Calls for 'flexibility' as furlough wind-down begins and some firms remain closed

Suban Abdulla
·4-min read
Employers will have to start paying national insurance and pension contributions for furloughed staff
Employers will have to start paying national insurance and pension contributions for furloughed staff. Photo: Getty

Businesses expecting to reopen in England have been told to keep their doors shut by prime minister Boris Johnson on the day the furlough scheme preventing job losses begins winding down.

Skating rinks, casinos, bowling alleys and other leisure venues were scheduled to welcome customers on Saturday for the first time since the coronavirus lockdown, while small wedding receptions and indoor performances were set to resume.

But the PM announced on Friday, that measures to reopen would be delayed for “at least a fortnight” due to a rise in COVID-19 cases and to “control the spread of the virus.”

From Saturday, employers will have to pay national insurance contributions (NICs) and pension contributions for furloughed staff.

READ MORE: COVID-19: Employers who laid off workers after furlough may have to return cash

The percentage of employee wages paid through the government’s Job Retention Scheme to furloughed staff will also be reduced in stages, from next month.

Employers will also have to take on an increasing proportion of pay for furloughed staff, from Saturday.

Beauty salons, which were previously allowed to reopen on 13 July, but only for treatments other than the face such as leg waxing and manicures, were also affected by the changes.

The PM’s announcement has curbed the relaxation of the restrictions on Saturday to allow for facial treatments, potentially forcing staff back on the furlough scheme after months of waiting to re-open.

Labour’s shadow business secretary Ed Miliband said ministers will be culpable for thousands of workers losing their livelihoods if they “do not abandon the blanket withdrawal and recognise the scale of the “jobs crisis.”

“Many businesses still have little or no cash coming in, but are trying to do the right thing and save their employees’ jobs.

“Businesses in vastly different sectors and circumstances should not be treated in this uniform way, and it is clearly unfair and illogical for those employers still locked down and unable to trade.”

READ MORE: 1.4 million on furlough may not get jobs back

Other scheduled re-openings across England on Saturday, such as indoor performances and pilots of larger gatherings in sports venues and conference centres, are also delayed.

Johnson also strengthened precautions by making face coverings mandatory in indoor settings such as museums, galleries, cinemas and places of worship from 8 August.

Federation of Small Businesses (FSB) national chairman Mike Cherry said: “It’s great that more small businesses in England can finally open their doors after months of no revenue coming in.”

“Further targeted support for those having to remain shut is urgently needed, especially in areas where local lockdowns are in place, as is help for the hundreds and thousands of people – including company directors and the newly self-employed – who have received no support at all for more than 130 days.”

The Labour party warned that bosses were left with the “stark choice” of laying off staff or paying the “hefty financial burden” of keeping them in employment unless the government adopts a more flexible approach.

READ MORE: Coronavirus: ‘Desperate’ small businesses withdraw £22bn savings to stay afloat

Firms in England that hire an apprentice aged between 16 and 24 between now and January 2021 will also receive £2,000 ($2,617), whereas those who hire apprentices above the age of 25 will receive £1,500, under the scheme.

Under the new rules members of two different households are also banned from mixing in pubs, restaurants and other hospitality venues, but these businesses will remain open for those visiting individually or from the same household.

The furlough scheme still supports millions of workers, with much of the night-time economy also still closed and local lockdown measures imposing restrictions on businesses.

Research by The Resolution Foundation, suggests that the peak number of furloughed workers was almost eight million in late April.

The furlough scheme begins tapering off with NICs before firms start contributing 10% of furloughed staffs’ salaries from September, rising to 20% in October.

The Treasury said the “unprecedented” jobs scheme will have run for a total of eight months, supporting a total of 9.5 million jobs at a cost of £31.7bn.