Britain’s lowest-paid workers are most at risk of unemployment when the government’s furlough scheme ends later this year, according to a new study.
They were also three times more likely to have already lost their jobs during the pandemic, after a “rollercoaster” year, researchers at the Resolution Foundation said.
The think tank, which focuses on living standards, said that as of March 2021, more than 21% of the lowest-paid workers had either lost their job or lost hours and had pay cut, or were furloughed, due to the crisis compared with less than 7% of the top earners.
And while many workers are returning from furlough, others will be at risk when the scheme ends in September.
The number of workers on furlough has fallen to its lowest level this year despite at least 3.4 million people still relying on the job protection scheme, according to government statistics published on Thursday.
The reduction was in part driven by the reopening of pubs and restaurants for outdoor dining in April.
More than one million employees left the scheme between March and April, with some of the biggest falls in people under the age of 25, the government said.
The scheme, which pays up to 80% of salaries to those who are unable to work due to lockdown, has given a total of 11.2 million employees cash since the start of the pandemic.
“Big risks still lie ahead. Low-paid workers are most at risk from the expected rise in unemployment later this year, which also risks causing greater job insecurity,” said Nye Cominetti, a senior economist at the Resolution Foundation.
But there is cause for optimism too. Just as low-paid workers have been hardest hit by lockdown restrictions on the sectors they work in, the think-tank said in its report they should also benefit the most from the reopening of the economy from April onwards.
As outdoor dining opened up, rates of furloughing in hospitality fell from 58% at the end of March to 48% at the end of April.
“The government can salute the vital contribution of Britain’s low-paid workers by offering them a new post-pandemic settlement – from better pay via a higher National Living Wage to greater security of working hours, and proper enforcement to tackle labour market abuses,” Ms Cominetti said.
Ratcliffe remains lead bidder despite inconclusive Manchester United board meeting
The Ineos billionaire Sir Jim Ratcliffe remains the leading candidate to buy Manchester United Football Club despite an inconclusive board meeting held late last week.
Sky News understands that directors of the Premier League club’s holding company met on Thursday to discuss the progress of its £5bn-plus auction.
Controlled by members of the Glazer family but also comprising a number of independent directors, the board was updated on the sale process by Raine, the merchant bank advising Manchester United.
A source close to the auction said the directors did not opt to enter into exclusive negotiations with either Ineos Sports or its principal rival, the Qatari businessman Sheikh Jassim bin Hamad al Thani.
Sir Jim is proposing to buy a majority stake in the Red Devils which would leave two of the Glazers involved, while Sheikh Jassim wants to buy the club outright.
The source said that Ineos remained the “leading” bidder despite a further, improved offer from the Nine Two Foundation – Sheikh Jassim’s bid vehicle – earlier this month.
Nevertheless, a further proposal remains possible, with a signed deal with either bidder said to be unlikely prior to United’s FA Cup Final against local rivals Manchester City next weekend.
Sir Jim’s takeover proposal includes ‘put and call’ arrangements that would allow him to buy the Glazers’ remaining shares after three years.
Ineos’s bid is said to value the whole of United at somewhere between £5bn and £5.5bn.
The Glazers have owned Manchester United since buying it for just under £800m in 2005 – an 18-year tenure marked by protests and a conspicuous dearth of trophies since the retirement of Sir Alex Ferguson, its former manager.
The Red Devils did win their first trophy for six years by beating Newcastle United in this season’s Carabao Cup Final.
In addition to the two proposals which would trigger a change of control, the Glazers have also received at least four credible offers for minority stakes or financing investment in the club.
These include an offer from the giant American financial investor Carlyle, Elliott Management, the American hedge fund which until recently owned AC Milan, and Sixth Street, which recently bought a 25% stake in the long-term La Liga broadcasting rights to FC Barcelona.
These investors’ proposals would provide capital to allow United to revamp the ageing infrastructure of its Old Trafford home and Carrington training ground.
Sky News exclusively revealed last November the Glazer family’s plan to explore a strategic review of the club its members have controlled since 2005, kicking off a six-month battle to buy it.
At a valuation of £5bn or more – which is below the Glazers’ rumoured asking price – a sale of Manchester United would become the biggest sports club deal in history.
Part of the justification for such a valuation resides in potential future control of the club’s lucrative broadcast rights, according to bankers, alongside a belief that arguably the world’s most famous sports brand can be commercially exploited more effectively.
United’s New York-listed shares have gyrated wildly during the process amid mixed views about whether a sale of the club is likely.
On Friday, they closed down at $18.97, giving the club a market valuation of just under $3.1bn.
Fury at its participation in the ill-fated European Super League crystallised supporters’ desire for new owners to replace the Glazers, although any sale to state-affiliated Middle Eastern investors would – like Newcastle United’s Saudi-led takeover – not be without controversy.
