A YORK business boss has branded the decision to axe the furlough scheme next month “ludicrous” – saying he has been forced to cut 50 jobs due to mounting financial pressure.
And companies, MPs and trade unions said the closure of the scheme could be a perfect storm, leading to “significant economic impact” for the city.
Data released from the Coronavirus Job Retention Scheme (CJRS) shows that a third of private-sector workers are still on furlough in York – higher than the national average.
In York Central 17,700 people – 34 per cent of the eligible workforce – are still on the furlough scheme, while in York Outer the number is 12,600 people, 29 per cent of the workforce.
Peter Liney, CEO of tourism company GreatRail, said the firm had suffered financially from the coronavirus quarantine rules for people returning from overseas.
The company, which has operated in York since 1947, placed 80 people on furlough, and desperately wanted to bring them back – but has been forced to let 50 workers go.
Mr Liney added: “It’s heartbreaking. I was left with no other choice. A lot of our packages focus on Europe and due to the quarantine rules, nearly all of them got cancelled. This left us with money going out but nothing coming in and, consequently, we were forced to restructure the company.
“I have pleaded with the Government to make the furlough scheme sector-specific. Companies like ours, through no fault of our own, have not been able to operate at full capacity for months now.
“We need help into next summer so we can survive until demand picks up and help keep people in employment.
“Other countries have promised a furlough scheme for up to two years. I am furious at our Government. It’s ludicrous to end it. We will end up seeing a tsunami of job losses across the city and the country when the scheme ends.”
Leigh Wilks, president of York & District TUC, said: “We have concerns that the city could take a significant economic impact in the months ahead. Universal Credit claimants, for example, have gone up 166 per cent this year from February to May alone, and when the furlough scheme ends in October, these figures will go up again. The city would benefit from an extension of the furlough scheme.”
MP for York Central, Rachael Maskell, said: “The end of furlough is a terrifying prospect and these figures demonstrate just how much is at stake for the hardworking people of this city.
“The Local Economic Partnership research suggests York may be facing an unemployment rate of 17 per cent, which would be the highest since records began, and this is extremely worrying. ”
A Treasury spokesperson said: “The furlough scheme has helped to pay the wages of over 9.6 million jobs. We will continue to support incomes and employment through our Plan for Jobs.
“We’re helping employees get back to work, through a £1,000 retention bonus. And we are creating new roles for young people with our Kickstart scheme.”
Julian Sturdy, MP for York Outer, said the latest government restrictions would not hamper York’s bounce back.
He added: “The innovative Job Retention Scheme provided crucial financial support for workers during the height of the pandemic but was never intended as a long-term scheme. Instead, the Government is rightly focusing on strengthening the economy to maintain jobs and create new opportunities through our Plan for Jobs, which includes the landmark new Kickstart scheme.”