The United Kingdom manufacturers had requested Rishi Sunak, the Chancellor of the Exchequer to extend the flagship furlough program in the midst of a concern that almost a third of companies plan to cut jobs in the next six months. Survey by MakeUK industry group with 226 employer respondents disclosed that 62% wanted the program to be extended beyond the end of October 2020. The Treasury is reported to paid as much as 80% of wages. As 30% of the respondents stated the intention to cut workers, the extension of the plan could deter some “wave of redundancies”. Chief Executive of MakeUK, Stephen Phipson said that the move of protecting key skills should act as a strategic national priority, as the skill will be the foundation in getting the economy running, and urging government’s greatest support.
Germany has confirmed in extending the equivalent program until the end of 2021, and France also at the point of considering an extension. With the fact that neighboring countries have done the moves, Sunak has been under pressure in the wages subsidize program continuation as Oct 31 is when the program is scheduled to end. Phipson said that an extension of the Job Retention Scheme to sectors that might not be most important but have been impacted hardest should be the starting point. If the step is failure, the risk of losing key skill when we can least afford will leave us out of step with major competitors.
The Labour Party opposition has criticised the U.K’s approach which seems “one size fits all”, and economists also reminding that the premature support removal will lead to the unemployment above 3 million before 2020 end. The aviation and automotive sectors are two examples of the most needed furlough extension in order to key skills conservation, also research and development investment worth around 5.9 billion pounds yearly to the UK economy. MakeUK data also shows that manufacturer sector have 69% on-furlough staff, 37% of them expected it will take more than a year to return to normal, 42% have already cut jobs in pandemic, 30% planned to cut jobs in the next 6 month and 36% may do, and only 18% are operating in full capacity.
