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Gloucestershire Business News

Small businesses must be released from furloughing "straight jackets"

Mike Cherry

Part-time furloughing is key to any economic revival according to the Federation of Small Businesses.

The Bank of England's latest Monetary Policy Report forecast a five per cent rise in the unemployment rate next month to its highest level in more than 25 years.

And new figures from the Office for National Statistics show 19 per cent of staff are furloughed under the Government's Coronavirus Job Retention Scheme.

More than 16.5 million people work for smaller businesses, equating to 60 per cent of the private sector workforce, and the FSB has called for help to get them back in business.

National chairman Mike Cherry said: "Today's figures are a stark reminder that millions of jobs are stake in the weeks ahead.

"As we look to recovery, small firms must be allowed to get back on their feet one step at a time - 16 million jobs depend on it.

"Our members are telling us in no uncertain terms that part-time furloughing is the way forward: allowing staff to return to work for a few days a week while remaining furloughed for days when they're not required."

He continued: "The economy is not suddenly going to start firing on all cylinders overnight. Adjustments to the job retention scheme need to reflect that fact.

"Government must avoid applying sector straight jackets that don't work for small firms.

"There are far too many businesses that don't fit neatly into one box, like small companies that mainly supply to hotels, but aren't classed as hospitality firms.

"We need to see these changes made from the beginning of June as small businesses begin to restart.

"Orders are going unfulfilled because a few hours work doesn't justify bringing somebody off furlough. Businesses can't even quote for jobs to be completed once restrictions are eased. Time is of the essence."

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