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Jumat, 29 Mei 2020

Rishi Sunak races to build 100bn job creation scheme amid fears 2MILLION will lose their jobs - Daily Mail

Rishi Sunak races to build £100bn job creation scheme amid fears 2MILLION people will lose their jobs when £10bn-a-month furlough scheme ends in October

Rishi Sunak today announced details of furlough scheme changes after August
Chancellor said support will taper off to October when firms pay 20 per cent
Companies have warned of a wave of redundancies as the support is scaled back
Mr Sunak said employees can return part-time from July - earlier than planned
Here’s how to help people impacted by Covid-19

Published: 01:41 BST, 30 May 2020 | Updated: 04:18 BST, 30 May 2020

Rishi Sunak is racing to build a £100bn job creation scheme amid fears two million Britons will lose their jobs when the furlough scheme ends.

During the Downing St press conference the Chancellor promised to address the looming employment crisis with a scheme to create additional jobs.

Mr Sunak announced that the furlough scheme, which some predict will cost £100bn, would be revamped into 'flexible furlough'.

This will enable employees to return as long as companies pick up a percentage of their salary equivalent to the hours they work.

Ministers told the Financial Times that Mr Sunak and Boris Johnson were working to hatch a plan to prop-up the plummeting employment rate with a stimulus package.

The furlough scheme currently covers 80 per cent of pay for employees, up to a ceiling of £2,500 a month. Some 8.4million jobs are currently being propped up, to a total value so far of £15billion.

A handout photo made available by n10 Downing street shows Britain's Chancellor of the Exchequer Rishi Sunak holding a digital Covid-19 press conference in n10 Downing street in London, Britain, 29 May 2020

What changes has Rishi Sunak announced to the Government's furlough scheme?

Chancellor Rishi Sunak today announced a major overhaul of the furlough scheme ahead of its planned closure at the end of October.

Here is how it will work:

Furloughed workers will continue to receive 80 per cent of their pay up to £2,500 a month until the end of October.

But they will be able to return part-time from July without losing out financially, with businesses told to pay the percentage of wages for the hours worked.

The Government will pick up the full bill for the furlough scheme until the end of July.

From August, companies will then have to pay employer national insurance and pensions contributions for those on furlough.

In September, bosses will also have to pay 10 per cent of a furloughed employee's wages, with the Government covering 70 per cent up to £2,190 per worker.

The burden on firms will then increase to 20 per cent in October, with the Treasury picking up the remaining 60 per cent up to £1,875.

The Government is adamant the scheme will close at the end of October.

'Now our thoughts, our energy and resources must turn to looking forward to planning for the recovery,' Mr Sunak said yesterday.

'We will develop new ways to grow the economy, to back business, boost skills and help people thrive in the new post-Covid world.'

The FT reported that the prime minister had already been mulling over an infrastructure-focussed job creation programme with the cabinet, including ideas on green energy.

Mr Sunak used the daily Downing Street press conference to set out a major shake up of the furlough scheme as he said businesses must start to share the wage burden from August before the initiative is finally brought to an end in October.

However, the proportion they will be asked to contribute will be tapered up to a maximum of 20 per cent over the three month period.

The Chancellor stressed the UK scheme would remain 'among the most generous in the world', but said businesses should start helping to pay the wage bill of furloughed works despite fears of a wave of redundancies.

After an outcry from Tory MPs, he also announced an extension to separate support for the self-employed - with grants continuing until August, but slightly scaled back.

As the cost of the bailouts soar, Mr Sunak is desperately trying to balance the need to wean companies off government money with keeping the economy on life support during lockdown.

Under the new framework staff will have the same safety net until October, but firms will have to pick up some of the tab from August.

That month they will need to pay national insurance and pension contributions for their staff on furlough.

In September that will be expanded to 10 per cent of wages, and then in October it will be 20 per cent before the scheme then closes.

The Institute for Fiscal Studies think tank said the combined cost of the furlough and self-employment support schemes could now 'easily breach' £100 billion.

Mr Sunak said: 'Our top priority has always been to support people, protect jobs and businesses through this crisis. The furlough and self-employment schemes have been a lifeline for millions of people and businesses.

