Furlough wind-down in Bedford: Government accused of acting too fast

British Chambers of Commerce says it should be immediately deferred

Thursday, 8th July 2021, 12:15 pm

Thousands fewer workers in Bedford were on furlough in May - but as the scheme starts to be wound down, the Government has been accused of acting too fast.

Employers have had to pay 10 per cent of the salary for furloughed staff since the beginning of this month, which will rise to 20 per cent in August and September, when the support scheme ends.

But there are fears many businesses will not be able to afford the cost with parts of the economy still restricted by Covid measures.

The British Chambers of Commerce director general says the taper of government payments into the furlough scheme should be immediately deferred
The British Chambers of Commerce director general says the taper of government payments into the furlough scheme should be immediately deferred

The latest figures from HM Revenue and Customs show that 5,800 jobs held by workers living in Bedford were furloughed in May.

That was 2,300 fewer than the 8,100 furloughed at the end of April.

The reduction coincided with an easing of restrictions which led to the reopening of indoor entertainment and hospitality, along with holiday accommodation.

The figures show that in May in Bedford:

Furloughed jobs in the retail sector dropped by 680, to 970

In the arts, entertainment and recreation sectors, 190 fewer jobs were supported by the scheme, with 340 still furloughed

The number of hospitality jobs furloughed fell by 730, to 1,170

Across the UK, the total number of jobs furloughed fell by 1.2 million during May to 2.4 million at the end of the month, the figures show.

The furlough scheme, formally called the Coronavirus Job Retention Scheme, started with the Government paying 80 per cent of a worker’s wages, up to £2,500 per month, if they were not able to work due to the impact of the pandemic.

Employers could choose whether to make up the rest of staff salaries.

The reduction in Government support to 70 per cent with firms now required to pay 10 per cent of furloughed staff salaries will cost businesses £322 in July to keep an employee earning £20,000 a year on the books, according to the Institute of Fiscal Studies.

That could be too much for some businesses, say politicians and business groups.

Labour's shadow chief secretary to the Treasury Bridget Phillipson said: "The Government must make sure economic measures go hand in hand with public health measures and that our British businesses and high streets are not left out in the cold.”

Meanwhile, British Chambers of Commerce director general Shevaun Haviland said: “The taper of government payments into the furlough scheme should be immediately deferred until we take the final step in the road map, and further grant support should be extended to the worst affected businesses.”

The Government has spent £66 billion on the furlough scheme since it started in March last year.

A spokesperson said: "We deliberately went long with our support to provide certainty to people and businesses over the summer, and that support, which is a substantial amount of funding, is continuing."

They added additional support was being given to businesses through grants, business rates relief and a cut in VAT.

Separate HMRC figures show 8,000 self-employed workers in Bedford have received Government cash since the self-employment income support scheme started. The total value of the claims made across the area stood at £72.4 million by June 6.