Retail workers went back to work in July, but over two in five hospitality and leisure workers still furloughed

The number of furloughed workers has almost halved from its early May peak of 8.9 million to 4.8 million in late July, but hard-hit sectors like hospitality and leisure are still hugely reliant on the Job Retention Scheme (JRS) that is due to end in just six weeks’ time, the Resolution Foundation said today (Friday) in the response to the latest HMRC data.

The data shows that 4.8 million workers were furloughed on 31 July – the eve of employer contributions commencing – including 3.5 million workers who were fully furloughed and 950,000 who returned to work part-time. This represents a drop of almost half since it’s early May peak, and of one-third since the end of June.

The fall in furloughing in July was driven by retail workers returning to work. The proportion of retail workers on furlough fell by 40 per cent during the month (from 29 per cent of workers to 17 per cent). However, the data does not distinguish between employees returning to work or losing their jobs altogether.

Despite this fast fall in retail, over one in ten private sector employees remained fully furloughed, rising to over two in five in hard-hit sectors like hospitality and leisure.

The Foundation estimates from more recent survey data that around three million workers remained furloughed at the end of August, highlighting the very real risk of a huge post-furloughing unemployment rise.

The Foundation says that the latest data again reiterates the highly sectoral nature of Britain’s jobs crisis, and the need to replace the furlough scheme with new support for the firms and workers most affected by this crisis.

It adds that the 950,000 workers on flexible furlough in July offers an insight into what post-JRS job support could look like, and is an approach that is already commonplace in Germany.

Daniel Tomlinson, Senior Economist at the Resolution Foundation, said:

“The number of furloughed workers continued to fall in July as retail staff went back to work and the UK’s retail recovery continued.

“However, even by the end of July, when all easing measures had been introduced, furloughing was still commonplace, with over one in ten private employees not working.

“Firms in hard-hit sectors like hospitality and leisure, many of whom still aren’t able to operate at close to full capacity due to social distancing restrictions, are still very reliant on furloughing and will need further support after October.”