As jobs scheme changes...
SMS, Redrow join firms handing back furlough cash
Redrow is the latest to repay cash
Companies are being urged to repay the taxpayer cash they have received for furloughed staff if they feel they can afford to do so.
Scottish company Smart Metering Systems is the latest to announce it is returning the grant received through the Coronavirus Job Retention Scheme.
SMS suspended its installation activities on 22 March as a result of the developing Covid-19 situation and elected to furlough some of its staff
But after resuming activities, “it has emerged from the recent uncertainties with a strong financial position.”, it said in a statement today.
The group’s net cash position of £48m (excluding the grant) at 31 May is ahead of previous expectations and SMS continues to forecast underlying profitability for the year to 31 December to be in line with the board’s earlier expectations.
SMS has therefore taken the decision to return the funds received from the UK Government under the CJRS and has also withdrawn from the scheme.
Housebuilder Redrow yesterday joined a growing number of companies, such as Scottish Sea Farms, Taylor Wimpey, Games Workshop and The Spectator magazine which have already returned payments to the Treasury.
While most firms have seen the job retention scheme as a vital lifeline, some have been robust enough to withstand the impact of the coronavirus lockdown.
Redrow, which had furloughed 1,700 of its 2,300 staff, said its cash flow had proved ‘resilient’ and it no longer needed the support, despite warning of a fall in profits.
Taxpayers’ Alliance spokesman Jeremy Hutton said those repaying money received through the Coronavirus Job Retention Scheme are “doing the right thing”.
He said: “Taxpayers are likely to remember those businesses that pulled out all the stops to help, and those that didn’t.”
The government confirmed that employers had asked how they can return grants voluntarily. It said businesses are under no obligation to do this, but should contact HMRC if they want to pay the grant back.
The scheme has so far helped protect more than 9.3 million jobs through the pandemic, with employers claiming more than £25.5 billion to support wages. It is thought this figure will hit £60bn by the time the scheme ends in October.
Businesses will have the flexibility to bring furloughed employees back to work part time from today, a month earlier than previously announced. Employers will have the flexibility to bring furloughed employees back to work on a part-time basis.
Individual firms will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them – and will be responsible for paying their wages while in work.
Chancellor Rishi Sunak said: “Our number one priority has always been to protect jobs and businesses through this outbreak.
“The furlough scheme, which will have been open for eight months by October, has been a lifeline for millions of people and as our economy reopens we want that support to continue.
“Giving firms the flexibility to bring back furloughed workers on a part-time basis will help them work gradually and help them plan for the months ahead.”
The furlough scheme has been a lifeline for millions of people– Rishi Sunak, Chancellor
From August, the level of government grant provided through the job retention scheme will be slowly tapered to reflect that people will be returning to work.
Businesses will be asked to contribute a modest share, but crucially individuals will continue to receive that 80% of salary covering the time they are unable to work.
More information about the changes can be found here.
Call for scheme extension
The changes in government support come amid new announcements on job losses and calls for an extension to the furlough scheme.
Aviation firm Airbus and the retailers TM Lewin and Harveys furniture are among the latest to announce or warn of job cuts.
Jim McMahon, Labour’s Shadow Transport Secretary, said: “Labour has consistently called for an extension to the furlough in the most impacted industries, and a sectoral deal that supports the whole aviation industry including securing jobs and protecting the supply chain, while continuing to press for higher environmental standards.”
Ahead of the Finance Bill returning to Westminster today, the SNP has called for the UK government to commit to continuing coronavirus support schemes for as long as the economies and public health of all four UK nations require it.
The SNP has tabled an amendment to the Bill that, if passed, would require the UK government to carry out assessments of the economic impact of withdrawing the coronavirus support schemes before two years – saying that withdrawing support prematurely would “put Scotland’s economic recovery at risk.”
Alison Thewlis: ‘do whatever it takes’ (pic: Terry Murden)
SNP Shadow Chancellor Alison Thewliss said: “The Chancellor must live up to his pledge to do whatever it takes to protect people’s jobs and livelihoods – and that means committing to continuing coronavirus support schemes for as long as all four nations in the UK require it and devolving financial powers to Scotland.
“If he will not, he and the rest of the Tory party are putting Scotland’s economic recovery at risk and will leave Scotland tackling the crisis with one hand tied behind its back.
“The coronavirus support schemes have been a lifeline to so many, but if the Tories pull this safety net away prematurely, thousands if not millions could be pushed into untold hardship.
“This is on top of the one million people who have fallen through the gaps in available support and the 14.5 million currently living in poverty in the UK.”