Monday 27 July 2020 10:46 am

Sadiq Khan calls on government to extend furlough scheme

Save our SMEs

Sadiq Khan has once again called on the government to extend its furlough scheme for struggling sectors ahead of changes this weekend which could lead to a surge in unemployment.

From Saturday employers will have to pay national insurance and pension contributions for furloughed employees. However, for many sectors such as hospitality and leisure, the changes could be a devastating blow given they are still adjusting to the “new normal”.

Read more: How badly will the UK unemployment rate spike when furlough ends?

The hospitality and retail sectors are not yet able to trade at full capacity due to social distancing measures, meaning revenues are significantly reduced for the foreseeable future.

The mayor of London has warned that if the job retention scheme is not extended there could be a huge surge in unemployment.

Economists have already warned job losses are set to spike after furlough concludes in October. Currently the government is paying 80 per cent of over 9m British workers’ wages.

Figures released by HMRC show the number of furloughed employees in the capital rose by 20 per cent, bringing the total to 1.29m. It represents 30 per cent of London’s eligible workforce.

The figures also show that it is the most deprived areas of London that have seen the largest increase in furloughed employees last month. This includes West Ham, Feltham and Heston, and Tottenham.

Khan is also calling on the government to maintain its 80 per cent contributions to the scheme overall, until people are returning to London venues in greater numbers.

Read more: Firms may still be taxed even if they return furlough money

He said: “For sectors such as creative industries and hospitality it is still too early for many businesses to pick up the cost of national insurance and pension contributions – I am deeply concerned this will simply accelerate a surge in unemployment in businesses already struggling to cover their costs.”

Beverley Whitrick, Strategic Director of the Music Venue Trust said: “Protecting grassroots music venues includes protecting the people who operate them; these vital cultural spaces are run by small passionate teams. Until the venues can open fully we need as much support as possible to retain the talent that fuels London’s amazing music venues.”

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