Credit, Collections & Insolvency News
The government’s Coronavirus Job Retention Scheme will remain open until the end of October, the Chancellor has announced. In a boost to millions of jobs and businesses, Rishi Sunak said the furlough scheme would be extended by a further four months with workers continuing to receive 80% of their current salary.
Chancellor Rishi Sunak said “Our Coronavirus Job Retention Scheme has protected millions of jobs and businesses across the UK during the outbreak – and I’ve been clear that I want to avoid a cliff edge and get people back to work in a measured way. This extension and the changes we are making to the scheme will give flexibility to businesses while protecting the livelihoods of the British people and our future economic prospects.”
New statistics published today revealed the job retention scheme has protected 7.5 million workers and almost 1 million businesses.
The scheme will continue in its current form until the end of July and the changes to allow more flexibility will come in from the start of August. More specific details and information around its implementation will be made available by the end of this month.
The government will explore ways through which furloughed workers who wish to do additional training or learn new skills are supported during this period. It will also continue to work closely with the Devolved Administrations to ensure the scheme supports people across the Union.
The Chancellor’s decision to extend the scheme, which will continue to apply across all regions and sectors in the UK economy, comes after the government outlined its plan for the next phase of its response to the coronavirus outbreak.
Responding to the news, The Money Advice Trust, the charity that runs National Debtline and Business Debtline, has welcomed the Chancellor’s decision to extend a more flexible version of the government’s Job’s Retention Scheme until October – and is calling for self-employed people to be given the same level of certainty.
Joanna Elson OBE, Chief Executive of the Money Advice Trust said “Workers are breathing a sigh of relief after the Chancellors’ welcome and sensible extension of a more flexible Job Retention Scheme until October. Self-employed people deserve the same certainty – and we hope a similar extension will be announced to the Self Employment Income Support Scheme as soon as possible.”
“The government still needs to act to support the incomes of owner-directors, who are falling into the gaps between these two schemes.”
“Today’s news is also a clear sign of how long the government expects the economic impact of Covid-19 to last. It will be crucial that the eventual withdrawal of relief measures that have been introduced across government and regulators is done in a slow, careful and co-ordinated way.”
Dame Gillian Guy, Chief Executive of Citizens Advice, said “Extending the furlough scheme and allowing employers to bring back their workers part-time are sensible steps to protect household finances. The Job Retention Scheme was an unprecedented intervention which has protected jobs and put money in people’s pockets. We have made clear that changes to the scheme would be needed to make sure people don’t face a financial cliff edge.”
“Sadly, we continue to see cases where people in the shielded group are being denied furlough. People in this group need a right to access this scheme if they cannot work safely. Nobody should be forced to choose between paying the bills or protecting their health.”
Mike Cherry, National Chairman of the Federation of Small Businesses, said “The Job Retention Scheme is a lifeline which has been hugely beneficial in helping small employers keep their staff in work, and it’s extension is welcome. Small employers have told us that part-time furloughing will help them recover from this crisis and it is welcome that new flexibility is announced today.”
“Extending the Job Retention Scheme (JRS) and allowing small firms to furlough staff on a part-time basis will protect thousands of livelihoods over the months ahead. Our members have been telling us loud and clear that the ability to furlough staff on a part-time basis will be central to aiding gradual recovery at a time when economic activity is still in the doldrums.”
“We await further detail on the contributions that will be required of small employers after July. We need to ensure that those obligations are affordable for the many businesses that have had no revenue coming in for months now, but still have fixed overheads to worry about.”
“Our five million-strong self-employed community is also seeking reassurances about the measures that will be taken to avoid a cliff edge moment where income support is concerned. Many have benefited from the hugely ambitious income support scheme that was established for them – some have not – but they will all need additional help from this government over the coming months. Policymakers may have to look very closely at additional hardship funds for those that are currently falling through the gaps.”
BCC Director General Adam Marshall said “The extension of the Job Retention Scheme will come as a huge help and a huge relief for businesses across the UK. The Chancellor is once again listening to what we’ve been saying, and the changes planned will help businesses bring their people back to work through the introduction of a part-time furlough scheme. We will engage with the Treasury and HMRC on the detail to ensure that this gives companies the flexibility they need to reopen safely.”
“Over the coming months, the government should continue to listen to business and evolve the scheme in line with what’s happening on the ground. Further support may yet be needed for companies who are unable to operate for an extended period, or those who face reduced capacity or demand due to ongoing restrictions.”
Dame Carolyn Fairbairn, CBI Director-General, said “The Chancellor is confronting a challenging balancing act deftly. As economic activity slowly speeds up, it’s essential that support schemes adapt in parallel.”
“Extending the furlough to avoid a June cliff-edge continues the significant efforts made already and will protect millions of jobs. Introducing much needed flexibility is extremely welcome. It will prepare the ground for firms that are reawakening, while helping those who remain in hibernation. That’s essential as the UK economy revives step-by-step, while supporting livelihoods.”
“Firms will, of course, want more detail on how they will contribute to the scheme in the future and will work with government to get this right. Above all, the path of the virus is unpredictable, and much change still lies ahead. The government must continue to keep a watchful eye on those industries and employees that remain at risk. All schemes will need to be kept under review to help minimise impacts on people’s livelihoods and keep businesses thriving.”
“The greater the number of good businesses saved now, the easier it will be for the economy to recover.”
Michael Izza, ICAEW Chief Executive, said “The Chancellor’s bold decision to extend the furlough scheme for four months will sustain many thousands of viable businesses until the prospective arrival of better times. It will help protect millions of jobs which might otherwise be lost, at an incalculable social and economic cost. Employers and employees alike will be reassured.”
“Looking ahead, it is sensible that the scheme should incorporate greater flexibility to stay in step with the government’s strategy for a phased national recovery. Allowing companies to bring staff back into full-time working in stages will avoid a dangerous ‘cliff-edge’, but this must not create complexity and an administrative burden on business. ICAEW looks forward to working with HM Treasury and HMRC as they consider how to implement these changes.”
Key statistics:
| Number of Jobs Furloughed | 7.5 million |
| Number of Employers Furloughing | 935,000 |
| Total £ claimed | £10.1 billion |