Firms planning to lay off staff when the furlough scheme ends are still likely to do so, despite the Chancellor’s cash incentives to retain them, one of the county’s leading business figures believes.
Rishi Sunak unveiled another host of measures designed to fire up the economy after the ravages of the pandemic on Wednesday.
Among them was a £1,000 offer to firms bringing staff back from furlough and retaining them until the end of January.
But Jo James, Chief Executive of the Kent Invicta Chamber of Commerce believes the axe will still fall on many.
She explains: “The furlough scheme was brought in to save mass unemployment and there are grave concerns that it has only just delayed the inevitable and once the scheme ends in October, unemployment will rise significantly.
“The incentive of £1,000 to retain a member staff in work that has been in the furlough scheme until the end of January, will be welcomed by those who had intended on returning staff.
“But, I feel, those who have been putting off the inevitable and were planning to make the redundancies at the end of October will still do so. The finances will just not stack up for them. They will have to contribute to the furlough payment in August, September and October and then pay the salaries for a further three months to claim £1,000.”
She said the Chancellor’s announcements underlined that the “current level of bailout has to stop” and that it was now “over to businesses and consumers to play their part”.
But she welcome the ‘kickstart’ scheme to help young people facing long term unemployment into work.
She explained: “We know from past recessions that it is young people and disadvantaged adults that are most likely to struggle to find employment and most likely to lose their job during an economic downturn and sadly, young people’s employment prospects are expected to be disproportionately affected by the economic fallout of the coronavirus.
“The initiatives announced yesterday around skills, will certainly go a long way to encourage businesses to take on young people and through the traineeships give them the opportunity for vital work experience.”
And she praised the decision to cut VAT for the hospitality and tourism sectors from 20% to 5% until January.
She added: “It will be a great boost. I would have liked to seen more support for the sector; they were the first to go into lockdown and are only now just returning, at what is well below capacity. The majority rely on the summer season to see them through the winter and they have already lost a large proportion of their earning capabilities.
“The government is certainly coming out with some imaginative ideas and marketing initiatives. The Eat Out to Help Out scheme, is a great way of trying to stimulate trade and encourage us all to get out spending again.
“This, of course, heavily relies on consumer confidence returning. The anxiety levels amongst individuals differs greatly and some will certainly make the most of this during August and give that much needed boost to the sector.”
The offer promises a 50% discount for meals between Monday to Wednesday, up to a cap of £10 per head.
Jo James concludes: “It really is now down to us as the business community to keep things moving forward for Kent.”