With news of a further lockdown but with no plans to extend furlough, many SMEs fear for their workers’ job security and their own business survival. New Office for National Statistics (ONS) data reveals that the UK jobs market is on its way up. We hear from business owners on how the lack of clarity on the future of the furlough scheme may be masking a looming economic crisis for workers.
Jeremy Thompson-Cook, Chief Economist at Equals Money believes that recovery from the darker days of the pandemic was always going to be a double-edged sword and while tills may be ringing, and pub gardens full, government support and subsidies will start to reduce in the coming weeks, increasing the financial burden on UK SMEs.
”Rents are due, evictions become legal again and those companies that have furloughed the 3 million people still on the scheme will have to start contributing to those wage payments,” he says.
”This is the tide rolling out and we will see who was swimming naked; insolvencies and redundancies will rise, and further government support will be needed to bring those 3 million people back into work or training to prevent further longer-term damage from this virus.”
“With further pulls on their cash flow, control of costs and knowledge of pricing has never been more important for the SMEs that drive the UK industry.”
ONS data: The highlights
- The number of payrolled employees has increased for the sixth consecutive month, up by 197,000 in May 2021 to 28.5 million. It is however 553,000 below levels seen before the coronavirus (COVID-19) pandemic. Since February 2020, the largest falls in payrolled employment have been in the accommodation and food services sector, people aged under 25 years, and people living in London.
- Between February and April 2021, there was a quarterly increase in the employment rate of 0.2 percentage points to 75.2% and a quarterly decrease in the unemployment rate of 0.3 percentage points to 4.7%. The economic inactivity rate was largely unchanged on the previous quarter at 21.0%.
- The number of job vacancies in March to May 2021 was 758,000, only 27,000 below the level before the coronavirus (COVID-19) pandemic in January to March 2020; most industries have recovered to show vacancies above pre-pandemic levels.