FURLOUGH SCHEME CHANGES RISK BUSINESSES AND JOBS
Patricia Gibson MP has warned that reduced support for furloughed workers and self-employed people outlined by the Chancellor of the Exchequer at HM Treasury yesterday will push businesses to the brink, force people into further economic hardship and “send unemployment soaring” across the UK.
Mrs Gibson urged Chancellor Rishi Sunak MP to rethink his plans and instead extend the schemes to prevent firms taking on unmanageable debt or being unable to afford salaries which could lead to mass redundancies, while continuing to assist struggling self-employed workers.
It follows confirmation from the Treasury that it will reduce its 80% salary contribution for workers from 01 September, with companies having to pay pension and National Insurance contributions from 01 August, which are currently funded by the Treasury. This will force businesses to plug the gap, which many cannot afford. Research published by the Institute of Directors revealed that a quarter of employers using the furlough scheme would be unable to afford to make any contribution at all, inevitably leading to redundancies.
The Chancellor will also end the Self-Employment Income Support Scheme with a second and final capped grant in August of up to £6,570.
“The changes announced by the Chancellor to the Job Retention and Self-Employment Income Support Schemes risk pushing businesses to the brink, forcing self-employed people further into hardship and could end up sending unemployment soaring as companies are forced to make mass redundancies or take on unmanageable debt.
“Employees and employers must not be penalised due to the pandemic. Rather than reducing financial support for those impacted, the Chancellor must strengthen it and extend the schemes to secure a strong economic recovery. The alternative will be a deep recession and hardship for many.
"I urge the UK government not to undo the good work done so far to help businesses and employees through these challenging times and instead listen to concerns raised by firms and industry organisations who are calling out for the strengthening and extension of support schemes.
"The Chancellor must also explain how he will mitigate the impact of his plans on sectors like tourism and hospitality, which are particularly vulnerable at this time, not least in my own constituency of North Ayrshire and Isle of Arran"