Confirming the launch of the strategic review in November, Avram and Joel Glazer said: “The strength of Manchester United rests on the passion and loyalty of our global community of 1.1bn fans and followers.
“We will evaluate all options to ensure that we best serve our fans and that Manchester United maximizes the significant growth opportunities available to the club today and in the future.”
The Glazers listed a minority stake in the company in New York in 2012 but retained overwhelming control through a dual-class share structure which means they hold almost all voting rights.
A Manchester United spokesman declined to confirm that a board meeting had taken place.
Wealth manager St James’s Place kicks off hunt for new chief
The executive who presided over a bitter “cruises and cufflinks” row at one of Britain’s biggest wealth managers is preparing to step down.
Sky News has learnt that St James’s Place, the FTSE-100 group which oversees more than £150bn of client assets, has kicked off a search to replace Andrew Croft.
City sources said on Saturday that the company was working with Russell Reynolds Associates, the headhunter, on the search.
Mr Croft has worked for St James’s Place since 1993, and served as its finance chief between 2004 and 2017.
He took over as chief executive in 2018.
A source close to the company said there was “no rush” to find a new CEO, and hinted that a transition to a successor could take more than a year.
St James’s Place caters to affluent clients, with thousands of financial advisers known as partners at the firm managing £153bn in assets.
The company has faced questions about its recent performance, with Mr Croft describing recent quarterly net inflows as a “good” outcome but many analysts taking a different view.
It warned this year that it would miss a key expenses growth target.
In 2019, St James’s Place became embroiled in a row about partners’ pay and perks, with benefits including cruise holidays and jewellery awarded to high-performing partners.
The regime was scrapped following a review aimed at encouraging “the right behaviours” amid concerns that partners were effectively being incentivised to mis-sell to customers.
News of the prospective change in leadership at St James’s Place comes ahead of the introduction of a new consumer duty supervised by the Financial Conduct Authority.
Paul Manduca, the City grandee who chairs St James’s Place and previously led Prudential, will oversee the hunt for Mr Croft’s successor.
The company suffered a revolt this month at its annual meeting when more than 20% of shareholders voted against its remuneration report.
Mr Croft was paid a total package for last year of just over £3m, with some investors irritated that he received long-term awards linked to its depressed share price during the pandemic.
Partners at St James’s Place, which is based in Cirencester, are self-employed.
A St James’s Place spokesman said this weekend: “As part of long-term succession planning, the Board has regular dialogue with search firms to assess and monitor the market.
“This is in line with best practice corporate governance.”
Shares in St James’s Place closed on Friday up 7.5p at 1112.5p, giving the company a market value of £6.1bn.
The stock has slipped 11% during the last 12 months.
Chancellor comfortable with recession if it brings down inflation
Jeremy Hunt has told Sky News he is comfortable with Britain being plunged into recession if that’s what it takes to bring down inflation.
The chancellor said that he would fully support the Bank of England raising interest rates higher, potentially towards 5.5%, as it battled higher-than-expected prices.
Asked by Sky News whether he was “comfortable with the Bank of England doing whatever it takes to bring down inflation, even if that potentially would precipitate a recession”, he said: “Yes, because in the end, inflation is a source of instability.
“And if we want to have prosperity, to grow the economy, to reduce the risk of recession, we have to support the Bank of England in the difficult decisions that they take.
“I have to do something else, which is to make sure the decisions that I take as chancellor, very difficult decisions, to balance the books so that the markets, the world can see that Britain is a country that pays its way – all these things mean that monetary policy at the Bank of England (and) fiscal policy by the chancellor are aligned.”
The comments came after market expectations for the eventual peak of UK interest rates leapt dramatically, following higher-than-expected CPI inflation data this week.
While the anticipated peak for UK rates was a little above 4.75% last week, it lurched higher, to 5.5%, following Wednesday’s statistics. Save for the gyrations after the mini-budget last autumn, it was the biggest shift in interest rate expectations since 2008.
Prime Minister Rishi Sunak pledged in January that he would halve inflation this year, which in practice means bringing it down to just above 5% by the end of 2023. The Bank of England’s forecasts earlier this week suggested he would narrowly succeed.
Grocery inflation eases for second consecutive month
Government borrowing sharply higher than expected
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However, since the latest inflation data is significantly higher than the Bank’s forecast trajectory, the pledge may be missed.
But the prime minister also pledged to grow the economy. And while the International Monetary Fund said this week that the UK would avoid recession, economists believe it’s now plausible, given those higher interest rate expectations, that Britain instead sees gross domestic product contract for two quarters – the technical definition of a recession.
Mr Hunt added: “When the prime minister announced that it was his objective to halve inflation in January, there were some people who derided that, they said: ‘well it’s automatic, inflation is going to come down anyhow’.
“There’s nothing automatic about bringing down inflation, it is a big task, but we must deliver it and we will.
“It is not a trade-off between tackling inflation and recession. In the end, the only path to sustainable growth is to bring down inflation.”
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