Furlough scheme extended until October, changes due in July
The job retention scheme will be extended, for four months, until the end of October, chancellor of the exchequer Rishi Sunak has confirmed.
Addressing the House of Commons, 12 May, chancellor Sunak confirmed that the level of support to employees will not be reduced but did say employers would be asked to contribute more.
The news will bring some relief to events businesses which have seen their incomes completely stop.
He said: “By [October], we will have provided eight months of support to British people and businesses. Until the end of July, there will be no changes to the furlough scheme whatsoever.
From August to October the scheme will continue, for all sectors and regions of the UK, but with greater flexibility to support the transition back to work.
“Employers currently using the scheme will be able to bring furloughed employees back part-time. We will ask employers to start sharing, with the government, the costs of paying people’s salaries.
“Further detail will follow by the end of May but I want to assure people one thing won’t change workers will, through the combined efforts of government and employers, continue to receive the same level of support as they do now, at 80% of their salary, up to £2,500.”
Lex Butler, chair of the Hotel Booking Agents Association, has been one of the most vocal campaigners for the extension of the scheme. Speaking in response to the chancellor's announcement, Butler noted it has saved thousands of jobs. She said: “The extension of the job retention scheme to the end of October, without change until the end of July, will save thousands of jobs in the events, hospitality and travel industry as many staff would have been made redundant at the end of June. The industry would have been decimated.
“Almost half of the HBAA’s agent and venue members who responded to our survey this week said that they would have had to make at least 50 per cent of their staff redundant at the end of June if the scheme had not been extended.
“We’re delighted to hear that from August there will be flexibility and the scheme will allow workers to resume part time to help businesses get going again. This is crucial for our recovery."
However, Butler called for the help to go further, with regards to the Coronavirus Business Interruption Loans Scheme and rates relief, as the events industry will not likely see a profit until 2021. She said: “We welcome this extension wholeheartedly but, as this industry will be one of the last to be trading fully again, not until next year, businesses in the sector will need every assistance to survive – commercial rent relief, support for sole traders and those who take dividends as part of their income, plus the continuation of Business Rates Relief and the Business Interruption Loans Scheme are essential.
"Of course, this extension must go hand-in-hand with noticeable industry recovery, otherwise we will find ourselves in the same situation at the end of the time.
“We want to #GetBritainMeeting, to ensure that the government fully understands what powerful role this £70bn industry plays in the UK economy; and we will continue to work hard with other industry associations to gain the financial support we need for its continued existence.”
Jane Longhurst, chief executive of the Meetings Industry Association, also welcomed the news, which she added has saved 8,402 jobs among members.
“Having highlighted the particular plight of our sector, we are grateful that the government has listened, and from the start of August the scheme will have greater flexibility to allow employers to bring furloughed employees back part-time," Longhurst noted.
“Without the extension, our recent research was predicting 8,402 job losses of skilled and unskilled workers among our 800 mia members alone. We now await further clarity later this month on how employers will start sharing the cost of paying the salaries with the government,” she added.