Fifth of virus-hit firms in UK mull layoffs: survey

LONDON: A fifth of UK private companies want to furlough — temporarily lay off — staff owing to the coronavirus turmoil, the British Chamber of Commerce said Wednesday.

Analysts said that the figure, based on a BCC survey of 1,000 companies, could rise to around 30 percent, costing the government up to ‘£40 billion (45 billion euros, $49 billion) under its jobs retention plan.

“Our latest data shows that many businesses face a cliff-edge scenario, either at the end of this month or over the course of the next quarter,” said BCC Director General Adam Marshall. “We’ve seen a big jump in the number of firms furloughing staff, and many are now starting to apply for access to government loan and grant schemes to keep themselves afloat.”

The jobs plan, designed to prevent mass redundancies in the face of the COVID-19 crisis, sees the state pay 80 percent of the wages of furloughed workers. It goes up to a maximum of ‘£2,500 per month each.

The Coronavirus Jobs Retention Scheme, launched last month by finance minister Rishi Sunak, could cost between ‘£30 billion and £40 billion over the next three months should private companies seeking the state aid rise to 30 percent, according to think-tank Resolution Foundation. “The cost of the scheme depend on firms’ take-up and the length of time workers need to be furloughed for,” said Resolution Foundation Chief Executive Torsten Bell. “The economic and social cost of mass unemployment in the absence of such a scheme would be far, far greater.”