The end of the JRS on the 30 June was front and centre of minds across the UK when the Chancellor stood up in Parliament yesterday to announce the future of the scheme. So, it will have been a great relief to firms across the country, when he announce that the scheme will be extended by an additional four months until the end of October.
The scheme in its current form will not change until the end of July, with the government continuing to cover 80% (or £2500) and employees unable to work when they have been furloughed. But he did announce changes to the scheme from 1 August onwards when there will be the possibility of part-time furloughing as well as the sharing the costs between employers and the government. It is not yet clear, what type of part time furloughing will be available or how the cost will be shared between the government and businesses. What we do know is that all sectors will be able to access the scheme and employees will continue to receive 80% of their salary (or maximum £2500).
This will be a welcome extension and a sign that the government has listened to businesses’ call for additional flexibility. But crucially it avoids the 30 June cliff edge, protecting jobs across the country. This was particular important at this time in light of the Friday deadline when businesses would need to make notice for redundancies. As always, the devil will be in the detail of the design of the scheme from August onwards. This will go hand in hand with the broader government policy on reopening businesses and social distancing requirements.
The CBI will continue to feed in ideas and questions to policy makers in HM Treasury and HMRC. Avoiding this major cliff edge at the end of June is an important step, the focus must now be on supporting firms with ongoing cash flow issues, as well as starting to identify some of the longer-term policy measures needed to encourage business dynamism and allow for structural adjustments to the economy. Please get in touch if you have any questions.