Rishi Sunak said today that he is ‘cautiously optimistic’ that the end furlough will not lead to a significant rise in unemployment.
The Government’s £70billion wage support programme closed at the end of September.
One million people were estimated to have been still on the scheme at the time it ended, leading to fears of job losses.
Mr Sunak however stated this afternoon that he believes the end to furlough will not be as disastrous as people fear.
He informed his peers on the Economic Affairs Committee of the fact that September redundancy notice levels were actually lower than last summer.
Rishi Sunak revealed today that he is ‘cautiously optimistic” that the end to furlough won’t lead to a significant increase in unemployment
The Government’s £70billion wage support programme closed at the end of September. One million workers were estimated to still be on the scheme at the time it ended, leading to fears of job losses.
Ministers had warned job losses would be a ‘part and parcel of the process’ after the 18-month coronavirus assistance scheme ended.
Sunak was quizzed about the impact on furlough ending and he stated that early signs suggested a pretty positive outcome’.
He did however admit that the Government still needs to see official data on the job market for September.
He explained to the committee how the Treasury was ‘encouraged’ during the period leading up to the end furlough. This was because the number of people returning from work was’very high’, which was considered a ‘good indicator’.
Sunak stated that surveys had been conducted by the department asking furloughed workers if they had received a date for returning to work.
‘Again, anecdotally and not completely statistically representative, but those were all indicative of a pretty positive outcome at the end of furlough,’ he said.
The Chancellor stated that, while approximately one million people were still on furlough as of September’s end, half of them were on “flexi-furlough” and so were “already at their workplaces functioning”.
Mr Sunak said: ‘We haven’t seen a tick up significantly in redundancy notices which is another thing we have been tracking.
‘So the levels of redundancy notices in September were far lower than last summer for example when we introduced employer contributions into furlough and obviously what you are seeing at the moment are record numbers of job vacancies.
‘If you look at the ratio of job vacancies to unemployed, which you can match by sector… it gives you a sense of where the labour market tightness is.
‘I think, broadly, we have had about 10 months of rising employment numbers, eight months of falling unemployment. We still haven’t seen the numbers from the end of September.
‘But broadly what I am seeing and when I talk to businesses and all the informal work that we do would lead one to be cautiously optimistic that the employment outcome post the end of furlough will not be anywhere near as bad as people feared and thankfully there is a robust labour market in place to absorb people back in if they are not able to go back to their places of work.’