Analysis by the Labour Party has found that 320,000 jobs in rural communities are at risk if the Conservatives “persist with their disastrous one-size-fits-all plan” to withdraw the job retention scheme.
Using research from the National Institute for Economic and Social Research (NIESR), which said that 1.2 million people will be made unemployed by the ending of the furlough scheme, Labour examined the areas most heavily affected.
The party has reported that nearly a third – 31% – of the jobs lost will be in rural and semi-rural communities in England, and that these losses could result in a 60% rise in unemployment in these areas.
Commenting on the analysis, Luke Pollard said: “Rural communities and small towns have been hit hard by austerity and are already facing severe challenges, including access to transport, educational opportunities and good quality housing. They cannot afford for hundreds of thousands of jobs to go.”
According to estimates published by the Office for National Statistics, over half a million people in rural and semi-rural communities across Britain are currently unemployed.
The area in England with the highest proportion of employees on the furlough scheme is South Lakeland in Cumbria – where 40% of all workers have been furloughed.
This latest analysis from the Labour Party follows a warning from the National Farmers Union that this year will likely see the worst wheat harvest in the country since the 1980s, following several consecutive years of extreme weather.
The Shadow Environment Secretary added: “The government should be working with businesses and unions to target support where it is needed most, not ploughing ahead with a one-size-fits-all approach that will leave whole sectors of the economy struggling.”
Under the initial programme established under the furlough scheme, businesses have been able to claim 80% of a staff member’s regular monthly salary, up to a maximum of £2,500. But the government is winding down this support.
The government is still covering 80% of salaries with businesses now paying NICs and pension contributions. It will step down the percentage of workers’ wages covered up to October 31st, after which the scheme will be completely shut down.
Labour has repeatedly called for the Chancellor to rethink this “one-size-fits-all” approach and for the government to extend the furlough scheme for businesses in sectors where it is most needed.
The analysis from the party also suggested that up to 42,000 workers currently on the job retention scheme in urban and rural areas in the North East could find their employment at risk if the furlough programme is ended prematurely.
The Office for Budget Responsibility predicted that three million workers on furlough will experience a “work shortage” by the end of October, and a 2.7 million increase in unemployment in the fourth quarter compared to pre-crisis levels.