Dear Rishi Sunak,
Dear Rishi Sunak,
At present, your job retention scheme promises to pay up to 80% of the wages of ‘furloughed workers’ through a government grant. Under these rules, furloughed workers must not undertake any activities for their employer, and the company can then claim back up to £2,500 per staff member.
I understand that this means many workers who would otherwise be laid off can remain on the payroll for the foreseeable future. This move is to be applauded.
However, I would like you to consider adding a second option to the job retention scheme, paying £1,000 per retained worker that is kept in employment.
My company, BigChange, now employs 170 people. We want to think beyond the short-term and be ready for the upturn at the end of this crisis.
We are a virtual company, meaning that everyone can work from home if required. I feel that companies like mine are being encouraged to furlough workers, in order to cut costs, rather than being encouraged to trade through this difficult time.
Business owners who don’t want to go down to a skeleton crew are effectively being financially penalised.
If there were a second option, which paid £1,000 per worker, companies would not only be incentivised to keep all their staff, they would also be encouraged to keep trading, minimising the impact on the economy in the long-term.
The ‘furloughed worker’ scheme potentially leaves hundreds of thousands of people sitting at home doing nothing. I believe this is terrible for mental health and morale. We cope far better when we are busy and have purpose.
I fear for young people, especially those in isolation right now, who may just stare at their mobile phones all day.
The current job retention scheme also makes no provision for new starters, who may have accepted a job offer and given notice at their previous company and are now in limbo. Almost 1 in 10 UK workers will change job each year, according to the Office for National Statistics, which means that as many as 200,000 people are currently between jobs, facing an uncertain future.
What will happen to holiday allowances? Presumably furloughed workers will still be entitled to paid holiday, which could mean many companies are stuck later in the year, when these workers all try to take vacation at once.
The finer details of this scheme, such as how and when companies will be able to claim, have yet to be published. While it is still in the early stages, please consider adding this second option. Think of the businesses that would be better off not furloughing anyone, and trading virtually at this time, albeit in a very difficult trading environment.
Business and the economy is not the priority. Saving lives and protecting the vulnerable and elderly are the most important things to focus on right now. But we will come out of the other side of this crisis one day. The majority of people should come through this and they will need jobs when it’s over.
Non-Executive Director, Business Angel, Mentor and Strategy Advisor
4 年It’s a great initiative for all the right reasons, but would disadvantage those businesses that have been forced to close through legislation who don’t want to furlough workers but have no choice, a lot of them micro businesses. How about maintaining the current scheme allowing companies to furlough staff but paying the £1000 to those companies who second their staff to “key roles”. They then get the 80% plus £1000 for allowing staff to work on a supermarket check out, or keeping council services going etc. I’m sure there’s a flaw somewhere which will be pointed out to me, and I do have sympathy with HMG because there will never be a catch all solution. The best that can be done is to try and help most of the population most of the time. Stay safe and well Martin
Designing and Building Pressure Vessels and Air receivers for some excellent customers!
4 年A very sensible proposal Martin Port lets hope someone is listening Carlo Gibbs, Katharine Barney Harshbir Sangha MBE
CEO at Touchstar Plc
4 年EXCELLENT LETTER, Martin. Keep and stay safe
Chief Executive Officer at SleepCogni
4 年It should of been made to support 80% of all employees wages, including more skilled workers on + £25k too, no matter if they answer the odd email or task. No time for politics and games here.
Leading Expert in Health Insurance, Life Insurance & Employee Benefits | Driving Client Centric Solutions | 26+yrs experience | Personal, Independent service for SME businesses & Individuals | 98% client retention rate
4 年Well said Martin!