Small and medium sized businesses in the UK want the Coronavirus Job Retention Scheme to continue
The Federation of Small Businesses, representing small and medium sized businesses in the United Kingdom (U.K.), have requested the Government to continue the Coronavirus Job Retention Scheme (CJRS) or furlough scheme beyond today, i.e., Thursday, September 30, 2021.
Introduced in March 2020, CJRS has so far helped pay the wages of 11.6 million workers who have been badly affected by the Coronavirus (COVID-19) led lockdowns. CJRS, accounts for around 1/5th of the money the Government has spent on the response to the pandemic. While it has been widely appreciated for protecting millions of jobs, firms in sectors where business have still not returned to normal say they need further support.
Under the CJRS, the Government paid towards wages upto £ 2,500 per month to people who could not work, or whose employers could no longer afford to pay them. Initially, CJRS paid 80% of their usual wage, but in August and September it paid 60%, with employers paying 20%.
The Federation of Small Businesses (FSB) has also cited concerns over a colder environment for business. The employers and workers alike will have to cope with the end of the furlough scheme, as well as the scrapping of an incentive for hiring apprentices, rising energy bills and the planned cut to Universal Credit in October.
With international travel being badly hit and still not picking up well, older people in the sector are at great risk. The Association of British Travel Agents (ABTA) has warned that companies in the sector still face extreme difficulties because of continued travel restrictions. They have called for sector-specific support for smaller firms in particular, who have lost two summers of sales, as well as those which specialise in destinations till subject to red list rules.
The Spokesperson for ABTA said, “The government needs to look at how it can support these businesses – particularly as the furlough scheme comes to an end – through a package of tailored financial support, including extending business rates relief and a specific grant scheme for travel companies.”
As per Her Majesty’s Revenue and Customs (HMRC), a non-ministerial department of the U.K. Government responsible for the collection of taxes, the payment of some forms of state support and administration of other regulatory, the furlough scheme was still supporting the incomes of around 1.6 million workers in July 2021.
Posting a video of how furlough scheme has helped people, the Chancellor of the Exchequer – Rishi Sunak tweeted,
When we said we’d do whatever it takes, we meant it.
— Rishi Sunak (@RishiSunak) September 27, 2021
This is the story of Furlough👇 pic.twitter.com/dDwJK0iBz5
He also said that while he is immensely proud of the £ 70 billion scheme, it is time to close it now. The number of workers on furlough has fallen steadily this year as lockdown restrictions eased and businesses reopened.
According to Citizens Advice, an independent organisation specialising in confidential information and advice to assist people with legal, debt, consumer, housing and other problems in the U.K., people could work elsewhere while furloughed, if their employment contract allowed. Besides, many forecasters, including the Bank of England, are expecting a small rise in unemployment as the furlough scheme will end now.
An independent think tank Resolution Foundation which focuses on people with low incomes has called the CJRS a great success. It said that furlough had been as critical to fighting the COVID-19 crisis as nationalizing the banks was to fight the global financial crisis.
