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Record surge in redundancies pushes UK unemployment to 4.8%

A surge in redundancies and a slump in hiring pushed UK unemployment up to 4.8 per cent in the three months to September, official data showed on Tuesday.

The figures reflect a wave of job cuts made as the government tapered wage support for workers furloughed under its Job Retention Scheme, which had been due to close at the end of October but has now been extended until the end of March next year.

Redundancies climbed to a record high of 314,000 between July and September, a rise of 195,000 from the previous year and 181,000 from the previous quarter, the Office for National Statistics said. Weekly figures showed especially strong growth during the first two weeks of September, when employers had to pay more towards the cost of furloughed workers in the run-up to the scheme’s scheduled end.

“The government’s failure to face up to the scale of this jobs crisis in time has cost people their livelihoods,” said Jonathan Reynolds, Labour’s shadow work and pensions secretary. He called on ministers to provide urgent support for those who had lost jobs and to fund the creation of new roles through green investment.

Rishi Sunak, the chancellor, said the figures “underline the scale of the challenge we’re facing”, adding: “I want to reassure anyone that is worried about the coming winter months that we will continue to support those affected.”

Job losses look set to climb further: the unemployment rate averaged 4.8 per cent over the three months to September, but experimental weekly figures from the ONS put it at 5.1 per cent by the end of that period.

The UK employment rate stood at 75.3 per cent in the three months to September, with 32.51m people in work — almost a quarter of a million fewer than a year earlier.

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Despite the weakening of the labour market, unemployment remains well below the worst-case projections of the Office for Budget Responsibility, and economists said the extension of government income support would both delay and limit the damage.

The fall in employment was especially steep for young people, with a drop of 174,000 on the quarter among 16 to 24-year-olds, down to a record low of 3.52m. There was also a clear divide by gender, with men faring much worse than women. And there has been a dramatic drop in the foreign-born workforce, with the number of EU nationals working in the UK 364,000 lower than a year earlier, and the number of non-UK nationals from other countries down by 65,000.

Samuel Tombs, at the consultancy Pantheon Macroeconomics, said the chancellor’s change of tack on furlough had “greatly improved the near-term outlook for employment”, especially as hopes of a vaccine might now persuade companies to keep staff on their books over the winter in expectation of a recovery in demand next summer.

Tony Wilson, director of the Institute for Employment Studies, said the changes in unemployment and employment were “worrying but not catastrophic”, although the continued dearth of hiring was troubling.

He noted that the number of people starting a new job between July and September was even lower than it had been during the spring lockdown. “Every recovery is built on a rebound in hiring but it didn’t happen in the summer,” he said.

This lack of hiring is one reason why youth unemployment has risen much faster than the overall jobless rate, with few openings for new labour market entrants.

Separate figures published on Wednesday by the Institute of Student Employers show a 12 per cent drop in the number of graduate jobs in 2020, and a much bigger fall in the number of internships and placements that often lead to permanent roles, with most employers also planning to cut recruitment in 2021.

Business groups, think-tanks and unions said government policy was now too narrowly focused on protecting jobs, and urged ministers to do more to spur new job creation, by cutting employer taxes, or by directly funding new jobs in the green economy and public services.

The ONS data gave some early signs of the labour market starting to pick up in the autumn, but this was before the spread of local Covid-19 restrictions and the announcement of the second national lockdown.

The ONS said data from HM Revenue & Customs suggested only a slight drop of 33,000 in the number of payroll employees between September and October, although this still left the number on company payrolls at 782,000 below pre-pandemic levels.

The number of vacancies advertised climbed steadily from August to October, driven by hiring in small businesses, but it remained almost a third lower than a year ago, even at the end of this period.

Annual growth in employees’ pay was stronger than the previous month — reflecting people returning to work on full pay after a period on furlough. However, this too was well below pre-pandemic levels, with annual growth of 1.3 per cent in total pay and 1.9 per cent in regular pay — the gap between the two measures reflecting lower bonuses.

And although the return of furloughed workers drove a rebound in working hours from the lows of the spring lockdown, average weekly hours were still below their level in March, and total weekly hours worked in the UK were more than a tenth below pre-pandemic levels.

