Friday 18 September 2020 11:41 am

Around 5m workers were furloughed in July amid uneven recovery

As many as 5.3m people remained on the furlough scheme at the end of the July, although almost a million returned to their jobs on a part-time basis, the latest figures from HMRC showed.

The furlough scheme became flexible in July, meaning businesses could bring employees back part-time. The government paid 80 per cent of the wages for the time they were not working.

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It was one of the steps towards the controversial winding down of the furlough scheme in October. Businesses have been asked to contribute more in August and September.

HMRC said the number of furloughed workers peaked at 8.9m in early May. But it said today that had fallen to 4.8m by the end of July. It added that the figure could be up to 10 per cent higher at the final count, at around 5.3m.

It said about 20 per cent of those furloughed nationally – about 950,000 people – went back to work part-time in July.

The figures are the most up-to-date snapshot of the furlough scheme. They showed that some sectors were much more reliant on the programme than others: 45 per cent of arts, entertainment and recreation employees were furloughed, and 43 per cent in accommodation and food services.

July’s drop in the use of furlough was driven by a sharp reduction in the retail sector. However, the figures did not distinguish between employees returning to work or losing their jobs.

The Resolution Foundation think tank said that, despite the fall, “hard-hit sectors like hospitality and leisure are still hugely reliant on the job retention scheme that is due to end in just six weeks’ time”.

Daniel Tomlinson, senior economist at the Foundation, said some sectors “will need further support after October”.

Chancellor Rishi Sunak heralded the figures, however. He said they “show the success of our furlough scheme – making sure people’s jobs are there for them to return to”.

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“That so many businesses have been able to get back to trading, and bring their staff back to the workplace is a testament to the impact the scheme has had.”

At 29 per cent of employees, the accommodation and food services sector made the most use of flexible furlough. That reflected the gradual reopening of restaurants, pubs and cafes.