Some 1.8m jobs are at risk despite the Chancellor’s package of support for jobs as Boris Johnson prepares to put the North back into lockdown, a think tank has warned.
The Institute of Public Policy Research (IPPR) claims that when the furlough scheme ends at the end of this month, the replacement measures Rishi Sunak announced on Friday will not be sufficient to incentivise firms to retain staff – saving only 230,000 jobs.
The think tank urged the Treasury to redesign the Job Retention Bonus, which offers employers an extra £1,000 for keeping furloughed staff on until January, and the Job Support Scheme, which will pay two-thirds of each employee's salary up to £2,100 a month.
They are flawed because only workers earning between £625 and £987 a month are expected to benefit – only about a tenth of workers currently on furlough, according to the IPPR.
People who fall below the lower limit do not qualify for the Job Retention Bonus, but the bonus is too small to make it worth keeping workers earning above the upper bound.
Clare McNeil, associate director of the IPPR, said: “It is absolutely right for the Government to bring health and economic measures in line with each other – recognising that businesses forced to close due to lockdown measures need compensation to do so and to protect jobs and incomes.
“But a far larger number of people are being abandoned by the Government due to the flawed design of the Job Support Scheme.”
Instead, researchers say the one-time Job Retention Bonus should be paid monthly in proportion to wages for hours worked part-time, up to £2,500. They also argue it should be targeted only at firms that qualify for the Job Support Scheme, subsidising part-time work.
The IPPR calculates that this would cost £7.4bn, less than the total budgeted for the Job Retention Bonus – £7.5bn.
Separate data from Springboard, the retail researcher, showed 0.3pc fewer shoppers visited UK retailers last week than the week before, with the biggest declines seen at retail parks and shopping centres, and a slight improvement on high streets. Compared to last year, footfall was down 30.9pc.
Diane Wehrle, of Springboard, said the impact of the 10pm curfew had been short-lived, with the number of visitors to high streets in the evenings partially bouncing back from the double-digit decline the week before.
However, she noted a “north-south divide” in how fast footfall had recovered after 11pm. In the Midlands and North, where some towns have strict restrictions in place, footfall fell dramatically. Some southern areas instead recorded rises in the number of visitors.
“The impending announcement from Boris Johnson later today of tiered restrictions across the UK, with more severe restrictions likely in the North, is likely to drive down footfall further in those areas facing the tightest rules around movement,” Ms Wehrle said.