The HMRC furlough scheme, officially known as the Coronavirus Job Retention Scheme, was introduced in April 2020 and will finish at the end of this month – and Sir Tom Hunter believes this moment could be a major milestone as we move out of Covid.
Speaking on the Go Radio Business Show with Hunter & Haughey, he said: “I actually thought the furlough scheme was a really positive and bold initiative by Chancellor Rishi Sunak. Speaking to businesses during the pandemic, I found furlough really helped stave off big lay-offs. Now we hear there are more vacancies than there is unemployment.
“We are around 100,000 HGV drivers short and we have EU nationals leaving UK employment because of Brexit.
“So I think there’s some profound, structural changes happening in the UK and Scottish employment markets that are going to be with us forever... and maybe it’s not going to be such a hard landing coming out of furlough than I first thought.”
Also speaking on the show, Lord Willie Haughey agreed the furlough scheme has saved hundreds of thousands of businesses from going bust, but added: “My worry now is, although there are 1.6 million vacancies in the UK at the moment, a lot of people have become used to sitting about the house.
“When Rishi Sunak gave the offer last year, halfway through furlough, that you could go back to work and we could still give you some money, I thought, why are you doing that? I now realise why: people have become used to furlough money.
“I’m aware of people who, if they were back at work at the moment, would be making a lot more than they’re getting from furlough, but they’re happy enjoying the good weather, sitting in the garden, and are in no rush to go back to their work.
“I believe when we’re out of Covid – and I still think that’s maybe six months away when hopefully we can get back to some sense of normality – we’ll also get the real effects of Brexit. No matter what, we’ll go back to a shortage. Unfortunately, I’m still of the opinion we’ll end up with more people unemployed after Covid than before.”
The show’s host, Donald Martin, editor of The Herald and The Herald on Sunday, asked both business gurus whether we should be worried that estimates suggest 15 per cent of those on furlough could ultimately lose their jobs, amounting to about 280,000 people.
“Of course, you’re worried when these things happen,” said Sir Tom.
“But profound changes are happening in the labour market and people maybe don’t want to go back to humdrum, tedious jobs.
“Technology will probably take care of that but that’s also why we need to up our game in training, development and education programmes so we can help the workforce get into better jobs – roles where they do want to go and work.
“I fully understand people are making lifestyle choices, especially if you’re going back to a job that’s tedious, with long hours and you’re on minimum wage.
“So we need to up the training, the apprenticeships, which we’re banging on about, and Willie’s the champion of. I think we have to up our game in that.”
Lord Haughey agreed, adding: “Going forward we have to to come up with good ideas to get people into other employment because there’s no doubt there’ll be more than a hundred thousand vacancies in the hospitality industry alone and I think that could be a conservative estimate.”
Sir Tom concluded: “The furlough was important but we’re now emerging from it and there are new opportunities. So rather than call it furlough, I would call it a transition to a better place, to a better job, with training and support.
“Let’s transition to a better place.”
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