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Five furlough scheme alternatives Rishi Sunak may be considering to help protect jobs


CHANCELLOR Rishi Sunak is facing mounting pressure to explain his plans to protect workers amid tighter lockdown restrictions. 

With the furlough scheme set to end on October 31 he has been warned by employers and trade unions that if he doesn’t step in, over a million jobs could be at risk.

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Chancellor Rishi Sunak is set to reveal his Winter Economy Plan today

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Chancellor Rishi Sunak is set to reveal his Winter Economy Plan todayCredit: AFP or licensors

Mr Sunak will update MPs on his plan to “continue protecting jobs” this afternoon as part of his Winter Economy Plan.

Yesterday, Prime Minister Boris Johnson confirmed the government will replace furlough with “creative and imaginative schemes”.

The furlough programme has cost almost £40billion up to September 20, and has supported more than 10million people unable to work.

But what options could he be considering? We explain how some of the rumoured options would work. 

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German-style wage top-up scheme 

The Treasury is reportedly looking at whether it can subsidise the wages of employees who can work at least 50% to 60% of their normal hours.

The plan to subsidise wages would be similar to a wage subsidy scheme in Germany, where the government pays at least 60% of wages for the time an employee isn’t working.

Employers then pay staff for the rest of their usual hours if they are worked.

Wage subsidies until November 2021 

Another proposal would be to support part of wages for staff only working half their hours. 

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The new “short-time” working scheme would launch on November 1 and last for a year. 

This alternative would see businesses pay 100% of wages for the hours worked. 

While two-thirds of non-worked hours would be paid for by the government and employer combined and the employee would lose a third of their wages. 

The attraction of this scheme is that it would help keep people in jobs and support viable businesses. 

The plans were submitted to Mr Sunak by the The Confederation of British Industry (CBI), according to The Times

Job protection and upskilling scheme 

At the start of the month the Trades Unions Congress (TUC), who helped Mr Sunak draft the original furlough scheme, laid out their suggestions for the furlough replacement. 

It called on the Chancellor to make help available to all businesses – but with more targeted support.

It suggested paying up to 70% of wages for hours workers could not work, but only if the business has been affected by coronavirus restrictions. 

They would also like businesses to bring back workers part-time, except if they were in a local lockdown area or are shielding. 

Workers would get up to 80% of wages, presumably with businesses paying to plug the gap, up to a maximum of £2,500 a month. 

It also urged the Chancellor to help minimum wage workers, meaning their wages should not fall below the legal limit for their normal hours. 

While self-employed people who missed out on previous support should be included in the new plan. 

It also suggested that those who were unable to return to non-working hours should be able to learn skills they may need for jobs in the future. 

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It proposed a scheme where anyone working less than 50% of their normal hours could get funded training. 

Furloughed staff paid to work part-time with wage subsidies 

Earlier this week, Labour’s shadow chancellor, Anneliese Dodds called on Mr Sunah to pay furloughed staff to work part time by subsidising wages as part of a Job Recovery Scheme. 

It would enable businesses in key sectors to bring pack more staff on reduced hours, with the government subsidising a proportion of wages for the rest of the working week. 

It would reward employers who give people work rather than cutting jobs. 

She also called for a national retraining strategy to help people “increase their skills or retrain in a new area”, as well as a funding scheme to help viable businesses that are struggling. 

Targeted extensions to the scheme to help hardest-hit businesses 

Undoubtedly those working in hospitality sectors such as pubs, restaurants and nightclubs have been worst hit. 

Trade bodies, including the British Beer and Pub Association, the British Institute of Innkeeping and UKHospitality have called on the Chancellor to support the pub ad hospitality sector. 

Earlier this month, the Commons Treasury committee urged Mr Sunak to come up with a plan to help those worst affected. 

But crucially they warned that it should be targeted to help viable businesses. 

The Tory MP boss of the Treasury committee Mel Stride said: “The Chancellor should carefully consider targeted extensions to the Coronavirus Job Retention Scheme and explain his conclusions.

“The key will be assisting those businesses who, with additional support, can come through the crisis as sustainable enterprises, rather than focusing on those that will unfortunately just not be viable in the changed post-crisis economy.

“This requires a very difficult set of judgements; it is where careful analysis and creative thinking will be critical.”

Boris Johnson promises ‘creative and imaginative schemes’ when Rishi Sunak ends coronavirus furlough cash





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