ITV News Business and Economics Editor Joel Hills reports on the impact the furlough scheme has in areas that are most dependent on it in the UK
The arrival of coronavirus in the UK was, first and foremost, a public health emergency but it had dire economic consequences.
The recession that followed was deep and man-made, in the sense that it was caused by the deliberate shutting down of activity in an attempt to contain the spread of the virus.
The upheaval that followed inevitably caused hardship and distress but households and businesses were protected from the full force of the downturn through an unprecedented, humanitarian response by the government.There have been setups, frustrations and false dawns during this pandemic but a recovery is underway and it is looking more robust than any economist would have dared to predict a year ago.
Owner of Double S Travel, Steve Pattenden, says he will be unable to keep his staff on after the furlough scheme ends
The emergency feels like it might finally be ending and the government seems determined to press ahead with the removal of emergency support.Last week, the chancellor confirmed the Job Retention Scheme will end, as planned, in September.
Furlough was designed to encourage companies to hold onto their staff as their businesses went into hibernation. It has been an extraordinary success, mass unemployment was avoided.By mid-July furlough had cost the government £67.4 billion and supported 1.3 million employers and 11.6m employees.
Just over a million people still have their wages subsidised by the taxpayer, in the next six weeks they’ll discover if their employer can afford to take them back.Rishi Sunak also intends to stick to his plan to end the £20 a week uplift to Universal Credit from October, a move that will affect six million families in the UK.These may strike you as necessary decisions but there will be people on the receiving end of them and we wanted to travel to those places in the UK where the impact would be felt most keenly.
'We expect 500,000 families to fall into poverty' if the Chancellor goes ahead with the cut to University Credit, senior economist at JRF, Rebecca McDonald says
Six months ago the Joseph Rowntree Foundation (JRF) published a list of 20 towns and cities which it said were most exposed to the withdrawal of financial Covid support.The list has changed. Seaside towns like Blackpool, Great Yarmouth and Margate have fallen off it.
All three continue to have very high numbers of Universal Credit claimants but the proportion of their populations on furlough has tumbled on the back of another summer staycation.By contrast, airport towns like Luton and Slough remain vulnerable. In Luton, the airport is the biggest employer, 10,000 jobs depend on international travel bouncing back.
'We'll need to consider whether to let people go' if furlough scheme does not continue, Luton airport's CEO says
August is peak season but, as we found out, traffic is down 75% on pre-Covid levels and a quarter of the airport’s staff remain furloughed. The industry said unless further financial help is forthcoming there will be job-losses in the autumn.The big city centres also continue to struggle. None more so than London. Of the 15 places the JRF lists, 10 are in the capital.London has an abundance of tourist attractions but still very few tourists, its offices remain abnormally quiet. Many pubs, restaurants, cafes and shops have yet to reopen, their staff remain furloughed in London’s outer boroughs.
The UK economy is bristling with vacancies but London is the one region of the UK where the level of jobs advertised remains well below pre-crisis levels.
The 17 places in the UK that remain vulnerable to the withdrawal of furlough and cuts to Universal Credit
Barking and Dagenham