Toggle high contrast

Time for certainty on worker protection as unemployment rises fast

Published date
Towards the end of last year job losses continued at a very fast pace. Government must end the drip feed of worker and business protection, and announce the extension of the furlough scheme, including for the self-employed, to the end of the year.

Over September to November 2020:   

  • 395,000 redundancies were reported, yet another record high. This is nearly four times the average quarterly rate over the previous five years (104,000) and is 84,000 higher than the worse three-month period during the financial crisis. 
  • Unemployment rose by 202,000 compared to June-August; the quarterly percentage increase of 13.3 per cent was the largest since the Thatcher recession at the start of the 1980s.  
  • The unemployment rate is now 5.0 per cent, corresponding to 1.7 million people unemployed. 

These latest figures from the ONS faster indicators cover for the first time the renewed national lockdown which began on 1 November 2020.  

The chart below shows the resumed switch in working patterns, with a fall in those working in their normal place of work and a rise in those on furlough. The recent peak in furlough was 15.5% of employees in the second half of November following the low point of 7.7% in the first half of October.

Proportion of employees on furlough, WFH or normal place of work
Proportion of employees on furlough, WFH or normal place of work

Reflecting the reduced impact on business closures of the second national lockdown, furlough use is well down on the peak of nearly a third (31.3%) in the first lockdown.  

And more than half of employees were in their usual place of work throughout the lockdown.  

These obviously vary by industry, with the highest proportions back at work in water supply & waste (73%), health & social work (72%) and manufacturing (69%) and the lowest proportions in IT (16%), professional and technical (25%) and arts and entertainment (26%). 

 Working status in the second half of December 2021, proportion of employees
Working status in the second half of December 2021, proportion of employees

And there are worrying signs that workplace transmission is rising, due to inadequate safety measures, a lack of enforcement, and the continued lack of decent sick pay meaning that workers who should be self-isolating are forced into work – see our blog here.  

Jobs and government protection 

While the headlines still make grim reading, some figures have improved.  

The new figures for payroll employees rose for the first time since the start of the pandemic (by 52,000) into December, though are still down 828,000 compared with February 2020. 

Hours worked rose by 10% and are now are down 7% on a year ago. Vacancies were 578,000 over October - December, continuing to rise steadily from the low point of 343,000 in April - June but still some way below the 802,000 of the same period a year ago.   

On a broader view the job retention scheme has doubtless saved many millions of jobs, but the government continues to drip feed these measures to businesses and workers.  

Employment outcomes seem to be influenced by interplays between lockdown and furlough arrangements.  

This can be seen from looking at the ONS experimental monthly measure of unemployment: 

the ONS experimental monthly measure of unemployment: 

The original furlough scheme was announced in March, and in April was extended to the end of June.  

In May the scheme was extended until October, but from August companies were expected to make an increasing contribution to the costs of the scheme.  

Towards the end of October there were some announcements about the happily abandoned job support scheme, and then with new national lockdown measures announced on 31 October the full furlough scheme was confirmed through to the end of March on 5 November

The two peak months for unemployment increases happened around previously scheduled endings of the furlough scheme. Finally, on 17 December (two days after his Spending Review) the Chancellor extended the scheme until the end of April 2021.   

What we want  

These peak changes in and around previous deadlines shows how the furlough scheme supports employment, and the threat of its ending or diluting undermines that support. 

The present April deadline will come all too soon for firms and workers.  

The government must recognise the damage done by withdrawing support too soon, or by failing to guarantee continuation of support until the eleventh hour. 

TUC General Secretary Frances O’Grady said: 

“The more people we keep in work, the faster we can recover. But with the job retention scheme set to end in April, millions of people’s jobs hang in the balance.  

When the government planned to withdraw support last autumn, despite restrictions still being in place, unemployment surged. We can’t let that happen again. 

It’s time to end the uncertainty and anxiety. The Chancellor must urgently extend furlough support to the end of the year to keep jobs safe.” 

Enable Two-Factor Authentication

To access the admin area, you will need to setup two-factor authentication (TFA).

Setup now