'We stood behind Britain's businesses and workers as we came into this crisis and we stand behind them as we come through the other side.

'Now, as we begin to re-open our country and kickstart our economy, these schemes will adjust to ensure those who are able to work can do so, while remaining amongst the most generous in the world.'

The maximum 20 per cent - 60 per cent split between the employer and state that Mr Sunak has settled on is lower than the 50 per cent share for businesses that had been previously mooted.

The Treasury said individual firms will decide the hours and shift patterns for their part-time employees, and be responsible for paying their wages while in work.

Mr Sunak will hope that the 'flexible furlough' scheme and the delayed request for businesses to start sharing the wage burden will help to reduce the number of people who are made redundant, potentially spreading job losses over a longer and more manageable period.

Currently, some 2.3million self-employed people are receiving grants equivalent to 80 per cent of their usual monthly profits, to a ceiling of £2,500.

Ministers had been indicating until recently that the current round, up to next month, was likely to be the last.

But Mr Sunak revealed there will be a 'second and final grant' in August.

It will be worth 70 per cent of average monthly trading profits, paid out in a single installment covering three months' worth of profits, and capped at £6,570 in total.

Business and union leaders welcomed the Chancellor's announcements, especially the gradual reduction in furlough contributions from the Treasury.

British Chambers of Commerce director general Adam Marshall said: 'The Chancellor has listened to business communities and struck a careful balance that will help many firms bring furloughed staff back to work flexibly over the coming months.'

TUC general secretary Frances O'Grady said: 'We're glad the Chancellor has listened to unions and allowed employers to start using short-time furlough from July. This will help employers gradually and safely bring people back to work, protect jobs and support the economy to recover.'

Dame Carolyn Fairbairn, the CBI's director general, said: 'The Government's support throughout the lockdown so far has been a lifeline for businesses, employees and the self-employed. The changes announced will help ensure the schemes stay effective as we begin a cautious recovery.

UK plc is heading for the worst recession in 300 years, with millions of jobs expected to be lost and the prospects for a quick bounce back unclear.

Bank of England Governor Andrew Bailey underlined the perilous state of the economy yesterday by raising doubts about the speed of any recovery and making clear a fresh wave of quantitative easing - effectively printing money - will be needed.

The intervention came as new economic indicators showed that just 14 per cent of stalled businesses are expecting to restart their operations over the next fortnight, and they are likely to bring back only 31 per cent of furloughed staff.

Online job ads have halved between March and May, according to the Office for National Statistics.

Figures released on Wednesday showed another 400,000 have been furloughed over the past week, with a million employers now putting in for a total of £15billion

Since the crisis began in March, the Bank has cut official interest rates to an historic low of 0.1 per cent, announced a £200billion expansion of QE, made moves to ease the financial pressure on large companies and made it easier for banks to lend.

George Eustice, the Environment Secretary, refused to be drawn this morning on what Mr Sunak would announce, but said: 'Clearly as we start to emerge from the lockdown and start to get our economy back to work we cannot keep people on the furlough scheme indefinitely.

'We need to identify ways of moving them off the furlough scheme and back to work.'

Asked on Sky News whether there will be continued support for the self-employed, Mr Eustice said: 'Well obviously it is nearly a month ago now that we said we wanted to reopen those bits of the economy that couldn't work from home, so we've been encouraging the construction industry for instance to get back to work.

'A lot of those self-employed professions such as plumbers, electricians and so on, those people are able to return to work now, albeit observing social distancing, but we need to try to start to get bits of the economy back to work.

'Now I don't know what Rishi Sunak, the Chancellor, will say later in terms of self-employed and the furlough scheme for them, but I think there is a general overarching message here that we've had a very generous furlough scheme in place to help people through these extraordinary times and to ensure that businesses' overheads could be covered.'

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2020-05-30 00:52:13Z
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Scheme paying millions of salaries extended to October by Chancellor - BBC News - BBC News

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2020-05-29 21:20:46Z
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Coronavirus: Ted Baker to unveil £80m share sale plan - Sky News

Ted Baker, the high street fashion brand, will next week launch an attempt to raise virtually its entire market capitalisation as it joins the queue of companies seeking funds to survive the COVID-19 pandemic.

