The number of furloughed workers in the UK rose by 700,000 to 4.7 million in January, during the third Covid lockdown, according to official figures showing employees in hospitality, women and young adults were most likely to be away from their jobs.
The figures from HM Revenue and Customs show a sharp increase from 4 million at the end of December, as the toughest measures since the first wave of the pandemic sent Britain’s economy into reverse.
The data comes days before the chancellor, Rishi Sunak, announces plans for the job retention scheme at next week’s budget, amid speculation it will be extended beyond April to reflect the government’s roadmap for exiting lockdown.
With a gradual easing of controls expected from March to late June, business leaders, unions and Labour have warned that failure to extend the scheme would lead to a surge in unemployment within months. The cost of the scheme has risen to £54bn so far.
The latest snapshot indicated the heaviest impact on the jobs market was being felt in the Lake District and north-east London. More than a fifth of the local workforce was furloughed in the local authorities of South Lakeland and Eden, where tourism is key to the local economy.
There were similar rates in the London boroughs of Newham and Haringey, home to workers in hospitality and retail jobs suffering as office staff and tourists largely stay away from central areas.
Across the UK, there were 2.32 million women and 2.18 million men on furlough at the end of January, with the highest take-up rates for those aged 18 to 24. As many as 68% of firms in the accommodation and food services sector were furloughing staff, while arts, entertainment and recreation had the second highest rate at 64%.
Although the figures represent a rise from the November lockdown, when 3.9 million staff were furloughed, they suggest the latest restrictions are having less impact than during the first wave of the pandemic, when 9 million jobs were furloughed.
Charlie McCurdy, a researcher at the Resolution Foundation thinktank, said the scheme was playing a crucial role in preventing unemployment from rising further.
Official figures earlier this week showed the jobless rate increased to 5.1% in the three months to December, representing 1.74 million unemployed.
“But with almost 5 million workers still on furlough in the most recent data, our biggest labour market challenges may be ahead of, rather than behind, us,” McCurdy said.