Covid: Don't cut furlough cash too early, says Welsh minister

As of Wednesday there were 88,500 jobs in Wales furloughed

Furlough should not be withdrawn before the economy is ready, Wales' Economy Minister Vaughan Gething has warned.

On Thursday UK ministers cut the amount of wages subsidised through the scheme, designed to save jobs in the pandemic.

The UK government will now pay 70% of a furloughed wage, not 80% as previously. From 1 August that will reduce to 60%.

"We will continue to press the UK government to support individuals and businesses as long as is needed," Mr Gething said.

The UK government said the furlough, or Job Retention Scheme, is "in place until September and is amongst the most generous schemes in the world".

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As of Wednesday there were 88,500 jobs in Wales furloughed, which is 46,200 fewer than a month earlier.

The highest level of payments was in June last year when 378,400 jobs in Wales were furloughed.

By November it had dropped to 125,000 but then rose again as the second wave of the virus lead to more restrictions and another lockdown.

In March there were 163,400 jobs furloughed in Wales and since then it has fallen steadily.

Vaughan Gething: "It is clear that the impacts of the pandemic will continue for some time to come"

"We have consistently pressed the UK government to maintain the Coronavirus Job Retention Scheme as business and individuals continue to deal with the effects of the pandemic," Mr Gething said.

"We have been clear and consistent that this scheme, and other interventions, should not be withdrawn before the economy is ready.

"My cabinet colleague, the minister for finance and local government [Rebecca Evans], has called for an urgent meeting with the chancellor to build on the commitments made at the Covid Recovery Summit in order that all four nations work together to support economic recovery."

Mr Gething added that while the development of vaccines had "inspired cause for hope and optimism it is clear that the impacts of the pandemic will continue for some time to come".

Plaid Cymru MP Ben Lake accused the UK Treasury of "rigidly sticking to dates" with regard to financial support "even though uncertainty continues to loom large over the economy".

"Both the Welsh and UK governments are rightly guided by data, not dates, on easing lockdown restrictions due to continuing risks to public health," he said.

"With the continued risk of economic instability as we emerge from the pandemic, it is crucial that the Treasury keeps maximum flexibility to its approach if it is to truly support people and businesses out of this crisis."

What do UK ministers say?

A UK government spokesperson said: "We deliberately went long with our support to provide certainty to people and businesses over the summer, and that support, which is a substantial amount of funding, is continuing.

"The furlough scheme is in place until September and is amongst the most generous schemes in the world - already providing £65bn of support and protecting 11.5 million jobs across the UK.

"The UK government will continue pay 70% of workers' wages over July, with businesses asked to cover just 10%."

Employers across Wales with staff on furlough will be deciding how many of those individuals they will need back into work for the future.

It's about more than whether they can afford paying an extra 10% now.

They know the UK government proportion of wages falls to 60% in a month and ends in September.

Decisions now are about whether they will return to working as they had been before the pandemic.

Furlough has been hugely successful in hibernating the economy from large scale job losses.

What we can't know yet is the extent to which it has softened and delayed the blow of unemployment or whether it has prevented it.