The furlough scheme extension is not a good idea, according to a top economist from the Bank of England, Andrew Haldane. He has argued that it will delay an “inevitable” shake-out of businesses hit by the Covid-19 pandemic.
On the flipside, business leaders, trade union bosses, and opposition politicians all are of the feeling that the UK could suffer a wave of redundancies. This would become more evident in the run-up to Christmas. Apparently, there are 2.3 million workers still on furlough. Cancellation of the scheme would hurt the jobs of that many Britons.
The furlough scheme has supported more than 9 million workers since March when the lockdown was put into place. It was considered one of the best schemes put into place to support the employed in the UK. No wonder it has been praised by business leaders.
The recent discussions from the industries continue to urge that the scheme is promising safety especially for the leisure and hospitality sectors as well as hard-pressed manufacturing industries such as aerospace.
Haldane believes that chancellor Rishi Saunak should look forward to supporting government progress that extending the furlough scheme. According to him, the necessary adjustment means that people are learning to adapt to the coronavirus situation. Work from home is happening and both workers and companies are emerging resilient. Instead of extending the furlough scheme, is going to do disserving to this kind of adjustment the UK economy is going through.
“Our job as policymakers is to assess how we can best cushion the necessary adjustment. We need to recognize we are undergoing a period of change and there is a need to help those people affected adjust quickly,” he added while speaking to the media.
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