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The British Chambers of Commerce said its surveys showed more than 70 percent of private firms plan to temporarily lay off workers.
Around 25 percent of workers in the United Kingdom have been furloughed as the economic shutdown takes a toll in the world’s fifth-largest economy and one of the hardest-hit nations from he COVID-19 pandemic, tax authorities informed Monday.
HM Revenue and Customs said on Twitter that 6.3 million workers from 800,000 employers had been furloughed, citing figures up to midnight on Sunday. This accounts for 23 percent of Britain’s 27.5 million private-sector workers.
An employers’ organization, the British Chambers of Commerce, said its surveys showed more than 70 percent of private firms plan to temporarily lay off workers.
Fears that the decision to lock down the country would result in the unemployment rate surging from four percent, close to its lowest levels since the mid-70s, to well over 10 percent have prompted Finance Minister Rishi Sunak to announce the coronavirus job retention scheme (CJRS) within a few days of the lockdown commencing.
Under the plan, workers who are furloughed have 80 percent of their wages paid by the government up to a ceiling of around US$3,000 per month. At present, wage subsidies are to remain in place until the end of June, although there is already pressure from employers for the scheme to be extended.
Sunak said on Monday there would be “no cliff-edge,” adding that he is “working as we speak to figure out the most effective way to wind down the scheme and ease people back into work in a measured way.”
“But as some scenarios have suggested we are potentially spending as much on the furlough scheme as we do on the NHS (National Health System) for example. Now, clearly that is not a sustainable situation.”
The scheme is likely to cost the public finances around US$48.5 billion, based on an assumption that 30 percent of employees are enrolled, Britain’s official budget forecasters have said.
The figures came as Pensions Minister, Therese Coffey, said the government received 1.8 million claims for welfare payments between March 16 and the end of April via its ‘Universal Credit’ benefits system.
Universal Credit benefits are paid to people in work as well as those who have lost their jobs.
Coffey said that overall, the volume of welfare claims had been six times bigger than pre-coronavirus during that period and that in one particular week the increase had been tenfold.
And the companies are following suit. Last week an official survey showed two-thirds of British firms had claimed eight billion pounds (US$9.9 billion) from the government to sustain their wage bills during the coronavirus lockdown.