Will employers be able to pay Sunak’s furlough demand?

Rishi Sunak: his plans for his furlough scheme are optimistic, to say the least.

These people are mistaken:

But they’re not very far off the mark!

Tory Chancellor Rishi Sunak had said that he would make an announcement about the furlough scheme – in which the government pays 80 per cent of employees’ wages while they are unable to work, in exchange for employers agreeing not to end their contracts – today, May 12.

And he had been expected to say that the government could no longer pay that proportion of wages and would be reducing it to 60 per cent.

Something stopped him.

Was it the argument that John McDonnell put forward – that on top of Boris Johnson’s plan to ease the lockdown, announced on Sunday, this would be an obvious attempt to starve employees back into work, even though they would probably catch the coronavirus there?

Was it the point that many employees simply cannot go back, because their jobs are still not considered safe enough – by the government itself?

Was it the suggestion that cutting down the amount furloughed workers are being paid would turn the coronavirus crisis into the UK’s worst disaster in a century – made that way by the Tories and on their watch?

It won’t have been the thought of tipping more people into poverty; Tories have no problem with that at all.

In This Writer’s view, he was probably persuaded by the thought that too many employees would be adversely affected – and would make this clear in no uncertain terms. Tories are constantly concerned about public relations.

So instead, he has extended the 80 per cent wage payment subsidy to August, with a demand that the government contribution will be reduced from that date and employers will pay into it as well.

He has said nothing about how large the employer contribution will be – meaning all he has done is added more uncertainty to the coronavirus crisis.

And where are the employers going to get the money?

Sure, Sunak said employers would be able to bring furloughed workers back part-time by then – but he cannot guarantee that.

Indeed, considering the lunacy that followed Boris Johnson’s announcement that some people should go back to work from yesterday (May 11), it seems likely that the UK will be well into its second wave of coronavirus infections by then.

And employers have been paying the overheads on property, equipment and so on, for months.

It seems Mr Sunak has made a few highly-optimistic assumptions.

Won’t it be humiliating for this Tory Chancellor if he turns out to have got his sums wrong?

  • I’d like to hear from employers: what do you think of Rishi Sunak’s declaration?

Source: UK furlough scheme extended by four months – BBC News

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