As furlough ends employers have a duty to be honest with their workers

Rishi Sunak’s desperate pleading with company bosses not to lay off their furloughed employees once the scheme ends next month will cut no ice with those who must balance the books in the real world of business.

Many industries have been decimated by the virus and the measures designed to curb it, which means some employers will be forced to make cuts to survive.

Most businesses operate on very small margins and cannot afford to simply swallow employee wage bills, especially if sales are on a knife-edge or have failed to return to anything like pre-lockdown levels, no matter how much the Chancellor begs them to do so.

This is why the Government and employers must do much more to get people back behind their desks. Bums on seats is the only way to drive up productivity, restart the economy, and stop the recession that has already landed becoming the full-blown depression many are predicting.

Unemployment has jumped from 3.9% to 4.1% with more than 700,000 job losses since March, but we are kidding ourselves if we don’t accept worse is coming.

Companies that have closed their eyes and crossed their fingers will get a shock when they discover that work levels have not returned.

Job cuts will be inevitable and anyone who thinks otherwise is a fool. To survive employers must be honest with themselves about what the future brings, and they have a moral duty to share this honesty with workers, giving them the best opportunity to safeguard their own futures.

According to the latest figures, around 11% of the workforce remain on the scheme. Whilst it has been seen as a success for many up until now, it will only prove to be a stay of execution for some of those four million people.

The chancellor is facing mounting calls to extend the scheme but that would be madness. He needs to find a way of weaning the country off of it before it ends, but time is running out.

Young people have already shouldered the burden of the lockdown and the £2bn Kickstart scheme can help alleviate their suffering in the future, but Sunak needs to act quickly to avert the worst of the looming catastrophe.

He must turn a deaf ear to those who would have him extend the furlough scheme into the never, never. Pretending that some areas, such as the high street, haven’t been permanently ravaged is stupid and just creates false hope.

The fact is that Sunak needs to help workers shift to other areas, where growth is predicted or is happening already, because company bosses will have to get real once the scheme ends in October.

Charlie Mullins

Charlie Mullins

Charlie Mullins is the archetypal entrepreneur having started Pimlico Plumbers from scratch and building it into a multi-million pound enterprise. Always opinionated and often controversial, Charlie’s common sense attitude has earned him a reputation as one of the UK’s most outspoken entrepreneurs.

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