Rise in workers on furlough could suggest ‘lack of confidence’ in economy

Shoppers are returning to Ipswich's town centre - but not in the numbers seen before the lockdown.

Shoppers are returning to Ipswich's town centre - but not in the numbers seen before the lockdown. Picture: SARAH LUCY BROWN - Credit: Archant

The number of workers on furlough across Suffolk has rocketed this month as 11,600 more people are registered for the government scheme during than last month.

In June there were a total of 85,700 people registered on the Job Retention Scheme (JRS) in Suffolk, but that number has risen to 97,300 in July.

The government scheme pays 80% of worker’s wages up to £2,500 and will be phased out from September before coming to an end in October.

On average, 30% of the 332,800 workers in the county are on furlough with Bury St Edmunds and Waveney seeing the biggest monthly increases of 8% respectively.

In Ipswich there are now 15,200 people on furlough, 15,800 in Bury St Edmunds and 12,800 in Central Suffolk and North Ipswich.

In South Suffolk and Suffolk Coastal there are 12,300 workers on the scheme in each constituency, 15,900 in West Suffolk and 13,900 in Waveney.

Ipswich has seen the lowest increase over the month with just a 2% rise.

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James Lay, business advisor and partner at Larking Gowen, said he is surprised by the rise in claims as there is just ‘no logic’ to the numbers.

“These figures ought not to be new people as the cut off for the scheme was some weeks ago in June,” he explained.

“I would have expected as bars and retailers reopened there would be a fall in furlough numbers as more staff are employed but perhaps it is businesses who want to make use of the scheme before October when the charges will occur.

“It shows there is perhaps a lack of confidence in the economy.”

Chris Starkie, chief executive of New Anglia Local Enterprise Partnership, said he was not surprised by the latest figures.

Mr Starkie said: “Not every company chose to furlough staff straight away, but as trading conditions have become difficult more will have opted to take advantage of the scheme.

“While we have seen a number of redundancies announced in the past few weeks, consultation periods mean we may not see the impact of further job losses until later this summer or even the autumn.

“Following the reopening of the High Street in early July and the wider easing of lockdown, we would expect to see number of people on furlough reduce over the coming months. Also, although the furlough scheme continues until the autumn, firms will have to make a contribution towards workers’ wages, making it less attractive.”