Chancellor says there will be "no cliff-edge" to JRS

By James McAllister

- Last updated on GMT

Chancellor says there will be "no cliff-edge" to Coronavirus Job Retention Scheme

Related tags: Coronavirus, Job Retention Scheme, Restaurant, Hospitality, Government

The Chancellor, Rishi Sunak, has sought to reassure businesses by saying there will be “no cliff-edge” to the Coronavirus Job Retention Scheme (JRS).

However, speaking on ITV News​ last night (4 May), the Chancellor said he was preparing to phase out the scheme as the economy begins to unlock.

The JRS, which was first announced in March, allows employers to claim for a cash grant of up to 80% of a furloughed employee's wages, capped at £2,500 a month. 

Initially the scheme was scheduled to be open for three months; backdated from the 1 March, and lasting until the end of May. 

It has since been extended to run until the end of June, and the Chancellor has faced mounting pressure in recent days to prolong it further or risk mass redundancies across various sectors, including hospitality. 

On ITV news​, the Chancellor said: "To anyone anxious about this I want to reassure them that there will be no cliff-edge to the furlough scheme.

"I’m working, as we speak, to figure out the most effective way to wind down the scheme and to ease people back into work in a measured way.”

There have been various calls made, both within and outside the industry, for the Chancellor to extend and amend the JRS specifically for hospitality, to help the industry as it attempts to recover in the months ahead.

On Friday (1 May), a group of 85 Tory backbenchers led by Anthony Mangnall MP, wrote a letter to the Chancellor calling for a specific support package for the sector​ ​to be delivered. 

The letter asks for the Chancellor to consider an extension to the JRS beyond the end of the lockdown, to provide further protection for jobs in the longterm; and suggests he adapt the conditions so that businesses can ‘flexi-furlough’ staff.

Under the current JRS, employees on furlough cannot undertake work for, or on behalf the employer that has furloughed them.

London Union’s Jonathan Downey, who has been a leading voice for the industry throughout the Coronavirus crisis, has suggested the Government could extend the JRS for hospitality and leisure businesses until the end of the year​, but covering a reduced percentage of an employee’s wage. 

In July and August it could cover 60%; in September and October, 40%; and in November and December, 20%.

“It’s clear that more and more hospitality employees will be going back to work soon; especially those working in takeaways, grab and go, fast casual, and QSR,” he said last week. 

“But for many others it will be many months before there is any possibility of a profitable reopening. 

“The issue we need to contend with is the cost of the JRS, and how long can the taxpayer sustain it.”

Related topics: Business

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