Overview
The Chancellor today announced the upcoming changes to the Government’s flagship Coronavirus Job Retention Scheme, also known as the ‘furlough’ scheme.
Starting from August, employers will be asked to make contributions to the wages of their employees on furlough through employer pension contributions and national insurance. In September, employers will then be asked to pay 10% of the furlough grant, with the taxpayers covering the rest. The employer contribution will raise to 20% in October, with the taxpayer contributing the other 60%.
In terms of flexibility, a ‘flexible’ furlough system will be in place from July. Employers will have the “maximum possible flexibility” to decide on the right arrangements for them and their furloughed staff. For example, an employer could bring back an employee two days per week and pay them as normal, whilst the furlough scheme would cover the other three days.
The scheme will be closed to new entrants on June 30th and then ceased entirely following the month of October. Paul Johnson, Director of the Institute of Fiscal Studies, has predicted that some employees on the furlough scheme will soon find that their roles no longer exist, since the scheme has been subsidising some jobs that are likely to be “non-existent”.
The Self Employed Income Support Scheme was due to end this weekend, with the Chancellor coming under pressure to extend this cut-off, not least from 113 cross-party MPs. In today’s press conference Sunak announced an extension to this scheme alongside the furlough scheme. Applications will open in August for a second and final grant, which will be capped at 70% of 3 months’ worth of profits up to a total of £6,570.
The Chancellor emphasised the importance of looking to the future at the end of today’s statement. He iterated that the focus now was on “planning for the recovery” and that the dynamism of the whole economy will be needed to “fight our way back to prosperity”. He finished by saying “a new national collective effort begins to reopen our country and kickstart our economy”.
The Daily Press Conference
Rishi Sunak, Chancellor of the Exchequer
- 4,043,686 coronavirus tests have now been carried out in the UK, an increase of 131,458 on yesterday.
- 271,222 people have so far tested positive for coronavirus an increase 2,095 on yesterday.
- 38,161 people have died from coronavirus across all settings, an increase of 324 on yesterday.
- We are passed the peak and flattening the curve. We can now take steps to reopen the economy. As Britain returns to work, we now need to adapt emergency programmes.
- The furlough scheme cannot continue indefinitely.
- Employers must now contribute alongside the taxpayer towards the wages of their staff.
- In June and July, the scheme will continue as before with no employer contribution.
- In August, the taxpayer contribution will stay at 80%, employers will only be asked to pay national insurance and employer pension contributions; this accounts for 5% of total employment costs on average.
- In September, taxpayers will contribute 70% of the furlough grant, with employers contributing 10%.
- In October, taxpayers will contribute 60% of the furlough grant, with employers contributing 20%.
- After October, the scheme will close.
- A new, more flexible furlough is being introduced. People want to work.
- The flexible furlough will be in place from July.
- Employers will have the “maximum possible flexibility” to decide on the right arrangements for them and their furloughed staff. For example, an employer could bring back an employee two days per week and pay them as normal, whilst the furlough scheme would cover the other three days.
- The furlough scheme will be closed to new entrants on June 30th. Employers must place employees on the scheme by June 10th, to allow employees to complete the minimum period before then.
- The Self Employed Income Support Scheme will be extended, with applications opening in August for a second and final grant.
- The grant will work in the same way as the first did – paid out in a single instalment and covering 3 months’ worth of average monthly profits.
- The value of the grant will be 70% of this up to a total of £6,570.
- No one has been forgotten. We have provided a wide range of support. Now our thoughts turn to looking forward and planning for the recovery. We will need the dynamism of the whole economy to “fight our way back to prosperity”.
- We will develop new measures to back the economy, support business, boost skills in the post-covid world.
- A new national collective effort begins to reopen our country and kickstart our economy.
Professor Stephen Powis, National Medical Director of NHS England
- From 24-27 May in Great Britain:
- 88% of adults avoided contact with vulnerable people.
- 98% of adults tried to stay 2 metres away from those outside their household.
- 29% of adults used a face covering when outside.
- 39% of employed adults worked from home, compared to 12% last year.
- On 27 May in England there were 552 Covid-19 hospital admissions, down from 713 on 20 May.
- On 28 May in the UK 10% of mechanical ventilator beds were occupied with Covid-19 patients, down from 13% on 21 May.
- In the UK, 8,287 people are in hospital with Covid-19, down from 9,397 this time last week. There are steady declines in this through the UK, the most dramatic in London.
- ONS has reported 45,213 cumulative deaths in the UK from Covid-19, this figure includes deaths from those who weren’t confirmed to have Covid-19.
