Today the Chancellor of the Exchequer, Rishi Sunak, will announce further details on the future of the Coronavirus Job Retention Scheme (CJRS). This follows his House of Commons statement on 12 May where he announced that the CJRS would be extended until October and additional flexibility would be introduced from August, with the costs shared between businesses and the government.
The CBI has worked closely with the Treasury throughout this period on the design of the second phase of the CJRS. Our key priorities are outlined below:
- The introduction of flexibility into the CJRS before the beginning of August to enable employers to gradually bring back employees, in alignment with the easing of lockdown measures and reopening of the economy. Members told us that this would allow employers to test the strength of their return to demand without the risk of huge wage costs
- The importance of a high degree of flexibility – both allowing for part-time furlough and shorter minimum furlough periods – so that employers could choose the best option for them, according to shift-patterns and the impact of social distancing requirements in their workplace
- The introduction of a co-payment system that did not significantly disincentivise employers from bringing people back to work, with employers paying full-pay for hours worked
- The benefit of a tapered co-payment model that avoided unnecessary cliff-edges in the provision of the CJRS support which was likely to speed up employers’ decisions about jobs
- The importance of a separate support system for people who are not able to work because they have been told to shield or isolate or have caring responsibilities.
The CJRS was introduced in March to support employers, and their staff, whose work had been severely impacted by the outbreak of coronavirus, paying 80% of employees’ salary or up to a max £2,500 per month. To date, 8.4 million people have been supported via the CJRS with government paying £15bn to furloughed workers. The CBI will continue to work with the government as it develops more detailed guidance on the second-phase of the CJRS.
Please continue to send feedback and queries on the CJRS to the CBI’s dedicated Coronavirus Inbox.