Firms told to pay part of furlough as Rishi battles to get UK moving
RISHI Sunak will spearhead a “collective effort to reopen the country” now that lockdown restrictions are easing.
The Chancellor has laid out plans to relieve the coronavirus burden on taxpayers as Britain slowly returns to work.
Among the changes are employers contributing to the wages of furloughed staff from August onwards.
Mr Sunak set out a sliding scale that starts with modest changes making employers cover pensions and national insurance contributions.
As the job retention scheme is wound down, they will start to pay some of the wage bill, hitting 20 per cent of the cost before it closes.
Extra help is also being given to the self-employed but at a lower rate than payroll staff.
Mr Sunak said: “As Britain returns to work we need to adapt the emergency programmes we put in place to bridge through the crisis.
Develop
“Our thoughts, our energies, our resources must turn to looking forward to planning for the recovery and we will need the dynamism of our whole economy as we fight our way back to prosperity.
“Not everything will look the same as before. It won’t be the case that we can simply put the key in the lock, open the door and step into the world as it was in January.
“We will develop new measures to grow the economy, to back business, to boost skills and to help people thrive in the new postCovid world.
“Today, a new national collective effort begins to reopen our country and kick-start our economy.”
Mr Sunak laid out the changes at the Downing Street daily coronavirus briefing where he updated the country on the latest death toll figures.
He said 38,161 people had now died in hospitals, care homes and the wider community by 5pm on Thursday, up by 324 from the day before.
The Chancellor said the figures showed the UK is past the peak of the virus and the country will now have to adapt.
He said there is broad consensus across the political and economic spectrum that the furlough scheme “cannot continue indefinitely”.
He said: “I believe it is right in the final phase of this eight-month scheme to ask employers to contribute alongside the taxpayer towards the wages of their staff.”
The Chancellor insisted he understood the concerns of businesses and so was asking them to pay “only a modest contribution introduced slowly” over the coming months.
He said the scheme was one of the “most generous” in the world and had been set up to save as many jobs as possible.
But he warned that it will not be extended again once it closes in the autumn.
Around 8.4 million workers from one million firms are being paid through the Government’s job retention scheme.
But it has already cost £15billion and the Government wants employers to shoulder some of the burden.
Under the new furlough rules, all employees unable to return to work will still receive 80 per cent of their salaries up to £2,500 a month but employers will begin to pick up some of the bill.
From August, businesses will pay
their national insurance and pensions contributions and the following month they will cover 10 per cent of wages as well.
In October, they will be expected to pay 20 per cent and the scheme will close at the end of the month.
Workers can return part-time from July, a month earlier than planned, but businesses will not be able to add new staff to the scheme from that point.
Mr Sunak made a surprise announcement setting out fresh help for self-employed workers.
A final grant worth 70 per cent of their average monthly trading profits, capped at £6,570, will be available.
Measures
Employers have warned they will have to make redundancies once changes to the support are made, particularly if their businesses cannot reopen by the time the taps are turned off.
The Treasury said sectors that are particularly badly hit are benefitting from other measures, such as business rates being written off for the year as well as loans.
British Chambers of Commerce director general Adam Marshall said: “The Chancellor has listened to business communities and struck a careful balance that will help many firms bring furloughed staff back to work flexibly over the coming months.”