'Worse to come' as Shropshire business leader warns of unemployment rise when furlough scheme ends

Richard Sheehan, chief executive of Shropshire Chamber of Commerce, fears the true picture surrounding unemployment will come to light after the Government's furlough scheme winds down.

It comes as new figures show the number of people out of work in the West Midlands – including Shropshire – rose by 1,000 in the three months to the end of May.

Mr Sheehan said: "I fear we maybe fending off the inevitable.

"Our research shows there are businesses considering a restructure and redundancies, and there will be a knock-on effect of this.

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"With the furlough scheme coming towards the end, I don't think we have started to see the peak of the number of people out of work.

"The Government has to maintain its focus on keeping people in work and acknowledge the significant number looking to get into work in a market that has shrunk."

But he added: "However, there are a number of growth sectors which will represent new opportunities for employment."

'Awful consequences'

Meanwhile, senior Labour MP and Shadow City Minister Pat McFadden has warned the West Midlands has been left facing a "full blown jobs crisis" as a result of the pandemic.

He said the rise in the number of people claiming benefits in recent months showed that urgent action was required to avoid the "awful consequences of mass unemployment".

He agrees the the situation is likely to get worse once the Government's furlough scheme starts to wind down in the coming weeks, and suggested bringing in targeted support for sectors of the economy hardest hit by lockdown measures.

Mr McFadden said: "These figures show that what began as a public health crisis is now a full blown jobs crisis – and that is before the furlough scheme begins to unwind from August 1.

"The danger is that as employers have to contribute more to the furlough scheme they begin to let more people go.

"That is an argument for targeted sectoral support aimed at those businesses based on face-to-face contact and bringing people together which have been particularly hard hit by the social distancing measures necessitated by the Covid crisis.

"We know from the past the huge economic and social problems caused by high levels of unemployment. Government has made big interventions in recent months but there is a lot more to do if we want to avoid the awful consequences of mass unemployment that we have seen in the past."