CBI says firms need clarity on job retention scheme timeline
The head of the CBI has cautioned that employers could end up sacking workers unless the government’s scheme to pay furloughed workers’ wages amid the coronavirus pandemic is extended.
Carolyn Fairbairn said the job retention scheme, under which the government will pay 80 per cent of the wages of workers who would otherwise be sacked, “was one of the best in the world”.
Yet she told BBC Breakfast that its three-month duration meant jobs were at risk if there was no extension.
The CBI has said firms need clarity soon about whether the scheme will continue. This is because employers have to start redundancy proceedings 45 days in advance, meaning there is an effective deadline next week.
“This is quite urgent,” Fairbairn said. She highlighted the risk that some workers could be sacked “unnecessarily”.
Employers can apply for funds at the end of April, which will cover wages from the start of March.
The government expects more than 9m workers to be furloughed through the scheme. Figures from the British Chambers of Commerce have suggested roughly half of UK firms will take part in some way.
The Treasury has always been clear that it will consult on extending the scheme if needs be. But it hopes the economic situation will have improved in three months.
The CBI’s intervention came a day after the Resolution Foundation think tank called on the government to take “further radical policy steps”, amid huge uncertainty over the length of the outbreak.
The Resolution Foundation praised the government’s response so far, which includes £330bn of lending and support for the self-employed.
Yet it said more must be done to ensure the economy recovers from the coronavirus slowdown. It said the government should ensure furloughed workers can return to work part-time if this can be done safely.