Gov to fund furlough scheme at 80% until October!

[caperberries]

Aibu to consider this unsustainable? What is the reasoning behind this?

It's unsustainable and asking employers to pay part when employees are earning nothing and firms are losing money is going to result in mass redundancies. DH's firm have just announced redundancies.

If furloughed employees were made redundent they would claim universal credit. The idea is by keeping them employed and subsidised they can be brought back to work much easier when it is appropriate to the business. For alot of leisure and entertainment industries there simply isn't any work at the moment, hopefully this will change for some before October.

@KoalasandRabbit But many businesses are not going to be sustainable for months or years to come? No-way can these be propped up indefinitely in the vain hope of a "normality" than is unlikely for a very, very long time.

Some have been ordered to close.

Yes, but lots have closed when they weren't ordered to. We desperately need to get those who can work, back to work to get the economy moving again, even in small increments.

There's never going to be a day when there'll be announcement that it's all over and everything returns to normal. So, we need to chip away at it, bit by bit, however small.

First step has to be to get as many employers open again - starting with those that never needed to close. If they need a bit of a kick up the bum to do that, then that's what they need.

For those businesses that are never going to re-open under current conditions, i.e. social distancing etc., due to impractical premises etc., then they need putting out of their misery rather than be encouraged to languish on a life support machine when they're no hope for them.

If furloughed employees were made redundent they would claim universal credit. The idea is by keeping them employed and subsidised they can be brought back to work much easier when it is appropriate to the business. For alot of leisure and entertainment industries there simply isn't any work at the moment, hopefully this will change for some before October.

We need some way of being realistic though, don't we? There are some businesses that haven't a hope in hell's chance of re-opening by October. Social distancing rules will be with us for the rest of the year at least, maybe even into 2021. There's a difference between optimism and being deluded.

I think businesses need a bit of tough love. They need to be told that social distancing will be a requirement (which is inevitable). Even if there's a vaccine, it'll take months to be developed, produced and given to everyone who needs it. That's 2020 gone! They can decide now if they can social distance, and if not, then why delay the inevitable?

I am relieved at this news. Both DH and I are furloughed and we both work in the leisure and hospitality industry.

We will lose our home if we both get made redundant and have to rely on UC.

We are currently having to weigh up the decision to send our DS back to nursery when they reopen in June or not. Neither of us will be working, but we will lose our space if we dont pay for it and then won't be able to get back to work at the drop of a hat when our companies are able to open again hopefully in July.

Technically, there can only be a shortage of money if the government runs out of paper to print it on. Government spending doesn't have to come from anywhere, more spefically, they can in theory spend without raising money from taxes or loans

Yup, given the volume of MN who already complain they can’t get by on a FT wage I can’t see any issues with quantitative easing!

The gov can’t afford to pay for the furlough scheme. So they have 3 options

• recoup the money from cutting other budget areas and raising taxes for everyone still working. This will push anyone struggling before (including the squeezed middle) into poverty.
• print more money and in doing so systematically devalue the pound for everyone. Again pushing anyone who was struggling before into poverty.
• Stop paying the furlough scheme, pushing anyone who was working in affected industries Into poverty.

^ Every option ends in increased poverty the only question is who gets it.

We need some way of being realistic though, don't we? There are some businesses that haven't a hope in hell's chance of re-opening by October. Social distancing rules will be with us for the rest of the year at least, maybe even into 2021. There's a difference between optimism and being deluded.

I think businesses need a bit of tough love. They need to be told that social distancing will be a requirement (which is inevitable). Even if there's a vaccine, it'll take months to be developed, produced and given to everyone who needs it. That's 2020 gone! They can decide now if they can social distance, and if not, then why delay the inevitable?

Yes @Kazzyhoward this very much looks like a phasing out of the scheme, just a little slower. Preventing huge redundencies at the end of June.

@kazzyhoward could you clarify which businesses need to be given a kick up the bum to open up?

Rosehip I agree it's unsustainable and firms will have little choice but make redundancies to avoid bankruptcy. It would have helped businesses survive / reduce redundancies if government had just given their lower amount but not required employers to add to.

Not everyone would be able to claim UC. Working couples on two wages, if one was made redundant there are some that probably wouldn’t qualify.

I grew up in London with an elderly neighbour close by. My mother used to shop for her, and she would do an occasional evening’s babysitting when my parents went out. As I got older I visited her regularly.

I do remember her telling me about the Spanish flu pandemic. People lost their jobs or perhaps the main earner of their household and got no financial help. She said that there were men and women knocking on doors to beg for food and money.

Hopefully we’ve evolved since then.

the problem is WHERE will the money come from?

