Chancellor Rishi Sunak outlines new plans for furlough scheme and extends self-employed income support
Chancellor Rishi Sunak has outlined changes to the job retention scheme and self-employed support scheme.
"As we reopen the economy, there is broad consensus that the furlough scheme cannot continue indefinitely", Sunak has said, and that "we will ask employers to start contributing as we open up."
From August, employers will have to make "a modest contribution introduced slowly over the coming months". They will have to provide national insurance contributions and pensions payments for furloughed employees during this month (according to Sunak, this is an average of around 5 per cent of wages).
Beginning in September, employers will then have to contribute 10 per cent of furloughed employee wages, and this will go up to 20 per cent in October.
According to Sunak, "by September employers will have had the chance to change workplace practices – for the final two months they will have to start paying towards wages." After October the scheme will end.
This will be, according to the Chancellor, "a new, more flexible furlough." He unveiled more changes: from 1 July, employers will be able to decide what is best for them and their furloughed staff."
The furlough scheme will, from that date, be able to cover part-time work – for example, if someone works part-time for three days a week then the furlough scheme can cover them for the additional two days.
The scheme will close to new entrants at the end of June, with applications having to be placed by 10 June.
The Self Employment Income Support Scheme (SEISS) will be extended with applications opening in August for a second and final grant. Sunak says: "The second grant will be paid out in a single instalment, with the value of the final grant being either 70 per cent of average earnings or £6570."
He did not address concerns about those who did not meet the criteria for the SEISS.
Those within the arts industry are heavily reliant on such schemes, especially while venues are unable to reopen. All are facing financial peril and the threat of permanent closure.
In response to the statement Equity's general secretary Christine Payne said: "The Chancellor said tonight that resources will now be directed to recovery and that he will 'develop measures to help people thrive in the post-Covid world'.
"I would say in response to this – work with us to develop a plan to protect the creative industries. At the core of a recovery plan for the creative industries there must be an income guarantee for the self-employed and freelance workforce. We cannot hope to return to work in full until the early months of 2021 and this represents a massive threat to the £111bn we contribute to the economy."
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