More needed despite greater certainty over furloughs
By Rob Freeman | 1st June 2020
The Chancellor has provided certainty with his changes to the furlough scheme, according to the Federation of Small Businesses.
But the organisation's national chairman Mike Cherry has called on Rishi Sunak to provide support for those who continue to miss out.
Confirming it would end in October, the Chancellor announced a tapering of the Job Retention Scheme with employer's paying for National Insurance and pension contributions for furloughed staff from August with the Government continuing to pay 80 per cent of their wages.
That falls to 70 per cent in September and 60 per cent in October with employers making up the balance.
In addition, flexible working under the scheme will be possible from July - a month earlier than planned.
Self-employed workers will be able to access a second lump sum of cash from the Self-Employment Income Support Scheme worth 70 per cent of average monthly trading profits to cover three months' worth of income, capped at £6,570.
Mr Cherry said: "The Chancellor has given thousands of small business owners the certainty they need to plan for the coming months.
"We've always said that extending the Job Retention Scheme and making it more flexible would be key to getting the economy back on its feet.
"By providing employers with the adaptability they'll require as businesses adjust to a new normal, and bringing forward the flexible furlough launch date, the government is giving hope to small firms right across the UK.
"Delivery is now key, and new operational systems should be as streamlined as possible."
But he stressed more needed to be done to help self-employed workers who have fallen through the net and will need continued support.
"More should now be done to help the newly self-employed' he said. "Those who have filed a 2019-20 tax return should be in scope for this fresh support, not just those who submitted for the 2018-19 year.
"We have written to the Small Business Minister with a range of new policy proposals aimed at helping this group off the back of a hugely challenging period."
He continued: "More widely, as we look towards recovery, the Government should help small business owners who do the right thing.
"Many will struggle with the costs of putting safety measures in place after weeks of little or no revenue - back to work vouchers are one route through which to assist those in this position.
"The Treasury should also look again at statutory sick pay terms. Some of those who suffer from the coronavirus will face additional absences because of secondary health conditions further down the line.
"We hope the government will consider a full statutory sick pay rebate for those with under 50 staff covering multiple absences until the end of the year."
The FSB's Gloucestershire development manager Sam Holliday expressed concern that businesses who are delayed in returning to full trading may still struggle.
He said: "The fact that there will be some element of the scheme right through until October is encouraging and reassuring - although there may still be groups of people particularly in hospitality that may need support beyond that .
"Elsewhere, the move to make it a more flexible scheme allowing employees to work part-time with part of their wages paid also seems sensible.
"The biggest danger of course is that as employees are asked to pay more towards the scheme with no sign of their pre-virus level of income is returning this may have an impact on jobs which is a real, genuine concern."
He continued: "At least now businesses have a clearer idea of the path ahead and we hope it will give them a chance to properly plan to see how can best return and be part of the UK revival."
Writing in his business expert column for Punchline-Gloucester.com , Nigel Tillott from Davies & Partners Solicitors in Gloucester spelled out the timetable for the changes to the scheme.
He said: "For many employers there will be some serious thinking and planning to do at this point.
"What is demand likely to be like in the short and medium term, who do I need to bring back and when, will part-time hours assist, will redundancies be required and is there scope for other measures such as the agreement of longer term part-time working or a need to get agreement to reduce pay in the short or longer term?"
The British Beer & Pub Association welcomed the additional flexibility and gradual tapering, but warned that all pubs needed to be operating at a sustainable level by the time the changes to contributions kicks in.
Chief executive Emma McClarkin said: "Pubs have been closed since March with no income coming in.
"Expecting them to contribute to furlough costs if they are closed or operationally unviable is simply not feasible.
"Preventing pubs from reopening as the furlough support reduces means that those pubs will have no income to cover the additional staff costs - risking job losses and pubs staying closed for good."
She repeated the association's calls for two-metre social distancing rules to be changed to the World Health Organisation's recommendation of one metre, saying it would allow three quarters of pubs to reopen.
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