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Retail and hospitality workers under threat as furlough scheme ends

Canary Wharf shops
Canary Wharf shops

More than 1.7m jobs in vulnerable retail and hospitality sectors were still furloughed at the end of July, official figures on the Government’s coronavirus job retention scheme showed on Friday.

The dependence of the two sectors on the scheme - accounting for more than a third of the total 4.8m jobs still furloughed - heightened calls for a successor when it finishes at the end of October.

As of 31 July, 942,000 of 1.62m jobs in accommodation and food were still furloughed despite the reopening of pubs and restaurants in “Super Saturday” at the beginning of the month.

In retail, 789,000 of 1.85m jobs were also covered despite all non-essential shops being reopened since mid-June.

The 4.8m total is almost half the 8.9m peak in early May, although HMRC suggests the figure could be as high as 5.3m when all data is collected.

Business groups are calling for an extension as unemployment threatens to soar in the autumn and restrictions are stepped up to halt the spread of the virus.

The latest Office for National Statistics estimates suggest 10pc of the workforce - some 3.3m people - are still on furlough six weeks before the scheme ends.

Annie Gascoyne, the CBI’s director of economic policy, said the need for further support was “absolutely critical”. The business group is calling for a more permanent short-time working scheme similar to Germany’s Kurzarbeit scheme.

She warned: “Businesses are still struggling with a lack of cash and low demand, perhaps even more so in areas where there are greater local restrictions.

“We need a new scheme that is less generous, but most importantly still offers firms enough support to reach the other side and keep more people in work. Saving jobs today is easier than picking up the pieces tomorrow.”

Kate Nicholls, chief executive of trade body UKHospitality, has also warned that at least 900,000 jobs were at risk of redundancy without extra help, despite an August lift from the Eat Out To Help Out dining discount scheme."

“With the furlough scheme about to end, we really need to see the Government lay out plans for a responsive and fluid support scheme for employees," she said.

"If employees need to self-isolate while they wait for a test, we will need to see support from the Government. Businesses already at risk of failing cannot take the strain and employees should not be forced to take the hit.”

Changes to the furlough scheme that took effect on July 1 allowing employers to bring back workers part-time meant that 950,000 workers – 20pc of those furloughed nationally – return to employment on limited hours.