Chancellor extends furlough until end of October and introduces flexibility from August

Rishi

The Coronavirus Job Retention Scheme has been extended until the end of October and more flexibility will exist from August Chancellor Rishi Sunak revealed at a press conference today (May 12).

He said that from the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff.

The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month.

The news came following speculation that the Chancellor was going to reduce the scheme, which currently pays 80% of employees’ salaries, to 60%.
Instead 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.”

As we reopen the economy, we need to support people to get back to work. From the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff.

“The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month.

Marc Crothall, Chief Executive of the STA said, “The Chancellor’s announcement of the extension of the current Job Retention Scheme until the end of October will offer comfort to many within the tourism industry and is very much welcomed. The STA has worked tirelessly to communicate the necessity for flexibility in the scheme through our daily conversations with the Scottish and UK governments.

“As always, the devil will be in the detail. Given the dependence of Scotland’s tourism industry in terms of seasonality; assurance will not be felt by all. There are a great many businesses that will not survive beyond October as it will simply not be viable for them to start trading again until the Spring. Sadly, the extension to furlough alone will not be sufficient to stop many businesses from making redundancies, however, we look forward to learning more detail over the coming weeks.”

While Emma McClarkin, Chief Executive of the Scottish Beer & Pub Association, said, “As a sector employing nearly 70,000 people in Scotland and where 90% of the staff have been furloughed, we cautiously welcome the extension and increased flexibility of the Job Retention Scheme by the Chancellor today.

“The extension is particularly important to pub and brewery staff as they will not be able to return to their work as quickly as other sectors. However, if pubs and breweries are expected to pay a proportion of furlough costs whilst remaining closed, it could still lead to significant job losses for our sector. Pubs and breweries cannot remain closed with no revenue coming in but be asked to cover a higher proportion of employment costs.

“The increased flexibility announced today allowing for part-time working is also imperative and welcomed. It will enable pub and brewery staff to come back on a part-time basis, which will be crucial as pubs and breweries re-open under social distancing restrictions.

“The UK Government has done absolutely the right thing by extending the scheme and we hope it will prevent job losses. We will await to see the full detail at the end of the month so that we understand how much it will help our sector and how it will work in conjunction with the re-opening plans for pubs and breweries. There will also have to be extra considerations for those in Scotland and the other devolved nations, where restrictions will likely last longer.

“In the meantime, we continue to urge both Governments to bridge the significant gaps in the current financial support our sector faces as we ask them to help us get back on our feet whilst we re-open under social distancing conditions. This means removing the £51k rateable value cap on grant eligibility as well as extending grants, improving access to loans, and further support for brewers on beer duty.

“Without additional financial support specifically for pubs and brewers, the social hubs and heart of communities in many towns, villages and cities across the UK will remain at risk.”

 

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