Government extends original furlough scheme during lockdown

The Government has announced that the original furlough scheme at 80% of current salary will be extended to cover the national lockdown period in England.

The Coronavirus Job Retention Scheme (CJRS) – also known as the furlough scheme – will be extended and will cover 80% of current salary for hours not worked, up to a maximum of £2,500. Under the extended scheme, the cost for employers of retaining workers will be reduced compared to the current scheme, which ends today and for which the Government had reduced its contribution to 60% in October.

Businesses will have flexibility to bring furloughed employees back to work on a part-time basis or furlough them full time and will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs.

The Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends.

Mortgage holidays will also no longer end. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six-month holiday and those who have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file. The FCA will announce further information on Monday.

In addition, business premises forced to close in England are to receive grants worth up to £3,000 per month under the Local Restrictions Support Grant. Also, £1.1bn is being given to Local Authorities, distributed on the basis of £20 per head, for one-off payments to enable them to support businesses more broadly.

Businesses required to close in England due to local or national restrictions will be eligible for the following:

• For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
• For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
• For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.

Response

Childcare campaigners have welcomed the fact that childcare will stay open, but have called for extra protection and resources, fearing parents will keep their children away. Neil Leitch, chief executive of the Early Years Alliance, said for childcare to remain open, the Government needs to secure long term funding for the sector and “must ensure that all providers have priority access to Covid testing, including home tests; affordable access to PPE; and support with the costs of keeping their settings as clean as possible.”

On the schools front, the National Education Union which represents a large number of teachers has called for schools to be closed except for vulnerable children and the children of key workers, citing fast rising figures of infection in schools, particularly secondary schools.

Kevin Courtney, Joint General Secretary of the National Education Union said: “It is clear from ONS data that schools are an engine for virus transmission. It would be self-defeating for the Government to impose a national lockdown, whilst ignoring the role of schools as a major contributor to the spread of the virus.”

Meanwhile, Generation Rent says the lockdown will affect more than 340,000 private renters, adding to the numbers of people who cannot cover their rent because of what it claims are inadequate housing benefit levels. It is calling on the Government to raise Local Housing Allowance to cover the median rent [the cap on housing benefit only covers rent on the cheapest 30% of private rented homes in a local area] so that families do not get into debt and to set up a fund to clear the debts of renters who have already got into serious arrears by compensating landlords up to 80% of the rent owed.

Moreover, as concerns mount about rising unemployment over the winter, a cross-party group of 500 MPs, peers and local councillors has called on the Government to allow local authorities to run universal basic income (UBI) trials. One UBI option would be to launch an initial £48 a week payment, although critics of the system argue that a UBI would be too expensive to operate or would discourage people from finding work. A new report for the Royal Society for the Arts, Manufactures and Commerce finds just 16% of the British public in a poll of 2,000 adults would oppose a basic income pilot in their area, while 46% would support one.

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