

Employers have also always been able to top up wages to the 100% mark – but they don’t have to do this.

The end of furlough comes amid record vacancy figures in the UK, with the latest Office for National Statistics data for August reporting more than one million available jobs for the first time on record.

There have also been significant hiring sprees amid labour shortages for HGV drivers, warehouse staff and food production workers.