A UK Government minister has said that job losses will be "part of the process" of the furlough scheme ending as the SNP have called for the Tories to extend the scheme amid a "jobs cliff-edge" looming.
The job support scheme is coming to an end after supporting millions of people in the UK who have been unable to work throughout the coronavirus pandemic.
It comes as economists have warned that the rate of unemployment is expected to increase as there are doubts as to whether all staff who remained on furlough will be re-employed.
Chief Secretary to the Treasury Simon Clarke told Sky News: “Obviously there will be a variety of outcomes, I don’t have an estimate with me today. There will be some job losses.”
READ MORE: UK Government urged to make last-minute U-turn as furlough scheme ends
Clarke added: “Furlough has protected 11.6 million jobs in total … at some point you have to end these emergency measures.
“People’s jobs will be created just as some have very sadly been lost, that is part of the process of ending this crisis and going back to normal.”
The minister also claimed: “We never said we could protect every job … I think we need to be totally honest about this, the Covid pandemic has taken a toll on our economy, it’s changed some things,” he said.
“My message to people would be there are these opportunities there.”
The SNP have called on the UK to extend the scheme due to many businesses being pushed into hardship during the pandemic.
The removal coincides with welfare cuts coming into force, a rise in energy prices, and an increase to National Insurance.
The SNP’s shadow chancellor Alison Thewliss MP (below) said: “With the threat of a jobs cliff-edge looming in just a matter of hours due to the Tory government’s reckless plans to cut Covid financial support, it’s clear that independence is the only route to protect jobs and businesses.
“Whilst the pandemic is still ongoing, the UK Government should be looking to strengthen financial support – not prematurely pull it at a time when welfare cuts are coming into force, our energy prices are rising, our tourism and aviation sector is not yet back to normal, and those on the lowest incomes are being hit with a National Insurance hike.
“The SNP are now demanding that the Prime Minister and Chancellor heed the warnings and U-turn on their plans to end the furlough scheme – otherwise we risk thousands of unnecessary redundancies."
Uncertainty remains for the future of almost one million workers who were expected to be still receiving support through the financial scheme at the end of September, according to the latest Office for National Statistics (ONS) estimates.
Economists have warned that although many may find work in recovering sectors such as hospitality and travel, there is also likely to be a rise in unemployment due to new redundancies.
Alan Custis, head of UK equities at Lazard Asset Management, said the rate of unemployment, which dropped to 4.6% last month, is likely to swing higher again.
“There will also be a percentage who choose retirement over returning to work, but we would expect the unemployment rate to settle at around 5% for the year-end, before falling in 2022,” he said.
READ MORE: Virgin Money to close 12 Scottish branches as use declines in pandemic
Custis added that other countries, such as the US and Australia, saw unemployment spikes when similar financial support for workers came to an end.
The end of furlough also comes amid record UK vacancy figures, with the latest ONS data for August reporting more than one million available jobs for the first time on record.
There have also been significant hiring sprees amid labour shortages for HGV drivers, warehouse staff and food production workers.
Nevertheless, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said he has “doubts” as to whether broader consumer demand will have jumped enough by October to re-employ all staff who remained on furlough.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here