Jobs in UK hung at reopening speed as holidays end

It took Lily Andrassy two years after graduating in 2014 to land her dream job as a wardrobe assistant for the Royal Shakespeare Company’s production of Mathilde. But since the UK’s first lockdown began in March 2020, she has been on leave, picking up scraps of work as a seamstress and worrying about her future.

” I have a diploma. I am highly qualified and experienced. I am good at what I do. . . I worked hard for my career, ”she said. But as she approaches her 30s in a few weeks, if she loses her footing in an industry that is struggling to survive, she will have to “start a new career from scratch”.

With luck – provided there is no further delay in the final easing of Covid-19 restrictions – Andrassy will be back to work in late August, preparing for Mathilde to reopen. Although many people in the theater lost their jobs in the past year, in the uncertain months before the leave extended, the RSC has kept her and is ready to pay the contribution to her salary that will be demanded from employers at from July, when the regime begins to end. .

This is exactly what the Coronavirus Job Retention Scheme was supposed to achieve: protect jobs and income at the height of the pandemic but also, and most importantly, preserve the links between qualified personnel and employers, so that businesses can reopen. quickly as restrictions are lifted and workers can choose. their careers rather than being forced to make a fresh start.

With a cost of £ 64bn from its inception in mid-May – making it by far the biggest government intervention in Britain’s labor market in decades – it has largely been successful in achieving these goals.

The number of jobs supported by wage subsidies rose from a peak of nearly 9 million in May 2020 to around 1.5 million in early June 2021, according to data from the Office for National Statistics. In June, most were on part-time leave, meaning they were working at least part of their usual hours.

Meanwhile, hires have increased and the Bank of England predicts that unemployment, which stood at 4.7% in the three months ending April 2021, will increase only slightly with the phasing out of holidays. , peaking at just under 5.5% in the third quarter of 2021. – well below what initially feared.

Yet there is still huge uncertainty about the strength of the UK labor market when leave support is removed. As of July, staff on leave will still receive 80 percent of their regular wages, but employers will have to pay the first 10 percent. This contribution will increase in August and the plan will close at the end of September.

Some analysts believe it should end sooner, arguing that the leave is now obstructing the job market, with hospitality employers finding people reluctant to quit the leave for a new job that could fail if cases multiply.

But Gregory Thwaites, research director at the Resolution Foundation think tank, said reports of worker shortages had been exaggerated and the labor market was still far from fully recovered, bottlenecks in hiring being largely temporary.

“Everyone has to queue to enter the office after a fire alarm. . . that’s what’s happening in the job market right now, ”he said, adding that his estimates suggested that vacancies were being filled faster than before the crisis.

The biggest worry is that most of the people who are still on leave are clustered in industries where activity is still severely restricted, such as hospitality, the arts, entertainment and tourism.

Kate Nicholls, chief executive of industry body UKHospitality, said around 200,000 people in the industry were still on full leave, largely in businesses still unable to open, such as event venues and nightclubs . In addition, up to a quarter of the hospitality workforce was still partially on leave. If the full reopening was delayed beyond July, tens of thousands of jobs would be at risk, she said.

Make UK, the organization of manufacturers, said use of the program was no longer widespread among its members, but some, especially in the aerospace industry, still counted on it to retain highly trained staff.

While most large employers have now made the cuts they felt were necessary, with layoff notifications at pre-pandemic levels, many small businesses have delayed making these tough decisions.

“A lot of [travel] agents are very concerned about September 30, ”said Sue Foxall, managing director of Kinver Travel Center, a small company based in Staffordshire. With virtually no income since the start of the pandemic, she has already laid off a staff member, but will keep two longtime employees on leave for as long as possible in the hope of getting back into business and because she cannot get by. allow severance pay. But in September, “we have to make a big decision,” she said.

“There is a lot of anxiety and worry about job insecurity,” said Emma Cross, managing director of Citizens Advice in West Sussex, one of the areas where the leave has been heavily. used as many jobs are related to Gatwick Airport and related hotel businesses. .

The charity has seen more and more people asking for help because their employers plan to shut down in July, as companies cannot afford top-ups and severance pay. Other companies in similar straits have switched people to zero-hour contracts to avoid liability, Cross said.

However, while the end of the holidays will undoubtedly lead to job losses, some believe that these will be offset by the explosion in current hires in companies that are currently growing.

“The aim should be to prevent unemployment, not to prevent job losses,” Thwaites said, adding that the unemployment rate would not necessarily increase if the flow to work continued at its current rate.

If the economy can fully reopen by September, the numbers still supported by the leave scheme should have dropped to a point where it “ends with a whimper, not a bang,” said Tony Wilson of the Institute for Employment Studies. He added that this is “a policy that we should all be really happy to see the back of”.

But if more bad news derails the government’s plans, Andrassy said for her and many others, the effects could be “catastrophic.”