Coronavirus: Calls for furlough flexibility as businesses count the cost of delayed reopening

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This month marks the beginning of the end for the government-funded scheme – but it comes as some businesses remain closed.

Businesses hoping to reopen after the coronavirus lockdown have been told they will remain closed for now, despite the furlough scheme beginning to wind down.

Bowling alleys, casinos, skating rinks, and beauty salons offering close-contact services like facials, had been scheduled to welcome customers today for the first time since lockdown, while small wedding receptions, and indoor performances were set to resume.

Their doors will stay shut for at least two more weeks after an increase in COVID-19 cases in England.

                              Coronavirus: Calls for furlough flexibility as businesses count the cost of delayed reopening

Under the furlough scheme, the government has covered 80% of staff salaries up to £2,500 each month since March – but that support is due to decrease before the scheme ends in October.

From today, employers must pay national insurance and pension contributions for their employees, as part of a gradual tapering of the scheme.

But despite the uncertainty for those still furloughed, the rising rate of new coronavirus infections has forced the government to delay the reopening of some businesses.

It will cost businesses £70 per employee on average, or five percent of their pre-furloughed pay.

For many sectors still unable to reopen, things are going to become “acutely difficult”, according to the British Chamber of Commerce.

James Martin, Director of Policy at the BCC, said as costs rise and support unwinds a lot more help will be needed “otherwise we are going to see significant redundancies.”

Fewer than 4.5 million people are estimated to be currently furloughed, under the Coronavirus Job retention Scheme, according to the Resolution Foundation.

That is under half of the 9 million originally stated by officials meaning half have already returned to work.

Cherry Woods, a skin clinic owner, is one of those who was hoping to be back at work, having not made any money for more than four months.

She told Sky News: “When we were due to go back on the 1st of August, I was elated and happy and now I just can’t see when we’re going to get an honest date. I’ve given up a little bit of hope really.

“It’s heart-breaking to move an incredibly good, busy working day that I’d been absolutely longing for.

“To just wave goodbye to that day and wait another two weeks, at the earliest, is devastating.”

                              Coronavirus: Calls for furlough flexibility as businesses count the cost of delayed reopening

She added: “I absolutely love what I do. My clients are wonderful and the idea that I’m losing business because of the lack of understanding of this industry is heart-breaking for me.

“By the time I eventually go back, I will not have worked for five months while still paying rent and it’s not cheap. My business has been decimated.”

                              Coronavirus: Calls for furlough flexibility as businesses count the cost of delayed reopening

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Prime Minister Boris Johnson said on Friday that he had to “squeeze the brake pedal” on the easing of restrictions because COVID-19 was becoming more prevalent in the community.

But the Labour Party warned bosses were now facing the “stark choice” of firing staff or paying a “hefty financial burden” to keep them in employment unless the government adopted a more flexible approach to ending the furlough scheme.

Shadow business secretary Ed Miliband said: “Many businesses still have little or no cash coming in, but are trying to do the right thing and save their employees’ jobs.

“They now face the stark choice of letting go of their staff or facing a hefty financial burden to keep them on.

“Businesses in vastly different sectors and circumstances should not be treated in this uniform way, and it is clearly unfair and illogical for those employers still locked down and unable to trade.”

                              Coronavirus: Calls for furlough flexibility as businesses count the cost of delayed reopening

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By the time the scheme ends it will have supported 9.5 million jobs at a cost of £31.7bn over eight months, according to the Treasury.

“We continue to support closed sectors through our targeted package of support that includes tax deferrals and VAT cuts, business rates relief, rent moratoriums and loans. And we will continue to work closely with them during this difficult time,” a spokeswoman said.

Many employers want to see “clarity” on the roadmap between now and Christmas so they can plan ahead.

The British Chamber of Commerce says it wants to have confidence in the test and trace system Too so that the country can “move forward…and finish the restart of the economy”.

On Friday, England’s chief medical officer Chris Whitty warned that the nation had “probably reached near the limit or the limits” of what could safely be done to reopen society, meaning trade-offs may be needed so children can return to school in September.

The requirement to wear a face covering will be extended to indoor settings such as museums, galleries, cinemas and places of worship from 8 August. It is already compulsory in shops and on public transport.

Latest figures show there were 880 laboratory-confirmed cases of coronavirus up to 9am on Friday, bringing the total to 303,181.

On Saturday afternoon the government said a total of 46,193 people had died in hospitals, care homes and the wider community in the UK after testing positive for coronavirus – a rise of 74 in 24 hours.

In the 24 hours to 9am on Saturday morning confirmed cases rose 771 to 303,952.


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