Furlough extended until end of September?

[Thedarksideofthemoon30]

Wtf.. how are we ever going to pay this back? And why have they extended it?!

I think promoting wfh will continue in line with furlough to allow time for businesses to accommodate social distancing and masks (if still required) and also for everyone (who wants to be) to be vaccinated.

My worry is that October is likely to see the start of the third wave. I just hope it’s a small and manageable one.

@kolo

Wonderfully worded.

I think the problem is many see furlough as just people sitting at home being given money. They do not realise the impact mass unemployment would have as you have explained.

I’m so pleased to hear furlough has worked out for your business and kept your staff in employment. A prime example of how successful the scheme can be. The quicker things can open back up once the restrictions are lifted the all the better for the economy too.

@kolo

The point I believe is still missed. Why does furlough pay more than UC? And if it is to pay more, why not make it a loan like a student loan? At least UC claimants are looking for work.

Housing benefit is not paid for mortgages, so there is no reason to pay for mortgages on furlough. People who lose their jobs for a different reason are not treated so well. Nobody who owns their house (i.e. no mortgage) would have an issue - only those who haven't saved - why do people assume they would not be of work for a year? Thew pandemic doesn't matter - it's a normal course of events.

The government could loan the money to cover mortgages to the individual and tax it back from them personally in the same way as student loans. Other people should not be paying people to own a house - the government could take ownership and charge rent if needed.

I realise that furlough is technically paid to businesses - but in practice the business is just a channel - the business has no choice where to spend it and is allocated per person. In essence it's paid to the employee.

@sandandseashores it's not just technically paid to businesses. It's only paid to businesses. Do you know how many businesses there are in UK? Quick google tells me 5 million ltd companies (like mine). That's not including Self employed people. We cannot afford - as an economy - to let these businesses fail. If they fail, they can't spring back as soon as lockdown is lifted, and there'll be repercussions for years. Other than a bit of an increase to UC, there hasn't been any fully subsidised coronavirus relief to individuals, has there? And you can't ask individuals to repay loans given to their employers.

If everyone furloughed received the same money as UC, it wouldn't take many weeks before households folded - mortgages foreclosing, repossession and cheap sales, the house price would crash throughout the economy. So those people who own their house outright (as you talk about) would loose a significant part of the value of their asset. An economy in bust doesn't just affect those without work.

I can't not mention how bizarre it is to claim that people who own their houses without mortgages are just good savers. I can't be bothered to google the stats for you, but most people who own their own home can only do so by having a mortgage. Is an investment, not poor saving skills. Those without mortgages id say are significantly made up of people who have paid off a mortgage (over many years) or inherited the property. You don't end up owning a house outright through good saving skills.

It doesn't really matter what's fair. The govt are trying to save the economy and make it as quick as possible to recover. That won't happen by allowing a million businesses to collapse and 11 million people become unemployed www.statista.com/statistics/1116638/uk-number-of-people-on-furlough/.

The ins and outs of furlough are a sop really, it's an economic device to soften the blow. Economic tinkering on this level always has unintended consequences.

It's not an And/Or gate, it's always far more nuanced.

It will be interesting to see how it shakes down.

I'm broadly in agreement with furlongh though. Why wouldn't you be?

You'd have to be an economic cunt not to be.

Was one reason for furlough that the government assumed (possibly wrongly, i don't know) that without it there would not be public support for requiring businesses to close? Because of the effect pp have described on unemployment, mortgage repossessions etc.

So that whether fair or otherwise (and I do see that the difference between furlough and UC is very marked) furlough was necessary if the lockdown (or the business closure part of it) was to be maintained. (You could still have had a lockdown even without public support of course, but it is very much easier if the majority support it.)

@Youhavetoquitwhileyoureahead I imagine that was a part of it - the cabinet seems to be full of egotistical, populist career politicians desperate to look good and get the glory days for saving the day.

I also think that there must have been some strong advice to provide support for people in lockdown. Financially desperate people will do a lot of things they wouldn't normally do to try to make ends meet and essentially keep food on the table and a roof over their heads. At the very least, there'd be millions of people not following lockdown rules from sheer desperation. At worst there could be criminal activity and civil unrest. The furlough scheme has meant most people have toed the line and followed the rules (I don't mean the social rules here - not talking about 3 people having a coffee in a back garden).

"Financially desperate people will do a lot of things they wouldn't normally do to try to make ends meet and essentially keep food on the table and a roof over their heads. At the very least, there'd be millions of people not following lockdown rules from sheer desperation."

Yes good point Kolo - although is furlough considerably higher than UC plus HB - presumably yes, for people who are buying rather than renting?

We'll only see how successful the furlough scheme was when it's removed and we see how many jobs were saved, and how many furloughed staff are made redundant anyway.

My DH and I run a business employing 35 people. Although not one that was forced to close our customers mostly closed down in the initial lockdown meaning we lost 95% of our income overnight. We furloughed 30 of our staff; if we had not been able to do that we would have gone under and 35 people would have lost their jobs. There's no way we could have afforded to pay 30 people's redundancy pay without going under, we just don't have that sort of cash.

Our customers gradually went back to work last autumn, although a few went down so we did have to make a couple of people redundant. Now we have several people shielding until at least the end of March that are furloughed and a few people on flexible furlough depending on work loads. Again if it wasn't for furlough those on flexible furlough would have lost their jobs.

Once the economy is back up to speed and shielding is over we expect to have everyone back from furlough in skilled jobs earning decent money and paying their taxes, this is why furlough is such a good scheme and has saved so many businesses and jobs.

Furlough will be a lifeline for some companies. For others, even with that, they will not be able to survive. There are a lot more redundancies to come sadly.

They’ll be mass unemployment either way.

As I said earlier, I’m getting 1000 applications for 20k a year admin jobs.

@Donotfeedthebears

They’ll be mass unemployment either way.

As I said earlier, I’m getting 1000 applications for 20k a year admin jobs.

Without a doubt. Unemployment is going to continue to rise. But 11million people were furloughed in January. There's about 30million employed people. So clearly it would be an absolute disaster beyond anything we've seen to let a third of our workforce become unemployed, economically inactive and being supported by the remaining 2/3rds through benefits.