Rishi Sunak's furlough support scheme fails to reassure Britons

Perceived job security at lowest level ever in IHS Markit survey amid coronavirus crisis

Government action to prevent people being laid off during the Covid-19 crisis has failed to reassure people in the UK about their jobs and their financial wellbeing, a survey has reported.

On the day that the chancellor Rishi Sunak’s furloughing scheme to subsidise wages formally opened, the snapshot of household finances from IHS Markit showed the fastest drop in confidence since the survey began during the depths of the last recession in early 2009.

The household finance index, which measures overall perceptions of wellbeing, fell from 42.5 in March to 34.9 in April, while uncertainty about the length of the lockdown meant households were at their most pessimistic in eight and a half years about how they would make ends meet.

The chancellor moved swiftly to announce the government would subsidise 80% of the wages of workers who were furloughed and later broadened its support to include most of the UK’s 5 million self-employed.

But the IHS Markit survey found that perceptions of job security had plunged to their lowest on record. People working in the education, health or social care sectors were the least gloomy, while households employed in media, culture and entertainment were the most worried about their employment prospects.

IHS Markit said one encouraging sign was that there were no signs of household budgets coming under immediate stress because of the lockdown. Debt levels held broadly stable when compared with March, while households dipped into their savings to meet their financial commitments.

Joe Hayes, an economist at IHS Markit, said the deterioration shown in the survey was unsurprising.

“Even with the government’s scheme to backstop earnings, those in receipt of this will still be worse off as support has been pledged for 80% of their full income. Around one in three UK households reported a decline in income from employment during April, which was by far the largest number since the survey began in 2009.

“Limiting the adverse impact on UK household balance sheets will be crucial in the coming months so that when economic activity does recover, consumers are not stuck repaying debts and instead are able to boost discretionary spending to aid a strong recovery.”

Contributor

Larry Elliott Economics editor

The GuardianTramp

Related Content

Article image
What is Rishi Sunak's job support scheme and how will it work?
The replacement for the UK furlough scheme is similar to Germany’s Kurzarbeit

Richard Partington Economics correspondent

24, Sep, 2020 @2:30 PM

Article image
For Rishi Sunak, ending furlough scheme will be harder than starting it
Government support during lockdown has been a big success – but some workers may still lose their jobs in autumn

Larry Elliott

12, May, 2020 @2:02 PM

Article image
Rishi Sunak's winter plan - here's how it will affect you
What the new job support scheme and help for the self-employed means for workers

Hilary Osborne

25, Sep, 2020 @2:09 PM

Article image
Rishi Sunak extends Covid furlough scheme until March 2021
Latest U-turn follows growing pressure for more support to protect jobs and the economy as second wave hits

Richard Partington and Heather Stewart

05, Nov, 2020 @12:25 PM

Article image
Rishi Sunak urged to plug gaps in furlough scheme for 1m self-employed now
Treasury committee says chancellor must fulfil vow to help workers, including newly employed and newly self-employed

Kalyeena Makortoff and Richard Partington

23, Jul, 2020 @7:08 AM

Article image
Rishi Sunak weighs up German-style wage subsidies to replace furlough scheme
Exclusive: option part of wider emergency package to help firms through second wave of Covid-19

Richard Partington Economics correspondent

22, Sep, 2020 @7:48 PM

Article image
Chancellor tells unions there will be no cliff-edge end to furlough
Rishi Sunak promises graudal end to coronavirus wage subsidies as concerns grow

Larry Elliott and Richard Partington

06, May, 2020 @7:05 PM

Article image
Chancellor extends UK furlough scheme until end of October
Rishi Sunak says programme will run for further four months as Britain exits lockdown

Richard Partington and Heather Stewart

12, May, 2020 @6:53 PM

Article image
Rishi Sunak to taper furlough scheme, forcing employers to pay 20% of wages
Labour wants hard-hit industries protected as employers warn of major redundancies

Phillip Inman

28, May, 2020 @7:15 PM

Article image
1.6m Britons still on furlough in July as scheme winds down
HMRC figures show need to continue support for hardest-hit sectors such as aviation, says Unite union

Richard Partington Economics correspondent

09, Sep, 2021 @12:23 PM