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Coronavirus Job Retention Scheme

Treasury – in the House of Commons on 18th May 2020.

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Photo of Mary Glindon Mary Glindon Opposition Whip (Commons)

What plans he has to extend the scope of the coronavirus job retention scheme.

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

As I announced last week, the coronavirus job retention scheme has been extended by four months until the end of October.

Photo of Mary Glindon Mary Glindon Opposition Whip (Commons)

New starters not registered with HMRC before 19 March and agency staff workers are some of those who currently find they are in limbo when it comes to accessing the job retention scheme. What more can the Chancellor do to help these workers now facing hardship?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

When I announced the scheme, we said that those who were on real time information and had notified HMRC on 28 February would be eligible. That covers 29.5 million workers in this country. We found a way to extend that to 19 March—the day before the announcement was made. That protects the taxpayer against fraud and enables as many of those people to be included as possible. It brought another 230,000 people into the scheme. It is important to remember that this scheme now covers close to 30 million workers. As of the end of last week, 8 million people from about 1 million businesses are covered by the scheme and having their wages paid by the Government to protect their jobs and their future security.

Photo of Mel Stride Mel Stride Chair, Treasury Committee, Chair, Treasury Committee

Thank you, Mr Speaker.

The future fund will provide venture capital-backed businesses with vital support, but of course it excludes investments made through the enterprise investment scheme and the seed enterprise investment scheme. It is certainly the case that there is significant public subsidy within those two schemes. However, businesses supported by them still face the challenges of the virus and, where successful, still go on to generate significant numbers of jobs. Will my right hon. Friend therefore take a second look at the qualification requirements for the future fund to see whether EIS and SEIS might be accommodated in some way?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

As my right hon. Friend will know well, EIS is a notified EU state aid, and that is what presents the challenge to providing EIS relief for convertible loan instruments into the future fund. That said, guidance was published today, and the fund will be open for applications on Wednesday. I have been crystal clear that should applications exceed the initial £250 million provided, I will be more than happy to expand the scheme. I think this will be a vital part of fuelling our recovery, because, as he said, these companies provide the growth of tomorrow and they deserve our support.

Photo of Anneliese Dodds Anneliese Dodds Shadow Chancellor of the Exchequer

Labour supported the introduction of the furlough scheme, and we have consistently called for it to become more flexible. We recognise that it cannot persist forever. However, according to press reports, the Treasury is considering asking all employers to pay 40% of employee wages on the JRS from 1 August, which risks a massive spike in job losses.

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

As I think the shadow Chancellor has acknowledged previously, we are in deep consultation with both unions and business groups to ensure that we get the design right for the second part of this scheme. It is right both for the economy and, indeed, for the taxpayer to ask employers to make a contribution to paying the wages of their employees. They will have the benefit of flexibility in furloughing to help offset that. I cannot comment now on this, but I did say that details will be provided by the end of the month.

Photo of Anneliese Dodds Anneliese Dodds Shadow Chancellor of the Exchequer

I appreciate the Chancellor’s comments, but we really need clarity around whether he is considering evidence from other countries, which, in many cases, are calibrating changes to their salary backfill schemes with the lifting of the lockdown. Is he looking at that evidence, particularly on the potential impact of unemployment, or is he only looking at potentially the introduction of a uniform contribution from 1 August?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

As I said, there will be details at the end of the month, but the hon. Lady can rest assured that I speak regularly with my counterparts in countries across the world to learn from their experience and will make sure that our scheme continues to be one of the most generous, comprehensive and effective anywhere in the world.