Sky News has learnt that Ted Baker will unveil a placing and open offer to target roughly £80m from the sale of new shares as soon as Monday morning.

The company, which was left reeling by a string of internal governance and accounting rows last year, is understood to be close to proceeding with the fundraising after consulting with leading shareholders.

Its biggest investor is Ray Kelvin, Ted Baker's founder, who left the company in March last year following allegations of "forced hugging" and other inappropriate behaviour.

Since then, the company has lurched from one crisis to another, announcing a string of profit warnings and a massive stock overstatement that raised questions about its survival prospects.

It was unclear on Friday evening whether Mr Kelvin would choose - or be able - to commit the roughly £28m he would need to retain his current 35% stake if the fundraising is successful.

If he does not, he faces seeing his shareholding substantially diluted.

Other big investors in the company include Schroders, Columbia Threadneedle and Toscafund.

Ted Baker has not updated investors on its finances since March 23, when it announced that it had secured an additional £13.5m of borrowing headroom from lenders.

It also announced the sale and leaseback of its headquarters near Kings Cross, known as The Ugly Brown Building.

Those moves to raise cash came shortly before the company confirmed that finance chief Rachel Osborne would become its permanent chief executive.

More recently, it named the easyJet chairman - and former Next chairman - John Barton as its next non-executive chair.

Lenders to Ted Baker have been working with advisers from FTI Consulting to undertake an assessment of its prospects since before the coronavirus pandemic began.

This week, the company said it would begin a gradual reopening of its stores from mid-June.

The retailer's shares have plummeted during the last 15 months, and closed on Friday at 153.3p, almost 13.5% lower on the day and down 89% over the last year.

Its market value has plunged to just under £80m.

Mr Kelvin had been linked with a possible bid to take the company private, although there is no indication that he has any such plan.

Its stock overstatement may also pose a headache for its auditor, KPMG.

In 2018, the big four firm was fined £3m by the Financial Reporting Council for breaching the watchdog's ethical standards in relation to non-audit services provided to the fashion retailer.

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The penalty was reduced to £2.1m because KPMG proactively settled it.

Goldman Sachs and Liberum are understood to be working on the capital-raising process.

In response to Sky News' report, Ted Baker said it "notes recent press comment regarding the possibility of the company undertaking an equity issue".

"Since the company's strategic update on 26 February, Ted Baker, along with many businesses, has seen a marked impact on trading due to government actions to limit social interaction and movement.

"This, in addition to trading pressures from the last financial year, makes the need for a wider transformation more acute.

As a result, the company is in an advanced stage of preparation for a placing and open offer as part of a broader package of measures that the company has put in place to significantly strengthen the balance sheet."

Next week from Monday to Thursday, Dermot Murnaghan will be hosting After the Pandemic: Our New World - a series of special live programmes about what our world will be like once the pandemic is over.

We'll be joined by some of the biggest names from the worlds of culture, politics, economics, science and technology. And you can take part too.

If you'd like to be in our virtual audience - from your own home - and put questions to the experts, email afterthepandemic@sky.uk

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2020-05-29 19:03:47Z
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Coronavirus furlough scheme to finish at end of October, says chancellor - BBC South East Wales

The UK's coronavirus furlough scheme will finish at the end of October, Chancellor Rishi Sunak has confirmed.

At the No 10 briefing, Mr Sunak also set out how employers will have to start sharing the cost of the scheme.

From August, employers must pay National Insurance and pension contributions, then 10% of pay from September, rising to 20% in October.

Also, workers will be allowed to return to work part-time from July, but with companies paying 100% of wages.

Mr Sunak said the Coronavirus Job Retention Scheme will adjust so "those who are able to work can do so".

Some 8.4 million workers are having 80% of their salaries paid for by the government - up to £2,500 a month - under the scheme, which was originally intended to last until the end of July.

Earlier this month, the chancellor extended the scheme until the end of October, but did not spell out how employers would start contributing.

