Author: Emma Robson

53,100 people in the region were still receiving furlough when the scheme came to an end on the 30th of September.

With the Covid-19 pandemic forcing many businesses to close, the £70 billion pound government scheme has been responsible for supporting millions of people across the UK over the last 18 months. However, with the scheme now coming to an end, concerns are being raised about whether the end of the scheme will see unemployment figures in the region soar.

Economists have forewarned that although many people may find employment in the sectors that are beginning to recover such as travel and hospitality, there is also likely to be new redundancies as a result of businesses losing access to the government funding. The North-East Chamber of Commerce warns that the end of furlough could be tough for businesses as they have new problems arising due to the after effects of the pandemic, “we’ve got a whole new wave of issues that are hitting them (businesses)…price rises, supply chain issues, labour issues etc.”

The Chief Secretary to the Treasury, and Member of Parliament for Middlesbrough South and East Cleveland Simon Clarke said the current employment situation in the UK is “really strong.” He added, “It’s been a huge success in meaning this awful situation hasn’t cost millions of jobs which would have been the central estimate when this all began.”

Simon Jordan: Twitter

Despite this, there are over 1 million people who were expecting to be receiving furlough past the end of September, and Rishi Sunak has announced a new scheme to support families who need it most with rising fuel costs. The ‘Household Support Fund’ will provide many families with extra cash, distributed by local councils to help families with essentials over the coming months.

Alan Custis, head of UK equities at Lazard Asset Management, stated that the rate of employment which fell to 4.6% last month is likely to swing higher over the coming months. Samuel Tombs, chief UK economist at Pantheon Macroeconomics has expressed concern that consumer demand will not have broadened enough for businesses to re-employ all their staff who remained on furlough.

Leaders in some of the most heavily affected industries have urged for policy reforms in other areas. Kate Nicholls, chief executive of UKHospitality, said: “With businesses currently experiencing a record number of vacancies, our hope is that those seeking employment will consider the varied and exciting opportunities a career in hospitality offers. She added, ‘in order to drive further job creation, we urge the Government to implement a long-overdue reform of business rates and a permanently lower rate of VAT for hospitality and tourism in order to help fragile businesses back on their feet.”

However, the end of the schemes comes with a record number of UK vacancies, the Office of National Statistics data reporting that there are more than a million job openings currently throughout the UK for the first time on record. There has been a surge in the hiring of HGV drivers, warehouse staff and food production workers, and countries such as the United States of America and Australia also faced similar spikes in unemployment when their financial support schemes came to an end.

The Government insists that now the vast majority of restrictions have been relaxed, it is the right time to end the scheme and concentrate on creating skills and opportunities.