“As the crisis enters its ninth month and second lockdown, job losses will continue to mount,” said Nye Cominetti, economist at the Resolution Foundation. “Crucially, this is as much about those out of work struggling to find new roles as it is about job losses.”

By Delphine Strauss

Source: Financial Times

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UK sees largest jump in redundancies since 2009

The United Kingdom’s jobless rate witnessed a higher increase than expected in the three months to August, intensifying anxieties about the imminent end to the government’s £50bn ($65bn, €55bn) Covid-19 work-protection scheme.

The Office for National Statistics (ONS) found that unemployment rose to 4.5 per cent in the quarter, its highest reading in more than three years and higher than analyst projections of around 4.3 per cent.

The body’s deputy national statistician Jonathan Athow said: “Since the start of the pandemic there has been a sharp increase in those out of work and job hunting but more people telling us they are not actively looking for work.”

Athow added: “There has also been a stark rise in the number of people who have recently been made redundant.”

Indeed, redundancies witnessed a record jump of 114,000 from the previous quarter to 227,000, their highest level since 2009 and the global financial crisis.

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Before the novel coronavirus outbreak began and governments around the world imposed lockdowns, the unemployment rate in Britain was at its lowest point in almost 50 years.

The latest reading of 4.5 per cent is still below the jobless rate seen throughout the relatively prosperous pre-GFC 2000s.

As the October 31 deadline of the government’s seven-month-long furlough scheme approaches, there is growing concern that unemployment could skyrocket, with the economic consequences of the nationwide lockdown finally coming home to roost once government support is lifted.

The Bank of England has forecast that the jobless rate will reach 7.5 per cent by the end of the year.

Chancellor of the Exchequer Rishi Sunak reaffirmed his determination to stem the rise in job losses. The 40-year-old politician hopes to achieve this with a more targeted job protection scheme, which will cover the wages of employees whose businesses have been forced to close as a result of government restrictions.

With the recent launch of a three-tier Covid-19 rules system for England, many workers in parts of the north could continue to find their wages subsidised by the state.

By Lawrence Gash

Source: Capital

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Covid: Nearly 500,000 redundancies planned since crisis began

British employers planned 58,000 redundancies in August, taking the total to 498,000 for the first five months of the Covid crisis.

Some 966 separate employers told the government of plans to cut 20 or more jobs, compared with 214 last August, a more than fourfold increase.

However, the figures were down from the levels seen in June and July, which both saw 150,000 job cuts planned.

The figures were released to the BBC after a freedom of information request.

The economy bounced back in the summer after the unprecedented economic downturn earlier in the year, as workers were urged to return to the office, and customers encouraged to spend more by schemes such as the Eat Out To Help Out restaurant vouchers.

However a number of big businesses from many of the hardest-hit sectors, such as retail and restaurants, announced big redundancy plans, including Debenhams, DW Sports, Marks & Spencer, Pret a Manger, currency exchange company Travelex, and WH Smith.

The 58,000 positions put at risk in August was considerably lower than previous months, but it was still more than 150% up on the previous year.

“There was a sense of optimism in August, we were starting to see more spending and more activity, there were hopes for a quick recovery,” said Rebecca McDonald, senior economist at the Joseph Rowntree Foundation think tank. “That seems a lot less likely now.”

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A government spokesperson said: “Supporting jobs is an absolute priority, which is why we have set out our plan for jobs to protect, create and support jobs across the UK.

“We are helping employees get back to work through a £1,000 retention bonus, creating new roles for young people with our £2bn Kickstart scheme and doubling the number of frontline work coaches.”

How will the end of the furlough scheme affect redundancies?

The big summer rush may have been partly caused by firms preparing to cut staff before the end of the furlough scheme on 31 October.

That scheme, where the government pays part of workers’ wages when their employers cannot, has helped to reduce the number of pandemic-related redundancies. A total of 9.6 million jobs were furloughed.

But given that most redundancy processes take months to complete, firms planning significant dismissals by the end of furlough would have had to notify government in the summer.

The Chancellor, Rishi Sunak, unveiled a new employment support scheme last month, where government will subsidise the pay of employees who are working fewer than their usual hours due to reduced demand.