When the taxpayer bailed out the banks, it cost us £500 billion. This scheme is nowhere near that amount, it will stop many business' closing and so supports the economy.

To be clear I mean that no one should be left without fuel, food and a roof over their heads through no fault of their own.

The alternative is that too many businesses will go belly up, with consequentially many tens of thousands of job losses. With the businesses gone, where will all the unemployed people go to find another job? They would all be claiming every benefit they could.

At least with the furlough scheme, although it's costing the country a fortune now, afterwards the hope is that there will still be businesses and still be employees paying taxes.

Of course it's inevitable that taxation will have to be increased significantly. I recall that when I started work in the 1970s, when the nation was much poorer than it has been of late, the basic rate of income tax was 33% and the top rate was about 90%. Also there was very little personal allowance before income tax kicked in. Maybe we'll have to return to that sort of scenario.

Everyone will inevitably see a fall in living standards, sadly. I feel very sorry indeed for young people who are just starting their working lives, it's not a very promising prospect for them.

I do wonder whether some other forms of taxation might be introduced, such as a wealth tax. But that again is problematic, as in general the people sitting on the most wealth are those who have spent a lifetime accumulating it. A tax on elderly people's life savings would not be popular - and could mean that they later can't afford to pay for their own care.

Basically, we're all up shit creek, aren't we?!

Interesting that this is suddenly an inadequate solution when middle class workers are involved bullshit! It’s about keeping jobs open- make everyone redundant and then what have everyone reinterview for their jobs? The sheer scale of people this affects is why furlough needs to happen. Millions of people would not be able to pay their rent or mortgage, logically what do you think would happen then?

I don't doubt that there are huge numbers of people who will be enjoying furlough to its fullest making life difficult for employers who can now reopen/shouldn't have closed.
Lots will be using health hysteria as a convenient excuse which also undermines those really at risk.

You have a very narrow view on businesses.
If they let businesses go bankrupt then there will loss of taxes they collect from them and taxes from their employees will go too, people will start claiming benefits. Better save these businesses as a long term fix.

Do you not get that virus is not going anytime soon and help from the Gov is desperately needed to save these businesses?

No one complained about where the 100 billion pounds they budgeted for , for HS2 will cone from - or shall we start talking Hinckley point C? two of the most expensive projects on earth to date??
Saving people’s livelyhoods and future are far more important than these vanity projects.
And no I don’t benefit from any of these furlough schemes - so I’m talking from an impartial point of view. It’s peoples lives at stake!

Boris set out a roadmap under pressure from the public and press. It's unlikely that his target dates will be met as numbers will start to rise again as each new thing is relaxed. Germany is already having to tighten up again and their numbers are much better than ours.

Don't take everything you read as gospel.

To continue

which is why they've recognised the necessity to extend the furlough scheme. Good on them.

The alternative is people have to be made redundant and companies close then the gov has to start paying benefits to everyone! This way business have a chance of survival and helps us work towards getting the economy back

@caperberries the affected people wouln't be able to apply to universal credit unless they were made redundant. This entire scheme is to prevent massive unemployment - 25% of UK employees could potentially be made unemployed. Then after things pick up, you need to somehow rehire those people - but technically no reason for companies to rehire everyone. and do you have to do interviews/advertise all those jobs?

I think it is a great scheme and whatever will be will be regarding the funding of it down the line, I think it is essential for many people. There are many businesses who will be back to some sort of normal at some point in the next few months so it will have stopped them going under. There will be some businesses who will have to back redundancies or go under completely but at least those workers are supported for a while.

Personally, it is crap for my personal situation. DH earns higher than the £2500 cap so is actually only earning half his normal wages. We are not massively high earners but our outgoings are fairly high as our DS2 who has special needs is at private school. We can't just stop paying and unless we had given notice by 30th March will have to pay till Xmas. If DH earnt £30k a year we would not have been able to pay school fees so the 80% would be amazing. Whether you agree whether private school is ok or not that's our situation.

DH is working in a supermarket to help make up the difference (obv it comes no where close but helps) but when the furlough scheme changes in August he will likely have to go back part time, will still only earn half his salary but won't be able to work nights at the supermarket and then days at his normal job. I have no idea how we'll manage till end of October. Also his company are dreadful, they are likely to use this situation to maximise their profits for shareholders once they are generating more income, they won't ensure their workforce are treated fairly at all.

Thinking that furlough shouldn't be extended and people should be put on UC is very myopic. Doing so would mean less spending power, less taxes which is will make it more likely that nice middle class cushy WFH jobs will go in the long term too.

Btw, I support gradual return to work and I can't wait to do so myself.