‘People without work feel ladder has been pulled up’, says Cambridgeshire Chambers of Commerce of Job Support Scheme
The additional support the government is offering businesses and their workforces after furlough starts tomorrow (October 1), but the new Job Support Scheme makes it “much more cost-effective to have one person full-time in a post rather then three people part-time on the scheme”, according to Cambridgeshire Chambers of Commerce members.
The Job Support Scheme, part of the Winter Economy Plan outlined by chancellor Rishi Sunak, is designed to protect viable jobs in businesses facing lower demand over the winter months due to Covid-19. The scheme begins on November 1 and runs for six months. The scheme means the company will continue to pay its employee for time worked, but the cost of hours not worked will be split between the employer, the Government (through wage support) and the employee (through a wage reduction), and the employee will keep their job.
“The essence of it is that a company will receive 22 per cent of the cost of an employee’s wages, but that’s if they work 33 per cent of the time - if they only work 70 per cent of their original hours then the company only recovers 10 per cent of the employment,” John Bridge, chief executive of the Cambridgeshire Chambers of Commerce .
Mr Bridge also pointed out that the new initiative turns previous policy on its head.
“We agree that it’s better to subsidise people for working instead of, as previously, for not working, but several businesses have said to me that it’s much more cost-effective to have one person full-time in a post rather then three people part-time on the scheme,” Mr Bridge said. “But people without work feel the ladder has been pulled up behind them and the fear is that a lot of people will be left redundant.
“Some companies are managing but then there’s those who have been restricted from operating by the guidelines the government has brought in.
“The real problem is inconsistency, with messages of go home, come back to work, go home... even Secretaries of State have trouble understanding it, whether you can queue for food at a takeaway or not, for instance. And just when we think we understand it, there’s something new we hadn’t fully realised.”
One of the components that has characterised the pandemic is the government’s selection of which companies can trade and which can’t, and those left out - for instance the events sector, or football matches - are facing another six months of clicking their heels.
The situation could spell disaster for some businesses, says Tony Murdock, managing director of TR Global Events.
“I think really the scheme on the face of it seems okay – if you are a trading industry. You will have money coming in so can cover the commitment of 55 per cent of the employee wages.
“The government has made it clear we are not a viable industry, yet the £84bn sector contributes to the economy in 2019, which suggests otherwise.
“Events companies are not allowed to trade by the government, which has banned them - therefore no revenue will be coming in for the next six months. With many events companies being SMEs, how does the government expect us to pay staff when we are not allowed to operate? Business meetings for up 30 are allowed, but tighter restrictions will affect consumer confidence and offer very little money for a company like ours, for example.
“The government needs to look at the events industry as a whole, not just the live events they keep speaking of - football, theatres. Targeted assistance is needed both in terms of keeping the furlough scheme going and also financial aid, as without this thousands will lose their jobs and many businesses, including venues, will close.”
“The fact that pubs are full, everyone else is operating and we are banned just doesn’t make any sense. We are seven months in to this crisis, with another six to go: this will be a catastrophe for the events industry and everyone in it and around it.”
The government, as part of its Winter Economy Plan, is also continuing its support for millions of self-employed individuals by extending the Self Employment Income Support Scheme Grant (SEISS).
An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus. The initial lump sum will cover three months’ worth of profits for the period from November to the end of January next year. This is worth 20 per cent of average monthly profits, up to a total of £1,875. An additional second grant, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from February 2021 to the end of April.
“It’s not the pancea for all ills,” concluded Mr Bridge of the new arrangements. “That will only be eliminating Covid-19.”
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Chancellor Rishi Sunak unveils Job Support Scheme to help top up wages once furlough ends
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