By Ben King

Source: BBC

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Sunak warned winter economy plan not enough to stop wave of job losses

Rishi Sunak’s winter economy plan will not be enough to stop a wave of redundancies unless hard-hit industries such as hospitality and the arts receive further support, the government has been warned.

After cancelling the budget, Sunak announced a series of measures on Thursday, including a new wage subsidy scheme, to support jobs. They received cautious applause from several major trade bodies and business lobby groups.

But the UK chancellor also faced accusations of abandoning millions of freelancers and whole sectors of the economy such as nightclubs, live music venues and theatres, that cannot access wage subsidies because they are not allowed to reopen.

Sunak’s plans included a long-awaited replacement for the furlough scheme that will see the government and employers share the cost of paying wages.

July’s VAT cut for hospitality – from 20% to 5% – will be extended to the end of March, while struggling businesses will get longer to pay back government loans.

Dame Carolyn Fairbairn, director general of the UK’s leading business lobby group the Confederation of British Industry (CBI), praised Sunak for “bold steps” that she said would preserve hundreds of thousands of jobs through the winter. She insisted that 2021 could be a year of “growth and renewal” as a result.

Adam Marshall, director general of the British Chambers of Commerce, said the plan was a “shot in the arm” for businesses.

But the measures were not met with universal optimism. The Institute of Directors, which represents business leaders who will be making hiring and firing decisions over the coming months, said it was “not yet clear how much the job support scheme will help hard-pressed firms hold onto staff”.

The IPPR thinktank said the time taken to come up with the plan had already cost thousands of jobs and the measures did not go far enough.

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IPPR’s executive director, Carys Roberts, said the plan “does not support businesses enough to prevent layoffs, and will be cold comfort to firms that are fundamentally viable but can’t operate at all due to local or sector restrictions.”

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Hospitality has been hit particularly hard by the pandemic and multiple trade bodies had warned earlier this week that a quarter of the UK’s 100,000 pubs, bars and restaurants could close, with the loss of 675,000 jobs, unless they were given sector-specific support.

The sector includes thousands of businesses, including small city-centre pubs and nightclubs, that are unable to reopen or are not permitted to do so, and are therefore unable to make use of wage subsidies.

Speaking after Sunak’s announcement, which included an extension of the VAT cut on food, UK Hospitality’s chief executive, Kate Nicholls, said the chancellor needed to provide more support for a sector that was “not out of the woods”.

“Things were looking grim for our sector yesterday and we were desperately hoping for some good news,” she said.

“The chancellor has given us some reason to be positive again, but we urge him to engage with the trade on specific measures to keep people in work.

“We need government to go further in hospitality, recognising the greater restrictions imposed upon us, and pick up the full cost of unworked hours,” she said.

“This would be a relatively low cost for huge reward for our workforce. Full support to sustain people in their jobs during what could be a pretty bleak winter for hospitality would be a great step forward.”

Sunak was also accused of letting freelancers slip through the cracks, particularly those working in creative industries such as theatre, where venues remain closed and are therefore also unable to tap into government wage subsidies.

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“The job support scheme may help some employers, but it will not help to save theatres that are still not able to open due to government restrictions and are already making thousands of workers redundant,” said Philippa Childs, head of creative industries union Bectu.

“The army of freelancers and self-employed who make up the backbone of the UK creative industries face being excluded from support once again as the chancellor continues to turn a deaf ear to their hardship,” she said.

“Without more support the UK creative sector will not get through the winter, we desperately need a targeted plan to save jobs and ensure that one of the most productive parts of our economy can survive the winter.”

Conservative MP Julian Knight, who chairs the culture select committee, said workers in the industry had been left facing a “grim future”.

Three million people who were left out of the self-employment income support scheme (SEISS) will also not benefit from the new measures, according to law firm Blick Rothenberg.

“For a Conservative government which is meant to support entrepreneurship, it appears illogical to continue ignoring such a large number of workers,” said director Robert Salter.

SIBA, the trade body for independent breweries, said its members had not had access to business grants and warned that the continued exclusion of alcohol from the VAT cut would further hurt them and the “wet-led” alcohol-focused pubs they sell to.

By Rob Davies

Source: The Guardian

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Almost half of UK businesses say they will make redundancies this year

Close to half of all UK businesses think they might have to reduce headcounts before the end of the year, new figures show.

