HMRC chief re­fuses to back Chan­cel­lor’s plans for £1,000 jobs bonus as cost con­cerns mount

The Daily Telegraph - Business - - Summer Statement - By Rus­sell Lynch and Tim Wal­lace

THE boss of HMRC has re­fused to sign off Rishi Su­nak’s £1,000 bonus scheme for firms that bring back fur­loughed work­ers amid con­cerns it may do lit­tle to save jobs.

In a let­ter to the Chan­cel­lor, Jim Harra warned that it was hard to pre­dict the im­pact of one of his flag­ship res­cue plans – both in terms of its pos­si­ble cost and the pos­i­tive dif­fer­ence the pro­gramme would make.

It came as Mr Su­nak him­self ad­mit­ted that some tax­payer cash ploughed into the scheme would be wasted on firms that would have re­tained staff any­way. The scheme is in­tended to per­suade firms to bring back as many as pos­si­ble of the 9.4m work­ers who were put on tax­payer life sup­port through the fur­lough scheme.

The sub­sidy is be­ing wound down by Oc­to­ber and it is feared this could trig­ger a huge wave of job losses.

In an at­tempt to pre­vent mas­sive lay­offs, the pro­gramme will pay £1,000 for ev­ery pre­vi­ously fur­loughed staff mem­ber kept in a job un­til Jan­uary.

The head of HMRC said he needed writ­ten in­struc­tions to go ahead from Mr Su­nak be­cause the scheme was so risky, un­der White­hall pro­ce­dure typ­i­cally used by man­darins when they are un­able to sat­isfy them­selves about a pol­icy through the usual checks.

These “min­is­te­rial di­rec­tions” have al­ready been needed to push through poli­cies at least 11 times dur­ing the pan­demic. Mr Harra said “there is a sound ra­tio­nale” for of­fer­ing the pay­out.

The In­sti­tute for Fis­cal Stud­ies said the bonus would cover more than half of the costs for em­ploy­ing the low­est­paid work­ers be­tween the end of the fur­lough scheme and Jan­uary. It would cover around a quar­ter of these costs for the av­er­age fur­loughed worker.

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