Rise in redundancies caused by Covid-19 ‘tip of iceberg’

The warning by campaigners comes as latest official figures show the number of out of work benefit claimants more than doubled in Scotland between March and August, with Edinburgh, Aberdeen and Highlands and Islands the worst affected areas.

The furlough scheme which provided a financial lifeline to workers and businesses during lockdown was last night extended for a month as England went into a second lockdown.

It had been due to be replaced today by the less generous job support scheme, under which staff are required to work 20% of their usual hours to qualify for payments.

Economists have long warned the end of furlough would bring rising unemployment, and fears have ­increased as it was ceasing just as ­another wave of Covid-19 hits.

Last night First Minister Nicola Sturgeon said the Scottish Government expected to have discussions in the coming days about the scope of additional financial support being made available.

She said: “A crucial point for us is whether support on the scale ­announced for English businesses is available now or if we needed to ­impose further restrictions later or if it is only available if Scotland has a full lockdown at the same time as ­England.”

Pravin Jeyaraj, of campaign group Zero Hours Justice, warned job losses reflected in official redundancy figures are the “tip of the iceberg”, with workers on other types of contract having their hours reduced or cut completely.

He said: “Because of the nature of zero hours contracts, or similar ­arrangements such as casual workers or bank workers, it is not difficult for employers to simply not offer work without having to go through the process of making staff redundant.

“Of course, a lot of businesses will be hoping to call their staff back to work soon, but the current situation is unpredictable. It does not help many zero hours contract workers, casual workers and bank workers, who are on a low wage or the minimum wage.”

Jeyaraj said the job support scheme would only go so far and in many ­cases workers would not even be able to work the minimum number of hours required.

He added: “It also depends on employers being able to find the money to pay wages and then claim them back later.

“It is a lot easier simply to not ­offer work. The only real source of support for zero hours contract workers is Universal Credit, but why should they be put in the position where they are forced to claim benefits?”

The latest Office for National Statistics figures show in September there were 224,184 people in Scotland claiming Jobseeker’s Allowance or Universal Credit principally for the reason of being unemployed,­ ­compared to 111,440 in March.

The highest rise was in Edinburgh and the Lothians at 141%, followed by Aberdeen City and Aberdeenshire at 128% and Highlands and Islands at 104%.

Tony Wilson, director of the Institute for Employment Studies, said the number of redundancy notifications being lodged by employers was running at more than double the levels in the last recession of 2008. But he also pointed out these job losses reflected only part of the picture.

“We have spoken to a lot of people in our research who have had their temporary contracts ended, who have had their hours reduced, who were on zero hour contracts and are now getting zero hours,” he said.

He said there would also be an impact relating to the lack of jobs being created due to uncertainty caused by the crisis and over Brexit.

“In a recession, you tend to get job losses concentrated over a relatively short period of time, but also people who are in jobs tend to stop moving jobs and hunker down,” he said.

“But then the impact of that is really felt over a longer period and if hiring doesn’t recover strongly then that starts to feature into higher long-term employment.

“I think what people are most worried about at the moment is really subdued hiring.

“You see that in Scotland, some of the areas that have suffered the most have been ex-industrial areas including the Central Belt, but also places like Aberdeen.”

Fiona Stewart is one of the many in Scotland who has been affected by the employment crisis. She was

furloughed from her job when lockdown hit in March and then made redundant in June.

She is hoping to soon take up a part-time job as a support worker in a nursery.

The 51-year-old, from Renfrew, said: “Since July I have been looking for other work. It has not been the easiest.

“A lot of the employment agencies over the past few years would always have admin jobs going. This time I have heard virtually nothing. More and more people are chasing fewer and fewer jobs.

“This is the first time in my life I have had to claim benefits. I would prefer to be working full-time. Hopefully there will be leeway for getting more hours.”