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Economy

700,000 jobs at risk as end of furlough scheme draws near

Over 700,000 employees are at risk of being made redundant in the second half of 2020, research from Institute for Employment Studies (IES) has revealed.

IES estimates that some 650 thousand redundancies are expected in the second half of 2020, with 445 thousand redundancies in the three months between July and September and a further 205 thousand redundancies between October and December.

However, this figure could top 700,000, driven by a larger proportional increase in actual redundancies relative to redundancy notifications, or if those notifications do not fall as sharply in August/ September as IES has forecast in its ‘central scenario’.

Labour Force Survey data show that 240 thousand people reported having been made redundant in the first six months of the year.

Looking forward, IES said in the medium and longer term, investment in infrastructure and job creation should support more and better jobs.

However, it noted in the shorter term more support is needed to boost labour demand – for increased hiring number and potentially to reduce the scale of job losses. IES added: “We would recommend doing this through a targeted reduction in employer National Insurance Contributions (NICs).

“These are the single largest non-wage labour cost that employers pay, adding around £2,400 to the cost of employing someone on an average wage. Reducing non-wage labour costs will have a short-term positive impact on labour demand and can be brought on-stream immediately.”

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