BBC News - Bank of England boss calls for furlough 'rethink'

 

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The governor of the Bank of England has called for the government to "stop and rethink" the furlough scheme.

The Job Retention Scheme is due to finish at the end of next month.

But speaking on a webinar hosted by the British Chambers of Commerce, Andrew Bailey suggested some sectors may benefit from further targeted help.

In August, Mr Bailey told the BBC he backed ending the current scheme, saying workers should be helped to move rather than stay in unproductive jobs.

However, on Tuesday, he suggested that did not preclude offering different types of support in its place.

He said the furlough scheme "has been successful" and said that he supported the chancellor's decisions, not wanting to "tie his hands".

But he added: "We have moved from a world of generalised employment protections, to specific and focussed areas."

Mr Bailey noted that at the peak of the crisis, around 30% of private sector employers were using the scheme, but as that decreased it had exposed the areas of the economy suffering most.

"[Furlough] has helped manage the shock, to firms and to labour [but now] the use of it, as far as we can tell, is more concentrated," he said.

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Earlier in the day, Whitbread, which owns Premier Inn and Beefeater, announced plans to cut 6,000 staff just days after the furlough scheme is due to end in October. Meanwhile Wetherspoon said it would shed up to 450 workers at pubs in airports.

And Mr Bailey's comments were made just hours before the Prime Minister Boris Johnson took to his feet in the Commons to reinstate guidance that office workers stay at home and confirm that pubs and restaurants will be forced to close at 22:00 from Thursday. UK Hospitality said the move was "effectively a lockdown" for city centre bars and restaurants.

"This is a huge, huge blow to hospitality and it will be potentially fatal for many businesses," it said.

Mr Bailey's comments echo the opinion of Labour leader Sir Keir Starmer, who has called on the government not to remove all support in one go.