Under Friday's changes, furloughed workers will continue to get 80% of pay until the end of October, but by then a fifth of their salary will have to be met by employers.

"Then, after eight months of this extraordinary intervention of the government stepping in to help pay people's wages, the scheme will close," Mr Sunak said.

Asked if he would "switch the furlough scheme back on" in the case of a second peak in cases and the reintroduction of lockdown measures, the chancellor said the scheme "as it stands in a national way, in the way that it is designed" will end in October.

"Eight months, as I said, is I think a generous and long period of time," he said.

Employers' claims under the scheme have reached £15bn so far, however the scheme is expected to cost a total of around £80bn, or £10bn a month.

The Office for Budget Responsibility is set to publish detailed costings next week.

It comes as the latest UK-wide figures show another 324 people have died after testing positive for coronavirus in hospitals and the wider community, bringing the total to 38,161.

Some 131,458 people were tested for coronavirus on Thursday, with 2,095 more positive cases reported.

Restaurateur David Moore told the BBC he is "deeply, deeply worried" about the changes to the scheme.

Mr Moore, who owns London restaurant Pied a Terre, said it is unfair for hospitality firms to start paying towards wages when they do not have any revenues.

"It is massively disappointing and sheer lunacy to try to get an industry who hasn't had any revenues for what will be then probably five months, to ask them to start contributing," he told BBC Radio 4's The World at One.

He warned that some businesses could go bust as a result.

"Will we have any money coming through the door to help contribute? If we don't it is all too late, a lot of businesses are heading down the pan."

Labour's shadow chancellor Anneliese Dodds also warned about job losses.

"It is concerning that there is no commitment within these plans for support to only be scaled back in step with the removal of lockdown," she said. "Nor is there any analysis of the impact on unemployment of a 'one size fits all' approach being adopted across all sectors."

How will the scheme change?

From 1 July, businesses will be allowed to bring furloughed employees back part-time, a month earlier than previously announced. The move is aimed to help support people back to work, the government said.

It will be down to individual firms to decide what part-time means. They will be able to set the hours and shift patterns staff will work when they return, but companies will have to pay wages while they are in work.

"Extending the job retention scheme and making it more flexible is key to getting the economy back on its feet," said Federation of Small Businesses national chairman Mike Cherry.

"By providing employers with the adaptability they'll require as businesses adjust to a new normal, and bringing forward the flexible furlough launch date, the government is giving hope to small firms right across the UK."

From 1 August the level of government grant will be reduced "to reflect that people are returning to work".

Furloughed workers will continue to receive 80% of their pay, but from August it will include a growing employer contribution. It will start with bosses paying NI and pensions in August, plus 10% of pay in September, rising to 20% in October.

The details: How employers' contributions will increase?

During August the government will pay 80% of wages up to a cap of £2,500. Employers will have to pay NI and pension contributions. For the average claim, that's 5% of the gross employment costs the employer would have incurred had the employee had not been furloughed.

In September, the government will cut its grants to 70% of wages up to a cap of £2,190. Employers will pay NI and pension contributions and 10% of wages to make up the 80% total up to a cap of £2,500. That works out at 14% of the average gross employment costs the employer would have incurred.

In October the government grant will be cut to 60% of wages up to a cap of £1,875. Employers will pay NI and pension contributions and 20% of wages to make up the 80% total up to a cap of £2,500. That's 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.

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2020-05-29 17:15:00Z
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Coronavirus furlough scheme to finish at end of October, says chancellor - BBC South East Wales

The UK's coronavirus furlough scheme will finish at the end of October, Chancellor Rishi Sunak has confirmed.

At the No 10 briefing, Mr Sunak also set out how employers will have to start sharing the cost of the scheme.

From August, employers must pay National Insurance and pension contributions, then 10% of pay from September, rising to 20% in October.

Also, workers will be allowed to return to work part-time from July, but with companies paying 100% of wages.

Mr Sunak said the Coronavirus Job Retention Scheme will adjust so "those who are able to work can do so".

Some 8.4 million workers are have 80% of their salaries paid for by the government - up to £2,500 a month - under the scheme, which was originally intended to last until the end of July.