Furlough scheme: Chancellor warns of ‘hardship’ and job losses ahead as he can’t save every one


THE CHANCELLOR tonight warned of “hardship” and job losses ahead and stressed he can’t save every single one.

Rishi Sunak said he would fight to make sure anyone who loses their job gets them back as soon as he can.

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 The Chancellor warned there would be hardship ahead thanks to coronavirus

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The Chancellor warned there would be hardship ahead thanks to coronavirus

But he couldn’t guarantee that some people would not become unemployed as a result of the ongoing coronavirus crisis.

Speaking as he extended the self-employment scheme this evening with an extra £6,750 for each worker, he told the daily Downing Street briefing: “I can’t, and we cant, protect every single job and business.

“We will try and protect as many of those jobs as possible.

“There will be hardship ahead for many.

“That rests heavily on my shoulders.

“I will work very hard to make sure that all those who do lose their jobs, I am working as hard as I can to get them back into work, good work, as soon as possible.”

But financial experts warned that up to two million jobs could be lost in the coming months as firms start to make people redundant.

Institute of Economic Affairs Research Fellow Len Shackleton said most businesses will have to lay off staff to make ends meet.

He said: “​I would expect that redundancies will follow pretty quickly.

“It seems likely that the only way to avoid bankruptcy for many, particularly small businesses, will be to make staff redundant and/or close the business down completely.

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“I would expect the biggest hits in areas where social distancing will where social distancing will mean much smaller capacity – restaurants, cafes, many pubs, smaller shops.”

The Chancellor tonight announced that his furlough scheme to protect job losses would come to an end in October.

And firms would have to start paying their way from August, beginning with pensions cash and National Insurance contributions.

From September, businesses who continue to furlough employees will have to stump up 10 per cent of their wages, and 20 per cent in October.

I believe it is right in the final phase of this 8 month scheme to ask employers to contribute towards the wages of their staff.

Rishi Sunak

The Government will continue paying the remainder of the wages to ensure all furloughed workers receive 80 per cent of their salaries – up to a maximum of £2,500 per month – until the end of October when the scheme will end.

But Mr Sunak revealed that furloughed workers will be allowed to return part-time from July in a bid to give businesses maximum flexibility as they begin to resume operations and adjust to the new Covid-19 workplace arrangements.

This is a month earlier than previously planned.

He said tonight: “I believe it is right in the final phase of this 8 month scheme to ask employers to contribute towards the wages of their staff.

“As we reopen the economy, there is broad consensus across the political and economic spectrum, the furlough scheme cannot continue indefinitely.”

Timeline of furlough changes

June – No change

July – Furloughed workers can return part-time

August – Employers to pay NI and pensions for furloughed staff

September – Government support drops to 70 per cent, employers to pay 10 per cent

October – Government support drops to 60 per cent, employers to pay 20 per cent

End of October – End of furlough scheme

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Officials added that companies can be flexible with their definition of “part-time” as long as a full-time employee has not returned to normal hours.

Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

The Treasury said: “Individual firms will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them – and will be responsible for paying their wages while in work.”

The Institute for Fiscal Studies said tonight that the total cost of the UK’s income support and furlough schemes could easily go over £100bn.

Britain’s pubs warned today that they won’t last the summer if they have to pay before they are allowed to reopen again – thought to be in July.

Chief exec of British Beer and Pub Association Emma McClarkin said many pubs may never reopen their doors.

Ms McClarkin told The Sun: “The pandemic has had a devastating effect on the pub sector, we’ve had no money coming in, no trade at all from March.”

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Chancellor Rishi Sunak explains the levels of contributions employers will make to govt’s coronavirus furlough scheme





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