Chancellor hints at furlough replacement options

Rishi Sunak has hinted at a replacement for the government’s staff furlough scheme.

Employers’ National Insurance contributions and business rates could both be cut as the chancellor considers “creative” ways to help firms beyond the end of the furlough initiative.

He pledged to “find ways of effectively helping people” when the Treasury stops paying the wages of furloughed workers next month.

Sunak ruled out an “endless extension” of the scheme, but said the government would do “everything we can” to boost consumer confidence, which he described as “our greatest currency”.

He is reported by The Telegraph to be studying plans for a limited extension of the business rates holiday, which applies to the retail, hospitality and leisure industry and runs until the end of this financial year.

Business leaders have also asked the government to consider a cut to employers’ National Insurance contributions to reduce the cost of employing staff.

Today is the last day firms can give employees the required 45-day notice period if they intend to make 100 or more proposed redundancies at the end of the furlough period.

The Unite union issued a plea for support for sectors including manufacturing, aviation infrastructure and aerospace, and hospitality.

Unite general secretary Len McCluskey said in a letter to prime minister Boris Johnson: “With our competitor nations announcing the extension or modification of their jobs retention schemes, we ask that your government recognises the need for UK businesses and workers to receive similar support.”

Labour leader Sir Keir Starmer called for “new targeted support” to replace the furlough scheme for sectors most in need such as retail, hospitality, aviation and those hit by lockdown.

Sunak told a Cabinet meeting that consumer confidence was key to an economic revival.

“We are an economy driven by consumer spending, so consumer confidence is crucial in driving our recovery and we should be doing everything we can to boost that,” he reportedly said.

Helping people get back into work or finding new jobs was his “number one priority”, but in a reference to the furlough scheme he added: “Indefinitely keeping people out of work is not the answer.”

More than half of those furloughed since May returned to work by mid-August, according to new data published by the Office for National Statistics.

By the time the scheme closes, it will have been open for eight months, with support continuing in the form of the £1,000 Job Retention Bonus which starts in November and supports the wages of staff brought back to work.

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