New entrants to be stopped from joining the jobs furlough scheme

Treasury wants to stop businesses from putting staff on furlough and then immediately taking them off to work part-time from August

Rishi Sunak is to stop new applicants from joining the jobs furlough scheme, in a bid to continue winding the scheme down.

Part-time working from furloughed staff is expected to be allowed from August, following pressure from MPs and retail associations. The government has announced that non-essential shops can reopen from June 15.

However, according to the Financial Times, the chancellor wants to stop new applicants from joining the Coronavirus Job Retention Scheme (CJRS) to stop them from going on furlough and immediately coming back off it to work part-time – leaving the Treasury to pick up the bill.

>See also: Government launches business Coronavirus Job Retention Scheme

Mr Sunak is expected to announce changes to the jobs furlough scheme including asking small businesses to cover 20 per cent of the cost of the CJRS, as well as allowing part-time furlough, by the end of this week.

Currently, 8m people are on furlough, roughly a quarter of the total jobs in Britain.

A quarter of company directors surveyed by the Institute of Directors say they won’t be able to afford to pay even the 20 per cent of the furlough scheme if asked – as well as having to pay national insurance contributions, an additional 5 per cent, on top.

Self-employed scheme extension?

Meanwhile, Rishi Sunak is also mulling whether to extend or curtail the separate furlough scheme for the self-employed. The Self-Employed Income Support Scheme (SEISS), which has cost £10.5bn so far, is due to expire in five days’ time.

>See also: Self-employed Income Support Scheme what it means for you

According to the Telegraph, the self-employed scheme is likely to be extended, rather than pitching the 1.5m people currently claiming it into claiming Universal Credit.

What is known is that the Treasury is considering dropping the cap for earnings under any extension to less than the current £50,000. This means that wealthy self-employed, such as barristers, have been blocked from accessing the Self-Employed Income Support Scheme.

Three quarters of self-employed people receiving a grant are completely reliant on the scheme, meaning that 1.5m workers could be left without any income at all if support is withdrawn, according to Organise, a workers’ support group.

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Tim Adler

Tim Adler is group editor of Small Business, Growth Business and Information Age. He is a former commissioning editor at the Daily Telegraph, who has written for the Financial Times, The Times and the...