What is going to happen in Wales when furlough ends?
Sign up to FREE email alerts from Wales Online - The Coronavirus Briefing - your latest Welsh Covid-19 news Invalid Email Something went wrong, please try again later. Subscribe Thank you for subscribing We have more newsletters Show me See our privacy notice  Furlough has been a lifeline to the hundreds of thousands of people in Wales who have claimed it since the pandemic hit. The UK Government scheme, which applies across the devolved nations, was originally extended to April this year but has since been extended again to the end of September. Furlough applies all across the UK and covers up to 80% of an employee's salary for the hours they can't work, up to a maximum of 2,500 per month. But from July, the UK Government will contribute 70% and employers will have to pay 10% for hours not worked and in August and September the government will pay 60% and employers 20%. Those figures are up to date as of April 30 and mean more than one in ten eligible working people in Wales are still on furlough. The April figures show Conwy was the council area in Wales which had the highest take up rate, at 15%. The constituency with the highest rate of people on furlough is Aberconwy with 18%. The UK government has been discussing extending furlough beyond September 30 of this year. Michael Gove said the UK Government was "open minded" on it continuing. Some say it has to end but others are concerned about what will happen if it does. The Bank of England's top economist Andy Haldane said the UK's recovery was going "gangbusters" but that businesses on pause need to reopen and furloughed or unemployed workers need to get back to jobs to keep up the momentum. We spoke to an economist, a businessman and a politician to see what they thought would happen with the scheme ends. 'There won't be a cliff edge but we need better jobs', Professor Andrew Henley, Cardiff Business School      "I don't think it's going to be quite a cliff edge because I think a lot of businesses have been weaning off. Furlough has been sort of gradually winding out if you look at the data on the proportions and businesses still using Coronavirus Job Retention scheme, they are they are winding out but it still is a big issue in certain sectors, particularly in hospitality, leisure, and particularly in the creative arts area. "I keep reading dire predictions about the number of pubs that could end up closing, it's difficult to know what to make of it. Clearly there are businesses under this stress. Research I'm doing at the moment suggests less established, less innovative, businesses are the ones who are perhaps more at risk and that's not really surprising. "The question is to what extent are they trading normally. They may be open but to what extent are normal trading volumes down. I keep seeing quite a bit of data that suggests that people are still a bit reluctant to go out and shop. "One of the issues is that a lot of people who were on furlough have packed it in and moved into different sectors. Like with hospitality, they're saying we've lost our labour force so we got to wait and find it again. So, the traditional minimum wage young hospitality sector workers have found work elsewhere, and may not necessarily come back to those jobs. "If those businesses don't find new staff at the right wage rate for them then they could be the ones that effectively wind the business out because of that, rather than actually being a furlough effect." Prof Henley said it would depend on the nature of the contracts as to whether there was a spike in unemployment when furlough does come to an end. "If you've got the wrong staff on a zero type contract, I suppose you can just turn around and say sorry we've got no more work for you but if you've got staff who were actually furloughed from more formal, regular hours contracts, then those staff have got some employment rights and the business would have to go through a redundancy process and that would involve formal consultation, you know 90 days. Subscribe to the Wales Matters newsletter Wales Matters delivers the best of WalesOnline's coverage of politics, health, education, current affairs and local democracy straight to your inbox. Now more than ever this sort of journalism matters and we want you to be able to access it all in one place with one click. It's completely free and you can unsubscribe at any time. To subscribe, click here, enter your email address and follow the simple instructions. "There might be some increase in Universal Credit claims coming from people who have been furloughed off zero hours contracts but I suspect a lot of those workers were not getting very much off the furlough scheme anyway and may be kind of workers who've actually gone out and found different work." However Prof Henley said it could be high vacancy levels in areas like hospitality will also cushion the blow because "if vacancy levels are going up at the same time that universal credit claimants going up and it suggests that those people are going to find new work again reasonably quickly". But he said Britain will likely be in a different position to other European countries. "Over the last 30 years Britain has moved to much more flexible labour market. Now that has its disadvantages because it results in job insecurity, low paying jobs and low productivity jobs but actually one of the advantages of course is that we've not now seen, and we didn't see it in 2008 when we had the financial crash, we didn't see the massive rise in unemployment that we became used to in the 1980s. "That's partly because of the way in which the labour markets were deregulated and restructured. There are fewer constraints. "It has resulted in Britain having a labour market that looks a bit more like the United States and a bit less like say a continental European economy, which, when you look at past history of economies like some of the big economies in southern Europe, Spain and Italy, where they've had huge problems with unemployment. Britain's more flexible labour market has allowed it to come out of these sorts of crises with a bit less pain. "The downside is, we've got lots of relatively low paid, not very good quality jobs. The big challenge is actually to create good jobs." 'We have created a new lazy group of people,' businessman Stuart Field who runs 27 pubs in Wales and England  Mr Field has just taken the last of his staff off furlough but says the future of any business is dependent on trade. Right now, he said pubs are trading reasonably well due to good weather, and excitement at restrictions being lifted. "At the time it was brought in, it was very good but furlough has probably gone on too long and isn't all it has cracked up to be. "I totally agreed with it being brought in. In my trade, I have been lucky that I haven't lost any staff and they have all come back to work but with furlough we have created a new lazy group of people who won't want to go back to work. "I think we'll have a certain amount of people who won't want to go back to work but it will depend totally on the industry and it's a bit early to say in the hospitality trade because we right now we still don't know which businesses will survive. 'Support still needs to be available,' Luke Fletcher, Plaid Cymru's spokesman on the economy  "It's going to be very dependant on the industry and if you are trading freely. We know that in the hospitality sector in particular they are reliant on people being able to come together and that is happening to some extent, but there are still restrictions. Mr Fletcher said he wanted to see the Job Retention Bonus introduced - something whcih was intended as an incentive to employers to keep furloughed employees after the end of furlough. It was to be a one-off payment of 1,000 to employers in respect of every employee who had been furloughed but remained continuously employed. He expects redundancies to follow when furlough ends without a scheme like that. "I understand it's a difficult position for the Welsh Government because powers over furlough aren't devolved, but the the whole point of Welsh Government is to stop in when Wales needs them to, and we know already that when furlough ends some employers will be unable to keep staff on. "We are already seeing that there are employment tribunal cases popping up where employees are bringing cases for dismissal after furlough was ended. "We know from both UK and Welsh Government that restrictions will be in place for some time to come and I think means support has to reflect that. Businesses were viable before and they will be again but I am being told from those, particularly in the hospitality sector, that they are quite worried that they are worried about the future of their businesses, not just with furlough ending but that definitely isn't helping".