POLITICS
17/05/2020 07:00 BST

There Are Workers On Furlough Whose Jobs 'No Longer Exist', CBI Warns

The CBI's Josh Hardie tells HuffPost UK about the "harsh reality" of job losses post-coronavirus lockdown.

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There are workers currently on furlough and having their wages paid by the government whose jobs “no longer exist”, the CBI has warned.

Deputy director-general Josh Hardie said the “harsh reality” was that some people’s roles will have already become effectively redundant despite them still being in post and paid under the coronavirus job retention scheme.

Chancellor Rishi Sunak this week announced an extension to the end of October of the furlough scheme, which sees the government pay 80% of workers’ wages to keep them in post while their businesses cannot operate under lockdown restrictions.

But from August businesses will have to begin contributing a portion of workers’ wages, with reports suggesting the state subsidy may be cut to 60%.

Hardie suggested that allowing employers to contribute and take some staff back on part-time could see others being made laid off.

In an interview with HuffPost UK, he said: “At the moment furlough is a hibernation tool but it also needs to develop into a reanimation tool.

“There is a harsh reality that some people on furlough at the moment will be in jobs that actually no longer exist.

“It is better to release them into the labour market for training than it is to keep them on furlough.

“Employee contribution actually helps drive that process.”

Hardie, however, stressed that businesses that cannot get up and running due to the expected extended lockdown in their sectors, such as hospitality and entertainment, need ongoing support as furlough is gradually lifted for others.

“We need to be able to support those businesses that will be there later in the year but for very good reasons can’t start up right now,” he said, “whether that’s through furlough or whether that’s through other mechanisms.”

There will be job losses. We have to be straight about that

Hardie said there would not be a “cliff edge” as different firms would begin scaling up post-lockdown operations at different times.

The CBI wants firms to comply with measures to stop the spread of Covid-19, partly to avoid a more damaging second peak.

But Hardie said there still needs to be a “difficult conversation” about how to manage risk while getting businesses “back on their feet”, and warned that job losses are inevitable as the UK tips into recession.

“We’ve all seen the statistics, the projections for unemployment heading up to 10%.

“I think it’s been clear all along that, whatever government does, whatever businesses do, this is a major economic challenge and there will be job losses.

“We have to be straight about that, we have to be realistic about that.

“It’s that consideration which is so important as we look to the future because absolute health is a priority but we cannot ignore the impact on the economy and the impact that has on long-term health as well.”

He added: “We have to be able to talk about risk mitigation and management at the same time as getting businesses back up on their feet.

“It’s a difficult conversation, it’s a careful conversation, but it is at least where this week has started to take us.”

Do we need quarantine for travellers?

Hardie suggested the government should at least pause its plans to introduce 14-day quarantine for all travellers coming to the UK, warning it could badly damage businesses.

He gave the example of an engineering firm in Germany making medical equipment which only German engineers could fit or maintain in the UK, saying this would not be possible under the proposals.

Even if there were an exemption for business travellers, there is a risk that demand would be so suppressed that there would not be flights to bring them to the UK, he said.

Stressing that there needs to be a “critical mass” of travellers to ensure regular flights, Hardie said: “If [quarantine] is necessary for health then it is necessary for health.

“If the measure is the right measure then we have to find ways around it.

“But I think there is confusion.

“Firstly I think there could be more clarity on the health rationale and whether there are other ways of mitigating the impact.

“Other countries for example are using temperature checks or testing and tracing.

“The impact is not just on the travel industry or aviation, although that is critical and severe.

“That plays out in every sector in the economy, the criticality of moving people around.”

If the quarantine is imposed, Hardie said it should be kept under “constant review”.