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The Tories’ Furlough Delay Has Led to Thousands of Needless Redundancies

by Francesca Newton

@francesca_r_n
5 November 2020
  • Estimated read time: 5 mins

In its latest change of tack, the government announced late on 31 October that the Coronavirus Job Retention Scheme, better known as furlough, would continue through the second nationwide lockdown – and, amid mounting pressure, likely well beyond that. Up until then, it had been adamant there would be no lockdown, and thus furlough was deemed unnecessary. Now, though, employees will once again have up to 80% of their normal income covered, with employers required to pay national insurance and pension contributions. 

But for thousands of people across the country this sudden act of magnanimity will amount to nothing. The announcement came less than six hours before the previous scheme was due to end; analysts had long warned that its replacement – the Job Support Scheme (JSS), announced in September and amended as late as 22 October, would make it cheaper to lay-off staff than keep them on. By Saturday night, many employers had already faced such a fate. 

 

 

Such was the case for Isobel, a waitress who was furloughed from her restaurant in Bath in September. “My boss reassured me about three times that no one would lose their job,” she told Novara Media. “Then I was told I’d be made redundant, and my furlough pay stopped literally the same day. I assumed there’d be at least a week’s notice period; instead, I suddenly had no income at all.” 

Nearly 380,000 staff were told their jobs were at risk with furlough ending, with the Institute for Employment Studies predicting at least 450,000 autumn redundancies. Saturday’s change of plan is expected to palliate that problem in part and Money Saving Expert’s Martin Lewis has said that workers can be re-hired and re-furloughed if they were payrolled on or before 23 September. However, it all comes down to employer discretion. 

‘We’ll be couchsurfing by Christmas.’

Rachael in Birmingham is currently in the process of applying for her 63-year-old mother, who was told in September that the end of furlough meant she was being made redundant from her job at a craft company only three years before she’s due to retire. 

“Her employer was very communicative throughout the lockdown,” Rachael says. “They were gutted to let her go but there was nothing else they could do. She knows that she can’t just move into another job and that’s what’s scaring her the most. She doesn’t know if she can claim Universal Credit (UC), either, or what she’d get if she did. My dad’s already retired too.” 

Meanwhile, Ben, who worked as a recruiter at a London fintech company, says around 10% of his organisation – mainly the lower-paid employees like him – were laid off. As someone involved in the renters union, it hasn’t escaped his notice that no formal eviction ban has been reinstated alongside furlough this time around. “I’m OK,” he says. “I can stay with my parents and my girlfriend. But there’s a backlog of nearly 60,000 eviction notices in the courts. Imagine being made homeless this winter.”

Others, however, don’t have to imagine. Laura* and her partner were both made redundant from the same small marketing firm in northeast London in September and their concern about keeping a roof over their heads has been growing since. 

“There’s nothing for us. Nothing,” she says. “Every opening in our sector has over 300 applicants. UC doesn’t come close to covering our rent. My mum helped in the first month with her savings, but now we’re really behind.”

Although no legal action has currently been taken against them, Laura says that last week her landlord sent her nine emails asking for an estimated payment date – persistence she puts down to the fact that many of the tenants in the house’s other flats are in the same situation. “My mum already lives with my little sister in a one-bed, and my boyfriend isn’t in touch with his family,” she explains, “so unless something big changes it’s more than likely we’ll be couchsurfing by Christmas”. 

These anticipatory redundancies have also created unnecessary problems with other forms of welfare. Briony, who lives in Wales, was 34 weeks pregnant when she was laid off from her bar job and, as a result, hasn’t had access to Statutory Maternity Pay. “I met all the requirements,” she says, “but due to a Covid-related delay I missed the deadline and due to my redundancy, I didn’t get an extension. In hindsight I could probably have challenged it, but who has the legal resources to make that sort of claim when they’re living off 80% of the minimum wage?”

Instead, Briony gets Maternity Allowance at a loss of about £400 per month. “It’s been an adjustment,” she says. “My partner has recently found work, and I’ve had family to support me with my own growing family. But many aren’t this lucky.”

‘We deserve better.’

The problem employers faced was that the original JSS required them to contribute 33% of payment for hours not worked in businesses staying open under tiers 1 and 2, and only employees who kept up 20% of their regular hours could get government support. Plenty felt those conditions were going to be untenable, so even workplaces that expected to stay open made redundancies. 

“In September, when the tier system was introduced and Leeds was placed in Tier 2, we had a meeting about likely redundancies,” recalls Sam, who worked part-time in a bar in the city. “A week later I was told I’d been laid-off due to a drop in custom. They’ve said if business picks up again they’ll hire me back, but I’d obviously prefer the safety net of furlough.” 

Indeed, it’s outside of southern England that the injustice of these redundancies is most acutely felt. Calls for full 80% furlough as Greater Manchester and Wales went into their respective local lockdowns were denied; while, the treasury decided that, under the JSS, just 67% of wages was sufficient for northern and Welsh workers in businesses forced to close – an inequity that prompted Liverpool’s Metro mayor to observe that the government sees northerners as worth 13% less than their southern counterparts. Briony echoes this frustration, saying, “We all pay into the system that’s mean to support us. Many [of us who are] now left unemployed have worked all our lives and we deserve better”.

 

 

And while Saturday’s announcement means full furlough for the English lockdown, the government has failed to confirm whether the same package will be available for the UK’s devolved nations, should they have to go into later lockdowns too. The Scottish Tories and the SNP have been united in demanding clarity; none has been forthcoming.

 

 

Despite the thousands of jobs lost as a result of the Tories’ reckless insistence that there would be no extension to furlough, when asked in the Commons on 2 November to apologise to those who had been affected, the prime minister refused to do so. And while some have speculated on the motivations behind the late announcement – posturing, forced casualisation, genuine incompetence – it doesn’t really matter. For those signing on for Universal Credit as their rent arrears build-up, or starting a new job hunt as the market plumbs new lows, the outcomes are the same.

*This name has been changed.

Francesca Newton is a freelance journalist based in London.

Published 5 November 2020

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