Government plans for unemployed rise as furlough winds down
By Rob Freeman | 1st October 2020
The Government is bracing itself for a surge in demand on the benefits system as the furlough scheme reaches its final month.
From today, the Government's contribution wages of employees covered by the Coronavirus Job Retention Scheme falls from 70 per cent to 60 per cent (up to £1,875 per month) with employers' contributions rising to 20 per cent.
And today is also the last day for firms to issue redundancy notices if they are planning to cut between 20 and 99 jobs before the scheme ends on October 31.
The Office of Budget Responsibility has forecast up to four million unemployed by next year with work and pensions secretary Therese Coffey confirming the Government was planning for that figure.
She told Sky News: "I think we're in for a similar number in terms of being ready to help people and trying to help them get back to work as quickly as possible.
"We're bringing people into the organisation to respond to the challenge.
"I genuinely hope we don't reach that figure, but it's important we are ready to help people."
Universal Credit claimants rose by 120.8 per cent between March and August to 2.7 million.
Ms Coffey said: "We will do our best to try to help businesses keep going. But we have reached a point where we absolutely recognise we cannot pretend, we've never pretended, we can save every job."
The British Chambers of Commerce warned many of its members faced cashflow difficulties heading into the winter.
Co-executive director Claire Walker told the BBC: "As the Jobs Support Scheme replaces the furlough scheme, and employers are used to pay more towards staffing costs, the Government must stand ready to offer further support to businesses who may be unable to cover their contribution due to continued restrictions and reduced demand."
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