Four ways Rishi Sunak can defuse the furlough jobs timebomb

Make the furlough scheme “flexible”

British workers are not allowed to carry out any work for their employers while they are furloughed. 

This makes it hard for firms to keep in contact with customers and suppliers and increases the risk of long-term damage to worker productivity as idle employees begin to lose skills. 

More than three-quarters of UK firms using the job retention scheme say allowing furloughed staff to work part time, which is allowed in Germany and Sweden, would help them get back up and running, according to a survey by CIPD, the professional body for HR professionals. One in six say more than half of their staff could come back part time if the scheme is changed. 

Peter Cheese, chief executive of CIPD, says allowing employers to pay employees for a few hours’ work each week will reduce the risk of large-scale redundancies in this next phase of the crisis. 

Sector-by-sector extensions

The crisis has not affected all industries equally. Office-based firms are adapting to home working. Construction sites are getting back up and running with appropriate social distancing. But hospitality and travel face a long road back to normality. 

The furlough scheme was a blunt and expensive instrument due to the speed at which it was drawn up. Targeting it specifically at sectors that cannot viably reopen or take back all their staff would cushion the blow to workers at a more reasonable cost to the taxpayer.