Government Activity
- Schools reopening. Sheffield City Council has become the latest local authority to tell its schools and nurseries not to reopen on Monday. It has advised schools to delay reopening until 15 June. This follows the Prime Minister’s comments yesterday that schools would not have to open until they felt prepared. The Downing Street spokesperson suggested that headteachers will have a large degree of responsibility around asking teachers to come back to schools.
- Track and Trace. Some contact tracers have again reported technical difficulties on the second day of the scheme. The programme was also hit by IT problems when it launched yesterday.
- High Street code of conduct. The Ministry of Housing, Communities & Local Government have announced that they are working with industry to develop a code of conduct which will provide businesses and landlords with clarity and reassurance over rent payments. The code is being designed to be temporary and the Government will explore options to make it mandatory if necessary.
- Cop26. The Cop26 climate conference, which was due to be held in Glasgow in November, has been delayed. The conference will now take place between 1 and 12 November 2021 in Glasgow.
- Local Authority Discretionary Grants Fund. Small businesses, such as those that pay a proportion of their business rates to their landlord, are not eligible for other grant schemes. They can now apply to this fund for grants of up to £25k to support their business.
- Mental health. The Department of Health and Social Care has announced a £5m investment fund to expand mental health support from community projects. Organisations to benefit from this funding include Mind, Ambitious about Autism, and Campaign Against Living Miserably.
- China. Lucy Fisher, The Times’ Defence Editor, has reported that the Government wishes to build an alliance of democracies against China to create alternative 5G suppliers – “The government has approached Washington about a ‘D10’ club of democratic partners, based on the G7 plus Australia, South Korea and India”.
Devolved Governments:
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- Scotland. Scottish First Minister Nicola Sturgeon urged “caution” over Scotland’s relaxing of lockdown restrictions. People in Scotland can now meet those from other households outdoors, but should not “change behaviour a bit more than these changes are designed to allow”.
- Wales. From Monday, two households in the same local area will be able to meet outdoors, provided social distancing practices are observed. In line with Scottish advice, household meetups must be local, with people generally travelling no more than 5 miles from their homes.
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- Northern Ireland. Economy Minister Diane Dodds has published a plan for economic recovery titled “Charting a course for the economy: our first steps”.
Parliamentary Activity
- Self Employed Income Support Scheme. A cross-party group of 113 MPs, including several Conservatives, have signed a letter urging the Chancellor to extend support for the self-employed. The Self Employed Income Support Scheme had been due to end this weekend.
- Coronavirus Act report. The Department of Health has released the first two-monthly report which clarifies which powers in the Coronavirus Act 2020 are currently active.
- Shielding MPs. Robert Halfon, a senior Conservative MP and Chair of the Education Committee, has criticised the prospect of all MPs being asked to return to the House of Commons in person as “democratically unjust”. MPs who are self-isolating, shielding or sick will become the “metaphorical equivalent of Parliamentary Eunuchs” if provisions aren’t made to allow them to contribute to Parliamentary democracy without being physically present.
Health Updates
- A subgroup of SAGE has reported that in April only half of people who developed coronavirus symptoms in England were self-isolating for at least a week.
- Professor John Edmunds, who attends the SAGE meetings which support the Government, has said that the Government is “taking some risk” by relaxing lockdown measures while coronavirus transmission remains “relatively high”.
- The Prime Minister’s spokesperson has confirmed that the Government is confident of reaching its 200,000-a-day testing target by the start of June.
- Former Health Secretary Jeremy Hunt has called on the Prime Minister to make coronavirus testing more efficient.
- The Chief Executive of Care England, Professor Martin Green, has warned that the Test and Trace scheme could leave care homes short of staff due to staff members having to self-isolate.
- Dozens of healthcare charities have warned that millions of vulnerable and extremely vulnerable people are getting “mixed and confused messages” about the easing of shielding measures, potentially putting their health and safety at serious risk.
- Public Health England have published advice for people who are smoking or vaping during the coronavirus outbreak.
- The Chinese firm Sinovac has told Sky News that they are 99% sure that a Covid-19 vaccine that they are working on will be effective. They are in talks to hold stage 3 trials in the UK.
- The first hospital dedicated to helping coronavirus patients recover from the long-term effects of the illness has received its first patients. Surrey’s NHS Seacole Centre opened earlier this month and will begin treating patients recovering from coronavirus from today.
- ONS data shows that, from 21 May to 24 May, 90% of adults left their house for any reason (up 4%) and 29% of adults felt unsafe when outside their homes (down 12%).