After furlough – why businesses need clarity now

It is clear the furlough scheme has saved many jobs since its launch at the beginning of the pandemic and been a lifeline to many businesses.

However with announcements this week and continued difficult trading for many businesses it is time to think about what needs to be done next when the scheme comes to an end next month.

The Chancellor has already announced the Job Retention Bonus, which will pay businesses £1,000 in January for each previously furloughed employee who returns to work. But, the concern is that this will be too little, too late for many businesses, who need help to keep employees now.

It’s interesting to see the salary top-up schemes used in Germany and France to help and limit unemployment levels.

The German ‘Kurzarbeit’ model allows employers to reduce workers’ hours, with the government paying a percentage of the lost wages, which can be as high as 80% and crucially, the scheme can run for up to 21 months. Similarly, France’s ‘chômage partiel’ lets firms cut employees’ hours by 40% for up to three years, with the government topping-up salaries.

It’s my opinion that the Chancellor needs to look urgently at a similar model for UK businesses, giving employers clarity as soon as possible to enable them to make decisions.

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