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Large retailers turn down furlough bonus

High Street behemoths Primark and John Lewis are leading the pack of large businesses that have publicly rejected the Chancellor’s £1,000 furlough retention bonus.

14th Jul 2020
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Primark store, Lewisham

Primark was one of the first to decline the Job Retention Bonus, which would have given the budget fashion retailer £30m for the 30,000 employees it furloughed. The chain removed its employees from the job retention scheme as the majority of its stores re-opened after lockdown restrictions eased.

“The company believes it should not be necessary therefore to apply for payment under the bonus scheme on current circumstances,” a Primark spokesperson confirmed.

Since the Chancellor announced the scheme in his Summer Statement a steady stream of large businesses have taken the same stance, even some that are making redundancies.

Joining Primark in refusing the £1,000 incentive was high street staple John Lewis, which had a £14m bonus on the table, and bookies William Hill who stood to receive £7m.  

But other big brands in hard-hit sectors are taking the money. Short break holiday company Centre Parcs is claiming the £8m its after furloughing the majority of its staff members during the lockdown. With pubs on the ropes even after opening back up the chief executive of Young’s pubs told the Standard: “No retail business is out of the woods.” The brewer will be accepting the bonus for its 4,500 furloughed employees.

Chancellor Rishi Sunak presented the Job Retention Bonus as an incentive for employers to bring furloughed back staff and save them from redundancy. During his Commons address said that employees should be doing not be brought back for “sake of it” and do “decent work” for at least £520 per month until January 2021 to justify the £1,000 bonus.

Sceptical voices

With a costly price tag of £9bn, Sunak’s furlough bonus failed to convince critics such as accountancy practitioner Paul Barnes that it would rescue many jobs, while big companies already bringing back staff would make a “windfall”. Even HMRC chief executive Jim Harra questioned the scheme’s value when seeking a ministerial directive from Sunak after concluding the furlough bonus didn’t meet departmental standards for managing public money.

Appearing on Any Answers Live this past Tuesday, Rebecca Benneyworth summarised the dilemma Sunak faced when he approved the scheme:  “[The Job Retention Bonus has] come in for criticism for being badly targeted but there is always this dilemma: if you target something, you immediate add complexity.

“And the more you try and focus it on the right people who need it, the more complicated it becomes both to administer from the government side and also to apply for from the business perspective.

“Basically, [Sunak]’s thrown it out and some will not be claiming it. My clients will be aware because I am telling them about it, and we’ll see whether they feel it is appropriate to claim and I will support them to claim it.”

Will your clients or business decline the furlough retention bonus?

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