There had been growing calls from parts of Government, as well as the leisure, hospitality and tourism sector, to simply extend the furlough scheme beyond October, which is where we have now ended up.
The JSS had not even started (and commences from 1 November), but the Chancellor has now had to announce an expanded version of it, which suggests a lack of foresight from those involved.
The Chancellor has not got much wrong in his actions during the Coronavirus pandemic, but today’s announcement is an acknowledgement that he should have acted sooner with a revised furlough scheme when it was clear a few weeks ago that lockdown measures would need to be tightened.
The JSS was announced as part of the Chancellor’s Winter Economy Plan just over two weeks ago and was due to start from 1 November, when the existing furlough scheme ended. There has been a stubbornness and insistence from the Chancellor that the furlough scheme had to end. It would appear that Rishi Sunak has had to backtrack somewhat.
This is a re-worked version of the Job Retention Scheme, whereby by the Government will pay up to two thirds of an employee’s salary who cannot work, up to £2,100 a month. This is actually much more generous than the version of the JSS announced in the Chancellor’s Winter Economy Plan, although it can only be claimed by those eligible businesses who are forced to close because of new Coronavirus lockdown measures.
In fact, today’s scheme is financially more generous than the present furlough scheme, which pays 60% of the employee’s salary up to £1,875 a month.
It is positive that the new scheme will run for six months, giving businesses a degree of certainty they have always wanted. Many businesses questioned how useful the JSS would be in reality, and the cost to businesses of employing workers under the JSS was relatively high when compared to the time they work.