Rishi Sunak’s decision to extend the furlough scheme may have come too late to save jobs, employment experts said yesterday.
The government reinstated the job retention scheme on Saturday, the day it was due to expire, as it announced a second nationwide lockdown.
Under the scheme, the government will once again pay 80 per cent of the salaries of workers who have been furloughed by their employer. However, many businesses had already started letting go of workers in anticipation of its closure.
Heather Self, tax partner at Blick Rothenberg, said: “Employers are supposed to agree any changes to employees’ contracts in advance — how are they supposed to do that at six hours’ notice at a weekend?
“While it is welcome news that additional support is being offered to businesses during the new lockdown restrictions, the change may well come too late to save jobs.”
Businesses said that they were struggling to plan for the future in response to the chancellor’s repeated policy changes. Mr Sunak has made substantial tweaks to his income support four times in the five weeks since his winter statement.
Back then, the chancellor replaced the job retention scheme with a far less generous jobs support programme. However, economists immediately found problems with the scheme, which they said would do little to stem the tide of rising unemployment.
He tweaked it days later once the government introduced three-tier localised lockdowns. The chancellor then bowed to public pressure to increase the government’s contribution to employment costs for workers on reduced hours.
He also doubled the grant for self-employed workers from 20 per cent of previous average earnings to 40 per cent. And now he has reinstated the furlough scheme.
Mr Sunak said at the time that he would make “no apology” for acting fast to the changing circumstances but businesses are struggling to keep up. Many will be unable to benefit from the job retention scheme as they had already started letting go of staff before its reintroduction on Saturday.
