Workers must be given continued support of some kind to navigate the challenge aheadby John Bowers / June 2, 2020 / Leave a comment
So, Rishi Sunak has been generous yet again. The unprecedented Coronavirus Job Retention Scheme (CJRS, usually known as the furlough scheme) will continue until October this year, albeit on a gradually reducing basis. Employees on furlough will be permitted to work part time. From 1st August, employers will have to pay employees’ national insurance and pension contributions.
From 1st September, the government will only reimburse 70 per cent of salary (up to a maximum of £2,190). Employers will be required to top-up to 80 per cent. After 1st October, the reimbursement will be 60 per cent of salary (up to a maximum of £1,875).
The scheme will close altogether on 31st October 2020. No one can go on the scheme during those latter months who has not been furloughed by 10th June.
We still await the Treasury Direction and the Employer’s Guidance to see the details. But there are some things we can say with certainty about the performance of the scheme so far and the problems that might follow its withdrawal.
What is clear is that the chancellor has avoided the lure of sectoral schemes or regional variants. The cost so far (according to the Office for Budget Responsibility)has been about £63bn for this and the self-employed scheme. This will have to be clawed back, presumably in higher taxes. The Job Retention Scheme has been a mixture of employment and social security and savours of the universal basic income which is anathema to Tory ideology. It can be counted a success; the scheme was rolled out quickly; indeed until March the word furlough was not even in most of our vocabularies. The only category of people not entitled to support of any kind are those who pay themselves with dividends.
There has clearly been some fraud on the furlough scheme, with many tales of employers who take the cash actually requiring employees still to work. It has however been efficiently operated, with HMRC providing a fast turnaround of applications.
Interesting work led by Abi Adams Prassl of Oxford University has found a major gender impact on joblessness. Even after controlling for variables, women in the UK were still 15 per cent more likely to have lost their job and 8 per cent more likely to have…