Potential Plans for the future of the Coronavirus Job Retention Scheme?
Speculation is rife that Chancellor of the Exchequer, Rishi Sunak, is planning to make amendments to the Coronavirus Job Retention Scheme (CJRS) and to cut the 80% of wage subsidy offered to 60%, in the first of a series of steps to bring the system to an end.
Publications such as The Guardian have suggested that, from July, the scheme will be wound down in alignment with the government’s plans to slowly ease lockdown measures and allow people to go back to work. Reports suggest that nearly a quarter of employees in Britain have been furloughed in the past fortnight which has resulted in escalating costs to the exchequer.
If the wage subsidy is cut from 80% to 60%, the £2,500 monthly cap on payments will also be lowered. It is thought that future plans may mean that furloughed staff will also be allowed to work but would be entitled to a smaller subsidy from the state.
An announcement is expected before mid-May as employers who need to make over 100 staff redundant as a result of the outbreak of coronavirus must start consultations 45 days before making any of those redundancies.
At present, the CJRS is confirmed as being in place until the end of June, although it has been said that this could be reviewed, and extended further if necessary.
Figures released by HMRC highlighted that a total of 6.3 million jobs have been temporarily laid off, by 800,000 employers, who have taken advantage of the CJRS. The costs to the exchequer had already amounted to £8 billion as of 3 May 2020.
Rishi Sunak commented:
“I’m working, as we speak, to figure out the most effective way to wind down the scheme and to ease people back into work in a measured way.”