Furlough extension to save thousands of manufacturing jobs

On 12 May Chancellor Rishi Sunak announced that the scheme, which allows furloughed workers to receive 80 per cent of their current salary up to a maximum of £2,500, would be extended by a further four months.

The government says the scheme has protected 7.5 million workers and almost one million businesses to date.

In addition to the extension, from the start of August furloughed workers will be able to return to work part-time under the scheme, with employers asked to pay a percentage towards salaries to substitute the contribution the government is currently making.

Stephen Phipson, Chief Executive of Make UK, said the announcement avoided “a looming cliff edge” of redundancies across the manufacturing industry. According to the Confederation of British Metalforming (CBM), around 12,000 jobs were believed to be at risk in just that sector alone.

A survey of the CBM’s membership base found that members were predicting to cut up to 30 per cent of jobs if the furlough scheme was closed at the end of June as originally planned.

Steve Morley, President of the CBM, said:

“The flexibility from August, where staff who are already furloughed can be brought back on a part-time basis, will be a massive benefit to manufacturers who continue using the scheme. It will give them flexibility and allow them to plan for growth, whilst protecting the investment they have made over many years in training their employees and developing the skills they’ll need when operating in a post-lockdown economy.”

“[The decision] will save many good companies and it will protect employers from being forced into very difficult decisions at a time when they and their employees are worried about their own wellbeing and that of their families.”

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