Researchers found that 42% of small and medium sized enterprises think they will have a smaller workforce in December than they did in September.

An online survey from Censuswide and Virgin Money also showed that companies are worried about their futures, with nearly a quarter thinking they might go out of business in the next year if there is a second wave of Covid-19.

The figures speak to a gloom in the business world, as companies prepare for what to do when the Government’s furlough scheme ends on October 31.

However, the survey was carried out before Chancellor Rishi Sunak announced a raft of new measures which he hopes might help save jobs.

The Treasury promised last week to pick up part of the tab if companies cannot take their workers back full-time.

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But the data also shows that many companies were not tempted enough by previous Government measures to hold onto their staff for just another couple of months.

In August Mr Sunak promised companies whose staff had been furloughed that they would get £1,000 per employee they brought back and kept on the books until the end of January.

Businesses who have parted ways with the workers by December will therefore not be in line for the cash.

Researchers asked 501 decision makers at small and medium sized enterprises between September 4 and September 7 about their plans for the future.

The online survey found that 17% of businesses think it is very or somewhat likely that they will be forced to close in the next 12 months.

“If there is a second national lockdown, that figure rises to 24%.

“The results make for sober reading, but they are unsurprising given the extraordinary disruption of the last six months,” said Gavin Opperman, group business director at Virgin Money.

He added: “While the Chancellor’s newly announced schemes may help stave off the worst of the closures over Christmas, both the Government and the banks need to look for pragmatic ways to provide support for SMEs and the economy moving forward.”

By Neil Shaw

Source: Wales Online

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Furloughed workers should find out this week if they’ll face redundancy when scheme ends in October

MILLIONS of furloughed workers should find out this week if they will lose their job when the coronavirus job retention scheme comes to an end next month.

Many businesses planning to cut jobs must alert staff of the risk of redundancy by Wednesday this week if they intend on dismissing staff as soon as the furlough scheme ends in October.

A consultation period must start at least 45 days before the first job loss when more than 100 staff are made redundant.

The coronavirus job retention scheme (CJRS) – the government-backed initiative which pays part of the wages of furloughed staff – ends on Saturday 31 October.

Wednesday 16 September marks 45 days before this.

Companies can still make staff redundant after this date, but they will have to pay full wages from 1 November onward without furlough scheme support.

Citizens Advice is reminding people to check their redundancy rights, including that the 45 day rule for consultation is followed.

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Tracey Moss, senior employment expert at Citizens Advice, said: “If you’re at risk of redundancy, it’s important to know you do have rights to help protect you from unfair dismissal and to ensure you’re paid what you’re owed.

“It’s completely understandable that you may find the rules and procedures overwhelming, but you don’t have to face redundancy alone. If you’re struggling, contact your nearest Citizens Advice for help.”

If your employer fails to consult properly, including starting late or not consulting at all, you could make a claim to an employment tribunal.

Where there are redundancies of between 20 and 99 staff, the redundancy consultation must start at least 30 days before the dismissals.

In this case, employers will have to notify staff by 1 October if they intend to make them redundant as soon as the furlough scheme ends.

For redundancies of less than 20, there are no rules for the length of the consultation and there is no maximum length for redundancy consultation.

A wave of job cuts have already taken place, with the travel, retail and hospitality industries among the hardest hit so far.

London City airport, Pret A Manger and Marks and Spencer are among those to have announced redundancy plans.

LinkedIn careers expert Charlotte Davies said: “Losing your job can be a really destabilising experience, especially in this challenging economic climate.

“LinkedIn data shows that there are currently three times as many people applying for every role compared to last year.

“But while the prospect of landing a new role in the current jobs market may seem daunting, the good news is there are still jobs out there.

She recommends looking at and improving your skills.

She said: “Reflect on your transferable skills and consider if there are any gaps in your skillset that you could fill with an online learning course.

“LinkedIn Learning is currently offering nearly 1,000 hours of free courses to help people reskill for in-demand digital roles.

And don’t forget to take advantage of your network of people you know.

She said: “Don’t be afraid to reach out to your online networks for advice and opportunities.

“We’ve seen so many conversations happening on LinkedIn over the past few months from members who have been made redundant or furloughed, and then found new positions through their online community.”

