Coronavirus Job Retention Scheme extension requested by MPs
Jo Gallacher, September 11, 2020
MPs have asked chancellor Rishi Sunak to consider a targeted extension of the Coronavirus Job Retention Scheme (CJRS) to avoid mass unemployment.
In a new report published Friday 11 September by the Treasury Select Committee, MPs argued that businesses in many sectors will only have a viable future if they are supported by their owners or taxpayers once the CJRS ends next month.
It warned that rising unemployment was a structural and permanent critical risk arising from the crisis, and stressed the importance of effectively targeting assistance to those businesses and individuals who need it.
In July, government announced its Job Retention Bonus which will give £1,000 to all businesses for each employee kept on to January 2021.
However the committee questioned whether this was value for money, as it predicted companies which had always intended to bring their workers back post-furlough will take advantage of the scheme.
HR's perspective on the UK government's pandemic interventions:
Mel Stride, chair of the Treasury Committee, said: “The chancellor should carefully consider targeted extensions to the Coronavirus Job Retention Scheme and explain his conclusions.
“The challenge for government is to target assistance effectively at those businesses and individuals who need it.
“The key will be assisting those businesses who, with additional support, can come through the crisis as sustainable enterprises, rather than focusing on those that will unfortunately just not be viable in the changed post-crisis economy.”
The committee also cast doubt over the effectiveness of the Treasury’s commitments to supporting high quality training for young people and those struggling to find new jobs through the Kickstart Scheme, apprentice incentives and more work coaches and skills training.
It said the poor reputation of similar training schemes in the 1980s reduced participants’ employment prospects and therefore recommended that the Treasury played a key role in boosting the quality and reputation of reskilling and vocational schemes.
Rising inequality has been highlighted numerous times throughout the coronavirus pandemic, with the committee warning that the differences in hours of paid work carried out between men and women observed during the lockdown may lead to a widening of the gender pay gap, especially if the differences in hours worked persist in the months ahead.
The crisis will also see workers move and change sectors dependent on their growth and shrinkage.
Government was therefore also asked to set out how it will manage the transition to mitigate the crisis and prevent exacerbating further inequalities that undermine its “levelling up” agenda.
There are positive signs that the economy is slowly recovering from the shock of coronavirus, with new ONS data revealing that GDP rose 6.6% in July.
Yet Frances O’Grady, TUC general secretary, said the ending of CJRS could interrupt this growth.
She said: “The big danger now is that the recovery loses momentum because of a surge in unemployment when the job retention scheme ends. The government must not throw away the good work of the scheme by ending it too abruptly. We need a successor scheme for businesses with a viable future that need support for longer."Last month, the TUC published its Job Retention and Upskilling Deal which focused on short-time working to boost employment.