Tears and fears for UK's furloughed as £70bn wages scheme closes

London hardware chain Tool Shop one of many firms faced with prospect of making redundancies

The UK's £70bn extended jobs retention scheme came to an end on Thursday having helped to pay the wages of up to 12 million workers.

Despite a warning from think tank the Resolution Foundation that as many as one million furloughed workers could be left in limbo, the Bank of England is predicting only a slight increase in the unemployment rate.

One of the businesses facing up to wielding the jobs axe is Tool Shop, a chain of hardware stores around London.

In 2018 the company had 12 branches and 50 staff members but high property taxes for businesses and changing shopping habits put pressure on the independent outlets. Three shops had to close in 2019. Then the pandemic hit.

Sarah Edmiston, 53, who heads human resources, says the company then closed five branches in 2020 and merged two. This week they were forced to lay off three staff and make others part time. Now 11 people work for the chain, including the director.

 

Redundancies, when they come, can be painful and personal.

Ms Edmiston has been with Tool Shop for nearly 21 years as it built its network from scratch, and she considers her colleagues to be family.

“It feels really sad,” she said. “We had 12 stores in 2018 and around 50 staff,” she said.

Tool Shop’s customer base relies on commuters and tourists, both of which are in short supply. Workers are beginning to trickle back into the capital but numbers are still well below pre-pandemic figures.

“I don’t know if we will ever get back to the figures pre-Covid,” Ms Edmiston said, especially if working from home continues.

Martin Matio, 69, has been working with the company since day one. He knows the operations like the back of his hand. He and Ms Edmiston hope that customers will recognise the valuable personal service they offer over online shopping.

“The customer knows what they are buying right away, what they need right away, and they can get it right away,” said Mr Matio.

Chancellor Rishi Sunak said he was "immensely proud" of the furlough scheme and, despite last-minute pleas for an extension by some Covid-hit companies such as Tool Shop, said that now was the right time to bring it to an end.

Universal credit cut another blow for hard-hit families

The winding down of furlough comes only days before Mr Sunak reverses a £20 temporary uplift of the universal credit benefit. The cut has led to concerns even in the ranks of his own Conservative Party that many people could be left destitute this winter – especially given rising gas and electric bills, an injurious consequence of Europe's energy crisis.

To offset these rises, Mr Sunak announced on Thursday a £500 million fund to help immiserated families through the winter.

“I think there are concerns over what is going to happen to the labour market as furlough unwinds and we run in to the end of the year. Added to that are financial concerns around potential changes to universal credit, what’s going on in the energy market at the moment.” said Stuart Lewis, founder of Rest Less, a digital community for the over-50s.

With the ending of furlough there are concerns that the job market will be flooded as jobseekers need to find employment.

Diana Gaglio, 53, from Bedfordshire, has been job-hunting for nearly a year after losing her post as an entertainment manager for a holiday company when Covid-19 gutted the travel industry.

She’s fearful that things are now going to get a lot harder.

“There seems to be quite a lot of temping stuff out there so there does feel like there will be some work but in terms of long-term future I am concerned about what I am going to be doing.”

Despite having a wide experience of managerial jobs, Ms Gaglio believes her age may be against her.

“I do have a sense of society making me feel I’m an older person,” she said.

“I personally don’t think I am but there might be people out there who have a different view on that.”

Staff shortages, though, have hit several sectors due to a combined effect of the pandemic and Brexit, which led to many foreign workers leaving the UK.

Britain has record job vacancies at more than one million, while the unemployment rate stands at 4.6 per cent, down from a pandemic-peak of 5.2 per cent at the end of last year.

A significant shortage of lorry drivers has led to empty supermarket shelves and fuel supply issues, with long queues of motorists at filling stations for about a week.

The government maintains the pandemic is to blame but critics accuse ministers of a lack of foresight in replacing thousands of foreign drivers who left the country.

Last weekend the government reversed post-Brexit entry rules to offer foreign truckers a three-month visa waiver to help to improve supply chain issues.

But industry leaders have argued that this alone will not solve the problem.

Updated: September 30th 2021, 4:35 PM
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