The Press and Journal (Inverness, Highlands, and Islands)
Changes to job scheme
● But chancellor warns of ‘hardship’ for many with furlough finishing in October
Employers to pay share of furlough costs
Chancellor Rishi Sunak has extended support for selfemployed workers and unveiled a new “flexible furlough” system for firms.
But the UK Government minister confirmed the vital funding schemes “will close” for good in October and admitted “there will be hardship ahead for many”.
Trade unions said workers in struggling sectors such as leisure, aviation and hospitality must not “just be thrown to the wolves” in the autumn.
Mr Sunak’s announcement of an extra three months of cover ended fears that support for self-employed workers would come to an “cliff-edge” ending this weekend.
The grant will, however, be lower than it has been, down from 80% of average monthly trading profits with a cap of £7,500, to a new rate of 70% of profits, capped at £6,570.
Cash support for employees of businesses, meanwhile, had already been extended to October, but Mr Sunak announced further details yesterday of the additional contributions that would be expected from employers towards the furlough of staff.
Under the new “taper” system, firms would begin by paying national insurance and pension contributions in August, and by October they would be footing 23% of gross costs for each worker on average.
Mr Sunak said the latest calculation was the cost of the scheme by then would be £100bn, and it would close in October.
“I have aimed and tried to make the scheme as generous as possible, in terms of its duration, its flexibility, the contributions we’re asking, to try and protect as many of those jobs as possible,” he said,
“But there will be hardship ahead for many, and that rests heavily on my shoulders.
“I am very conscious of that, and we are working very hard, and I will work very hard, to make sure all of those who lose their jobs as a result of what is happening, I can get them back into work, and good work, as quickly as possible.”
Reacting to the announcement, Scottish Government Economy Secretary Fiona Hyslop welcomed the extension of the schemes, but raised concerns about the impact of additional contributions from businesses.
“While some employers will be able to contribute to the costs of the scheme, this cannot be a blanket approach across all employers and sectors,” she said.
“There remain some sectors that will likely still face restrictions in August... such as the hospitality sector, where a very large proportion of employees are currently furloughed.
“If there is not some allowance for this... then this may just delay, rather than avoid, mass redundancies and business closures in those sectors.”
Mr Sunak also announced that, from July 1, businesses would be given the flexibility to bring furloughed employees back part-time, a month earlier than previously detailed.
Andrew McRae, Federation of Small Businesses (FSB) Scotland policy chairman, said: “This announcement gives Scottish small business owners and the self-employed additional certainty for the next few months.
“Opening up the part-furlough option a month earlier than planned will help small employers sustainably rebuild their business as restrictions are lifted and trade returns.”
But he too warned that additional support would be required for certain sectors “for whom a return to any sort of revenue generation remains some way off ”.
Matt Abraham, supply chain director at Oil and Gas UK, said: “Many will appreciate that the furlough scheme cannot be extended indefinitely, but with our recent report warning up to 30,000 jobs could be lost, it is clear decisive action will be required.”
John Phillips, GMB acting general secretary, said: “The chancellor’s furlough plans provide a valuable lifeline for business and workers – but people mustn’t be abandoned while the economy is still stuttering.”