Sequel to furlough scheme revealed as firms offered bonuses for saving jobs
8th Jul 2020
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The furlough scheme has been one of the most important policies to emerge in the COVID-19 pandemic, but the Chancellor today insisted it would be ‘irresponsible’ to keep it going beyond October.
So, furlough – or the Coronavirus Job Retention Scheme to give the official title – will be wound down ‘gradually and flexibly’.
The sequel to furlough
As Rishi Sunak revealed the curtain call for the programme, he went on to reveal another major scheme, which could be seen as the sequel to furlough.
The new Job Retention Bonus scheme will offer businesses £1,000 for every furloughed employee they bring back to work.
What does it entail?
Described as a new reward to incentivise employers who successfully bring back furloughed staff, the Chancellor said it was the next phase of plans to support employment.
If all nine million people who were furloughed continue to be employed, it will amount to the Government spending £9bn to retain people in work.
What are the conditions?
But businesses were warned there are conditions to qualify for the retention bonus – employees must be receiving at least £520 per month, every month, until January. Staff must be continuously employed from October through to January. The payments will be available from February 2021. The move is about businesses getting the confidence to retain and hire staff, Mr Sunak explained, adding: “If you stand by your workers, we will stand by you.”
‘Difficult moment’ as furlough ends
Mr Sunak said furlough would be wound down flexibly and gradually, continuing to support people till October.
Mr Sunak delivered the news as part of his Summer Statement - an update on the economy and Government plans for tackling the COVID crisis. He said furlough had been “a lifeline for millions” but “cannot and should not go on forever”.
When furlough ends it will be “a difficult moment” for many, he admitted, but insisted “endless extensions” would be “irresponsible” and provide “false hope”.
A grim outlook
Mr Sunak painted a grim picture of the economy - which has retracted 25% - the same amount it grew in the last 18 years.
He acknowledged “people are worried still” about unemployment and their future job prospects – hence the reason for his new policies today.
He pledged: “We will do all we can to give people the opportunity of good and secure work. Although hardship lies ahead no one will be left without hope.”
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