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:
Can journalists remind @RishiSunak that before the pandemic the number of people in poverty in working families had hit a record high with millions of families struggling to pay bills & feed their kids. 80% of a poverty wage was bad enough, 60% will leave families to starve
— Peter Stefanovic (@PeterStefanovi2) May 12, 2020
If reports are accurate that Rishi Sunak is about to announce an extension to the furlough scheme but cutting wage support to 60% without employers making up difference it means the government has adopted the basic principle of a time old policy of starving workers back to work.
— John McDonnell MP (@johnmcdonnellMP) May 12, 2020
If Sunak reduces the furlough scheme to 60%, it’s going to cause carnage.
Numerous furloughed workers, like those in hospitality, literally cannot go back to work. What do they do? Starve as employees, or quit for UC?
If rumours are true, it’s an astonishingly moronic decision.
— Evolve Politics (@evolvepolitics) May 12, 2020
Hi @Keir_Starmer
Rishi Sunak is cutting the furlough scheme to 60% of earnings.
Do you support this or do you oppose it?
Be useful to know.
Thanks. https://t.co/NHYWy5Nudy— simon maginn (@simonmaginn) May 12, 2020
https://twitter.com/TheMendozaWoman/status/1260134665018658816
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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