COVID-19: Up to 1.6 million remain on furlough as Treasury wage support nears new easing
The latest data suggests the numbers on the wage support scheme continue to fall as employer contributions will ramp up from Sunday 1 August.
Thursday 29 July 2021 11:51, UK
Between 1.1 million to 1.6 million workers remain on full or partial furlough as taxpayer aid for the wage support scheme prepares to be eased further, according to official estimates.
A survey by the Office for National Statistics (ONS) showed that businesses continued to claim COVID-19 salary aid on behalf of between 4% and 5% of the workforce early this month.
The figures were published separately to Treasury data showing that the total number of claimants for the Job Retention Scheme stood at 1.9 million on 30 June.
It represented a decrease of 590,000 on the previous month.
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The announcements were made as the Bank of England pointed to further taxpayer support for the economy driving record monthly mortgage borrowing in June.
It said that a rush to beat a tapering of the stamp duty holiday in England pushed net mortgage borrowing to almost £18bn - with 81,300 deals agreed over the month.
The sums are remarkable given the scale of the damage to employment and earnings during the crisis.
In January, furlough numbers peaked at 5.1 million - a time when the economic recovery from the worst slump in 300 years was stopped in its tracks by renewed lockdowns across UK nations.
But the Treasury said almost three million people had moved off the furlough scheme since March and it was clear, from the ONS data, that the situation had improved further.
Chancellor Rishi Sunak has refused to further extend further the timeframe for the end of the support - costing almost £50bn to date - as the economy has reopened.
It has provided claimants with 80% of their monthly wage - capped at £2,500.
Since the beginning of the month, employers have had to contribute at least 10% and the scheme is further tapered from Sunday when that sum rises to 20% until the scheme is ended at the end of September.
The cliff edge has prompted warnings, in some quarters, of a flood of job losses given a continuing squeeze on businesses in areas such as travel and events.
The ONS survey showed that young people - most likely to have been furloughed because of high numbers of hospitality workers - left furlough at twice the rate of other age groups during June.
In total, 600,000 under-25s were either brought back to work or made redundant.
Workers aged over 65 represented the largest single age group on the scheme, the ONS said.
It also reported that the percentage of businesses currently trading had remained broadly unchanged, from 89% in early June to 88% in late July.
The chancellor said of the big picture: "It's fantastic to see businesses across the UK open, employees returning to work and the numbers of furloughed jobs falling to their lowest levels since the scheme began.
"I'm proud our Plan for Jobs is working and our support will continue in the months ahead."
However Charlie McCurdy, economist at the Resolution Foundation think tank, said the numbers on furlough were a cause for concern as the scheme is wound down.
He said: "With employer contributions to furloughed staff doubling from this Sunday, and the scheme ending completely in just two months' time, it's vital that as many furloughed staff as possible return to work soon, in order to limit the rise in unemployment this Autumn."