The chancellor has announced a Job Retention Bonus of £1,000 to UK employers for every eligible furloughed employee they bring back to work.
As part of today’s Summer Statement, Rishi Sunak announced a new furlough scheme as he winds down the Coronavirus Job Retention Scheme.
The Job Retention Bonus will provide a £1,000 one-off payment to UK employers for every furloughed employee they bring back and who remain continuously employed until the end of January 2021.
In order to be eligible, employees must earn above the lower earnings limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme (31 October 2020) and the end of January.
Sunak confirmed the bonus payments will be made from February 2021 with further details about the scheme to be announced by the end of this month.
He added that the bonus scheme could potentially cost the exchequer £9.4bn based on the 9.4 million workers who are currently furloughed – a quarter of the workforce. It’s also a means of incentivising employers to keep on their furloughed staff.
The chancellor said: “It is important that people who have been furloughed are supported back to work. It is beneficial for everyone, including the individual, to prevent skills from fading and to maintain strong employment relationships. Therefore, the government is introducing a new Job Retention Bonus to reward and incentivise employers who keep on their furloughed employees.”
It comes as Sunak confirmed 31 October 2020 as the end date for the Coronavirus Job Retention Scheme, adding that over April and May, the number of paid employees has fallen by 612,000, while Universal Credit claims reached 3.4 million between 1 March and 23 June.
He said: “Furlough has been a lifeline for millions, supporting people and businesses to protect jobs. But it cannot and should not go on forever. I know that when furlough ends it will be a difficult moment.
“Leaving the furlough scheme open forever gives people false hope that it will always be possible to return to the jobs they had before.
“And the longer people are on furlough, the more likely it is their skills could fade, and they will find it harder to get new opportunities.”
TUC general secretary Frances O’Grady, said mass unemployment is now the biggest threat facing the UK, as shown by the thousands of job losses at British Airways, Airbus and elsewhere. The government must do far more to stem the rising tide of redundancies.
She said: “The chancellor should have announced targeted support for the hardest-hit sectors like manufacturing and aviation. Struggling businesses will need more than a one-off job retention bonus to survive and save jobs in the long-term.
“Unions campaigned for a job guarantee scheme. Kickstart is a good first step. But if the government allows vital industries to go the wall, unemployment will surge and the recession will last far longer.
“The more people we have in decent work, the faster we can work our way out of recession. We must create jobs through more new public investment in new homes, childcare, faster broadband, better transport and green tech.”
O’Grady added that the government should have announced extra investment in jobs across all public services – starting with filling the 200,000 vacancies in the NHS and social care.
“And if the chancellor wants people to have the confidence to eat out, he should have announced a pay rise for hard-pressed key workers rather than dining out discounts for the well-off,” she said.
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