Business
Ditching Furlough Scheme Will Add To UK’s Economic Woes
Ditching furlough scheme will add to UK’s economic woes, warn unions and firms
Rishi Sunak’s decision to wind up the furlough scheme today will intensify Britain’s economic woes, an array of unions, business groups, employment experts, City firms and politicians have warned.
With signs of activity slowing even before pressures on supply chains began to mount over the past few weeks, the chancellor was criticised for cutting off a wage-subsidy lifeline that is still supporting well over a million jobs.
Frances O’Grady, the TUC general secretary, said the end of the furlough scheme coupled with the £20 a week cut in universal credit next week meant the government was heading into the winter with no plan to protect workers.
“Ministers should rethink the end of furlough. Many workers in hard hit industries are still furloughed and need support for longer. Otherwise, we may see a rise in unemployment,” O’Grady said.
Business leaders warned of an “autumn storm” from the government dismantling emergency pandemic support schemes at a time when the economic recovery from Covid-19 was faltering.
The coronavirus Job Retention Scheme was launched by Sunak on 20 March last year, after consultation with unions and bosses, covering 80% of a furloughed employee’s wages, up to £2,500 a month.
The Federation of Small Businesses (FSB) said the end of the furlough scheme, the scrapping of the small employer sick pay rebate, and the closure of the government’s apprenticeship incentive scheme would add to pressure on companies.
Mike Cherry, the FSB’s national chair, said: “It’s potentially a dangerous moment. As the weather turns colder, so too will the operating environment for many firms. With recent economic growth numbers having fallen below expectations, the upcoming festive season may not provide as much of a boost as hoped to many small businesses’ bottom lines.”
The government has spent around £70bn to support the wages of more than 11.6m jobs over the past 18 months, and Sunak is hopeful that a record stock of more than a million job vacancies will absorb workers coming off furlough.
However, employment experts warned this was unlikely because of mismatches between vacancies and where most workers were furloughed. One of the UK’s biggest recruitment firms said the end of furlough was unlikely to help firms address chronic staff shortages in some sectors of the economy.
Niki Turner-Harding, senior vice-president of Adecco UK & Ireland, said: “The end of the furlough scheme won’t turn the tables when it comes to the candidate-led environment that jobseekers are experiencing right now. Not least because those employees still furloughed work in industries most affected by the current situation, such as the travel industry.”
As many as 1.6 million workers remained on furlough at the end of July according to the latest official figures from HMRC, representing about 5% of the overall workforce. However, large numbers of workers in sectors of the economy hardest-hit by Covid-19 are still receiving emergency wage support from the state, with fears the end of the scheme will drive up unemployment.
Usage of the scheme peaked at almost 9 million in May 2020 during the first wave of the pandemic, and at about 5.1 million during the winter lockdown earlier this year. However, the rate of workers returning to their jobs has slowed steadily in recent months despite the reopening of the economy, as certain sectors remain under intense pressure.
More than half (51%) of all air passenger transport workers in Britain were still on furlough at the end of July, the highest of any industry. More than a quarter of travel agents and tour operators are in the same position, in a stark contrast to the 5% average for all sectors.
Christine Jardine, Treasury spokesperson for the Liberal Democrats, warned Thursday’s sudden stop could trigger an economic crisis akin to Black Wednesday in 1992 when Britain crashed out of the European Exchange Rate Mechanism. Jardine said Sunak risked a “coronavirus Black Thursday” unless he prolonged the furlough to the 10 most affected sectors.
The chancellor insisted now was the right time to close the scheme and encouraged companies to make use of other government support measures, including the super-deduction tax break and kickstart job creation scheme.
“I am immensely proud of the furlough scheme, and even more proud of UK workers and businesses whose resolve has seen us through an immensely difficult time. With the recovery well under way, and more than 1 million job vacancies, now is the right time for the scheme to draw to a close,” he said.
Susannah Streeter, senior investment and markets analyst at the wealth management firm, Hargreaves Lansdown, said: “Any hope that the end of the furlough scheme might be the magic wand to solve the supply chain crisis is likely to be wishful thinking.”
Business
FCCPC Tasks DisCos on Band Migration, Metering
•…Orders Ikeja, Eko DisCos to halt Unistar Meter Installation
The Federal Competition and Consumer Protection Commission (FCCPC) on Tuesday urged electric distribution companies (DISCOs) to carry energy consumers along before classifying them into bands and also adhere strictly to industry regulations on billing unmetered consumers.
The call was made by FCCPC’s Executive Vice Chairman and Chief Executive Officer, Mr. Tunji Bello, at a stakeholders’ meeting held at the FCCPC headquarters in Abuja which was attended by representatives from the Nigerian Electricity Regulatory Commission (NERC), the Nigerian Electricity Management Services Agency (NEMSA), various electricity distribution companies (DISCOs) and Unistar Hitech Systems Limited to address pressing metering issues impacting Nigerian consumers.
Citing noncompliance with NERC’s order, FCCPC directed Ikeja Electricity Distribution Company (IKEDC) and Eko Electricity Distribution Company (EKEDP) to immediately halt their replacement of Unistar prepaid meters.
During the meeting, Mr. Bello highlighted significant issues facing electricity consumers, from billing inaccuracies to inadequate customer care. Mr. Bello noted that systemic inefficiencies and a culture of impunity among some service providers have intensified these issues, leading to the routine exploitation of consumers. He expressed concern over practices that require consumers to pay upfront for meters without reimbursement, a direct violation of the NERC Meter Asset Provider and National Mass Metering Regulations 2021. He also noted that DisCos frequently place consumers with faulty meters on estimated billing, which is prohibited under NERC’s regulations.