Fresh calls have been made for the furlough scheme to be extended over fears the UK could be hit with a “second wave” of redundancies.

Around half a million people could lose their jobs this autumn, a shocking new study has predicted.

Martin Lewis has urged furloughed workers to check if they’re still being paid 80% of their salary after a change in how the scheme works.

By Lynsey Barber

Source: The Sun

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Unemployment and redundancy rates are on the rise in the UK – here are the places most affected

The latest set of economic data released by the National Office for Statistics (ONS) paints a stark picture of the pandemic’s continued impact on the UK economy, with unemployment and redundancies on the rise.

Early indicators for August 2020 suggest that the number of employees on payroll in the UK was down by around 2.4 per cent (or 695,000 people) compared with March 2020, before the impact of Covid-19 had been felt in the economy.

Unemployment has risen to the highest level for almost two years, at 4.1 per cent across the UK, up from 3.9 per cent in the previous quarter. This rise has been driven disproportionately by young people finding themselves out of employment in the last few months, with a record decrease of 146,000 among 18 to 24 year olds in employment.

However, there was an increase in the number of 25 to 64 year olds in employment, with 236,000 people finding work. As a result, despite significant decreases in employment for certain demographics and in certain areas, the overall employment rate has risen slightly in the last quarter.

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Redundancies have also increased significantly, up by 48,000 this quarter. While the ONS notes that redundancy figures were historically low prior to this release, the changes now seen in the redundancy rate both annually and quarterly are the largest increases since recession in 2009 following the global financial crash.

The areas with the highest levels of unemployment

North East: 5.2% (no change)North West: 3.5% (-0.6)Yorkshire and The Humber: 4% (+0.1)East Midlands: 4.4% (+0.7)West Midlands: 4.4% (-0.4)East: 3.7% (+0.1)London: 5% (+0.4)South East: 3.5% (+0.5)South West – 3.8% (+0.8)Wales – 3.1% (+0.1)Scotland – 4.6% (+0.1)Northern Ireland – 2.9% (+0.6)UK – 4.1% (+0.2)

While unemployment rates are currently highest in the North East, followed by London and Scotland, the areas which have seen the largest increases in the unemployment rate over the last quarter are the South West, East Midlands and Northern Ireland.

Though they are still dealing with relatively high rates of unemployment, the North West and West Midlands both recorded notable decreases in the unemployment rate over the last quarter.

Commenting on the ONS statistics, Head of Economics for the British Chamber of Commerce, Suren Thiru, said, “Despite the slight rise in the unemployment rate, the furlough scheme continues to limit the pandemic’s full impact on headline job figures.

“With many firms still facing waves of cash flow problems, rising costs and an uncertain economic outlook, it is probable that unemployment will escalate sharply as government support winds down.

“To help avoid a damaging cliff edge for jobs more must be done to help firms keep staff on through this deeply challenging period.”

By Ethan Shone

Source: News Post Leader

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UK redundancies rise most since 2009 as Covid-19 takes toll

The number of redundancies in the UK rose in July by the most since 2009 as the Covid-19 pandemic took its toll.

Figures released on Tuesday by the Office for National Statistics showed that 156,000 people were made redundant in the May to July quarter, up 58,000 from the same period a year ago and 48,000 higher than between February and April. The ONS said these were the largest annual and quarterly increases since 2009.

“While redundancies are at their highest level since September to November 2012, the level remains well below that seen during the 2008 downturn,” it said.

Meanwhile, the unemployment rate increased to 4.1% in July from 3.9% the month before. The data showed that the number of employees on payrolls declined by 695,000 in August compared to March and by 36,000 compared to July.

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The claimant count reached 2.7m in August, up 120.8% since March.

ONS director of economic statistics Darren Morgan said: “Some effects of the pandemic on the labour market were beginning to unwind in July as parts of the economy reopened. Fewer workers were away on furlough and average hours rose. The number of job vacancies continued to recover into August, too.

“Nonetheless, with the number of employees on the payroll down again in August and both unemployment and UK redundancies sharply up in July, it is clear that coronavirus is still having a big impact on the world of work.”

By Michele Maatouk

Source: Sharecast