Furlough: Rishi Sunak ‘must’ extend scheme as the ‘vaccine is being rolled’ – full details

Rishi Sunak gets quizzed over public sector pay freeze

Furlough payments have kept many people afloat during the pandemic and Rishi Sunak has been commended for extending the support in the face of ongoing coronavirus issues. Under current plans, the Coronavirus Job Retention Scheme is set to end in March but fresh calls have emerged to extend the scheme beyond this.

Today Peter Cheese, the chief executive of the Chartered Institute of Personnel Development (CIPD), has called on the Chancellor to make three “crucial” changes to the scheme, in order to protect jobs as the COVID-19 crisis continues.

These recommendations are based on consultations with HR leaders based in the UK who have been on the frontline of workplace decision-making in the pandemic.

Specifically, the organisation has made the following recommendations and/or demands:

  • First, for the Government to extend the scheme beyond 31 March to the end of June to help businesses plan and to continue to protect jobs against a very uncertain backdrop through the first half of the year.
  • Second, for the level of wage subsidy to remain at 80 percent for February and March given the vaccine roll-out programme will still be in its infancy and the trajectory of the virus uncertain over the next few months – it should then reduce to 70 percent in April and then remain at 60 percent for May and June 2021.
  • Third, for the next phase of the Job Retention Scheme to not just protect jobs, but create support to enable firms to train staff who are fully furloughed or working reduced hours and in particular, to provide funded outplacement skills development to any worker made redundant. 

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CIPD have written to Rishi Sunak today and further to this, Peter provided the following comments: “It is crucial that government sets out a long-term plan to protect jobs beyond March, to help businesses plan with confidence and minimise the need to make more redundancies against an uncertain backdrop through spring and early summer.

“Extending the Job Retention Scheme to the end of June will give businesses the certainty they need to protect jobs while the vaccine is being rolled out.

“In addition, linking the scheme to support for training will help upskill or retrain staff in sectors that have been particularly hard hit by the pandemic, and provide skills development help for workers who are made redundant over the period.

“The Government will of course be concerned about the cost of extending furlough beyond March, but its calculations must take full account of the costs of not doing so.

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“These include a significant increase in the number of people claiming Universal Credit, and reduced confidence and spending power in the economy at a time when both have never been needed more.

“Jobs that are lost over this period are also likely to feed into long-term unemployment as recruitment and onboarding costs will mean cash-strapped employers will hesitate to hire permanent staff again until they are certain about the strength of the economy.

“If we are to achieve economic and jobs recovery in the second half of next year, the Government must raise its ambition on job protection and investment in skills.”

It should be noted the Job Retention Scheme will be reviewed in January, meaning the Chancellor may yet introduce further changes and extensions.

The likelihood of this could be boosted by the fact that Rishi Sunak has been very generous with providing support thus far, having regularly promised to do “whatever it takes” to keep the economy going.

When first extending the furlough scheme into March, the Chancellor had the following to say: “I’ve always said I would do whatever it takes to protect jobs and livelihoods across the UK – and that has meant adapting our support as the path of the virus has changed.

“It’s clear the economic effects are much longer lasting for businesses than the duration of any restrictions, which is why we have decided to go further with our support.

“Extending furlough and increasing our support for the self-employed will protect millions of jobs and give people and businesses the certainty they need over what will be a difficult winter.”

On the other end of this scale, some experts and commentators have expressed weariness and dismay at the prospect of further state spending.

While deemed crucial, the various government support measures have proven to be very costly.

In November, it was reported the measures the government has taken to support businesses, workers and household incomes is likely to cost over £200billion in this year alone, with costs to rise further the longer the crisis continues.

In recent months, several experts have warned taxes will have to rise to cover these debts, placing an additional burden on the public.

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