Mr. Bello cited an example of a complaint received by FCCPC from an Ikeja Electric customer, who had expressed frustration at being asked to replace a functioning meter at a significant personal cost.
To prevent potential exploitation, FCCPC has directed that all meter replacement processes be conducted transparently, with costs borne by the DisCos and not passed on to consumers. Mr. Bello stressed that FCCPC will enforce strict compliance with these regulatory requirements to protect consumers from arbitrary charges and estimated billing.
The FCCPC also committed to enhancing consumer education on metering and billing practices to guard against potential exploitation by service providers. Mr. Bello concluded by expressing appreciation for the collaborative efforts of NERC and NEMSA in building a transparent, accountable, and consumer-centered electricity sector. He reaffirmed FCCPC’s dedication to enforcing all relevant consumer protection laws within the electricity industry to uphold consumer rights and promote fair market practices.
The FCCPC’s directive to discontinue the replacement process stems from the DisCos’ non-compliance with NERC’s “Order on Structured Replacement of Faulty and Obsolete End-user Customer Meters in the Nigerian Electricity Supply Industry.” Both NERC and NEMSA endorsed the FCCPC’s stance on the issue.
The NERC’s Order mandates that DisCos must prioritise metering for unmetered customers under the National Mass Metering Programme (NMMP) and follow strict guidelines for replacing faulty or obsolete meters. These guidelines require DisCos to inspect faulty meters and provide detailed information in the replacement notice, including the inspection date, the inspecting officer’s credentials, the identified fault, and the scheduled replacement date. Furthermore, DisCos are prohibited from placing customers on estimated billing due to delays in meter replacement, as new meters must be installed immediately upon removing any faulty or obsolete unit.
The meeting addressed a recent announcement by one of the DisCos regarding the phase-out of the Unistar prepaid meter model, effective November 14, 2024, which has caused considerable anxiety among consumers.
Business
NNPCL dismisses demand for Kyari’s resignation over fuel price hike
The Nigerian National Petroleum Company Limited (NNPCL) has stated that its Group Chief Executive Officer (GCEO), Mallam Mele Kyari, is not responsible for the hike in the prices of the Premium Motor Spirit (PMS) popularly known as petrol.
Recall that some protesters had earlier stormed the headquarters of the oil company in Abuja, with the demand that Kyari be forced to resign over the increase in the prices of petrol nationwide.
Reacting to the development, spokesman for the NNPCL, Olufemi Soneye, said that the protesters were not well informed about the true state of things in Nigeria’s fuel supply chain.
Soneye, in his reaction said, “Unfortunately, the protesters lack understanding of the sector. If they were informed, they would know that the GCEO is not responsible for the fuel price increase; in fact, he ensured Nigerians had access to fuel at N620 per liter for over a year, even when the landing cost was above N1,100. NNPC Ltd. does not import adulterated fuel. If anyone has evidence to the contrary, they should bring forward samples of any such fuel imported by NNPC.”
He affirmed further that no group or individuals motivated by selfish interests would deter or distract the NNPCL from achieving the goal of implementing President Bola Ahmed Tinubu’s roadmap for the sector to accomplish its goal and to ensure energy security for the nation.
“I won’t waste time engaging with individuals motivated by selfish interests. We have more pressing projects to accomplish to ensure energy security for our nation rather than focusing on inconsequential groups. We are committed to implementing President Bola Ahmed Tinubu’s roadmap for the sector, and no group will deter or distract us from achieving this goal,” he concluded.
Recall that the protesters, led by some civil society organisations, called for the sack of Kyari, citing skyrocketing fuel prices.
Business
NNPC hasn’t authorised sale of petrol to marketers – Dangote refinery replies IPMAN
The Dangote Petroleum Refinery has stated that it has not received any payments from the Independent Petroleum Marketers Association of Nigeria (IPMAN) for refined petroleum products, clarifying its position amidst ongoing concerns from oil marketers regarding petrol supplies.
According to a statement on Thursday, October 31, by Anthony Chiejina, the group’s chief branding and communications officer, the refinery has no business dealings with IPMAN and cannot be held accountable for any payments made to the Nigerian National Petroleum Corporation (NNPC).
This comes after Aliko Dangote, founder of Dangote Industries Limited (DIL), noted that the refinery holds over 500 million liters of petrol, yet oil marketers are reportedly not purchasing the product. IPMAN, however, countered by claiming its members have struggled to load petrol from the refinery, despite having paid N40 billion to NNPC.
Chiejina confirmed that while discussions with IPMAN are ongoing, there are no direct business arrangements between the two. He emphasized, “It is misleading to suggest that they (IPMAN members) are experiencing difficulties loading refined products from our Petroleum Refinery, as we currently have no direct business dealings with them. Consequently, we cannot be held responsible for any payments made to other entities.”
The Dangote Refinery reiterated its capacity to meet national demand for various petroleum products, including petrol, diesel, and aviation fuel, capable of loading 2,900 trucks daily and transporting products by sea. The refinery also advised IPMAN to register and make direct payments for access, assuring, “There is more than enough petroleum product to satisfy the needs of their members.”
Chiejina urged stakeholders to avoid unsubstantiated media statements, warning that such actions could impede economic progress under President Bola Ahmed Tinubu’s administration. The statement called for collaboration among stakeholders, aligning with Tinubu’s economic re-engineering initiatives.
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