Sunak throws lifeline to self-employed by extending support scheme

Andrew Cummings
May 31, 2020

A survey of nearly 700 company directors found that about half of those using the scheme said they could provide 20 per cent or more towards furloughed workers' full-time salaries between August and October.

Under the plan, workers have been receiving 80 per cent of their wages up to £2,500 a month.

But in the next few months the Government part is set to will reduce down to 60 per cent, and it's expected that employers will be mandated to pay 20 per cent, or 40 per cent if they were topping up wages to their full amount.

One million firms are using the scheme, according to data released this week.

"I have made a decision to ask employers to pay only a modest contribution", said Sunak at the briefing.

By September, employers will be asked to start paying towards people's wages, with taxpayer contribution dropping to 70 per cent of the furlough grant and employers covering 10 per cent. This will rise to 20% in October.

However Prospect warned that businesses that have been closed by government need more direct support from government to avoid redundancies and condemned the failure to plug the gaps in the schemes that leave many freelancers and other workers with no support.

"Now, as we begin to re-open our country and kickstart our economy, these schemes will adjust to ensure those who are able to work can do so, while remaining amongst the most generous in the world".

From 1 July, businesses will be allowed to bring furloughed employees back part-time, a month earlier than previously announced.

Business groups had pressed for the change, as rule-changes mean some sectors can reopen - including non-essential retail on June 15, for example.

Plans for the next phase of the ongoing furlough initiative have been confirmed, as have proposals to extend the Self-Employment Income Support Scheme.

It comes as the latest UK-wide figures show another 324 people have died after testing positive for coronavirus in hospitals and the wider community, bringing the total to 38,161.

Those eligible under the Self-Employment Income Support Scheme (SEISS), which has so far seen 2.3 million claims worth £6.8bn, will be able to claim a second and final grant in August.

"We recognise the need to gradually ease off on the support for sectors which are now reopening, and welcome the measured approach the Chancellor has taken compared to some of the briefings".

The Treasury pays the 80 per cent chunk and employers can choose to top it up with 20 per cent if they want to.

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