January lockdown saw 700,000 more workers furloughed

August Graham, PA City Reporter
·3 min read

The number of people on furlough ballooned by around 700,000 in January as harsher lockdown restrictions were imposed at the beginning of the month.

Around 4.7 million people were furloughed on January 31, up from four million a month earlier, the Treasury revealed on Thursday.

It means 16% of eligible workers were furloughed at the end of January.

In total, 11.2 million employees across the UK have been given cash under the scheme, which pays up to 80% of salaries to those who cannot work because of Covid-19 restrictions.

As of February 15, a total of £53.8 billion had been claimed since the furlough scheme began last year.

The data shows lockdown has hit the accommodation and food services sector worst, as it furloughed 1.15 million people, with 68% of employers tapping into the scheme – an increase of three percentage points since December 31.

The wholesale and retail sector, which had furloughed nearly 1.9 million in April, only had 938,500 employees on furlough on January 31.

Charlie McCurdy, researcher at the Resolution Foundation, said: “Today’s HMRC data shows that the Job Retention Scheme again took the strain during the latest lockdown with an increase of almost a million people on the scheme during January.

“Furlough has once again played a crucial role in protecting incomes and keeping a lid on rising unemployment. But with almost five million workers still on furlough in the most recent data, our biggest labour market challenges may be ahead of, rather than behind, us. “

Separately, Treasury figures show businesses took out a further £2.2 billion of Government-backed loans in the last month.

The coronavirus business interruption loan scheme (CBILS) was most popular, with a further £1.2 billion lent.

It means that in total, nearly £73 billion has been lent under the scheme and its two sister schemes – the coronavirus large business interruption loan scheme and the bounce back loan scheme.

The loans are offered on different terms, but the money is provided by normal lenders who receive a guarantee from the Government that if a business cannot repay the banks can claim all or part of the loan from the Treasury.

More than 1.5 million businesses have taken bounce back loans, with the first repayments due in May.

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Businesses have been given the option to take an interest and repayment holiday for six months if they do not feel able to pay. They can also take three six-month periods of only paying interest and extend the repayment period from six to 10 years.

The furlough figures show that while 1.5 million workers using the scheme are employed by big companies, it is staff at small firms with between two and four employees who are most likely to be furloughed.

These companies filed claims for more than 620,000 staff, or 36% of those eligible to be furloughed. Among larger businesses with more than 250 employees, only 9% of eligible staff were furloughed – the lowest proportion.

On average, women are more likely than men to be furloughed, however in London and Northern Ireland the furlough rate among eligible male employees is higher than among women.

By local authority, South Lakeland in Cumbria had the highest take-up rate in the country at the end of January, at 26%. The lowest rates were found in Boston, Lincolnshire, and in Orkney and Shetland, at 9%.