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IoD responds to flexible furlough announcement

01 Jun 2020


Responding to the Chancellor's furlough scheme announcement, Edwin Morgan, Director of Policy at the Institute of Directors said:

"The furlough scheme has played an immense role protecting jobs, and business leaders understand it couldn't be sustained at the same level forever. This is a much more gradual tapering than many were expecting, reflecting the concerns our members have raised. Despite this, there’s no masking the fact that if demand doesn't pick up, many will still struggle to keep hold of all their staff through the Autumn.

"The greater flexibility will be warmly welcomed by business leaders. We're delighted the Treasury has taken on board our members' calls to bring in part-time furloughing as soon as possible, and to reduce the minimum furlough period. Under social distancing, many companies will be operating below normal levels, and bringing people back flexibly means they can ramp up activities gradually. With this in mind, the cut-off for new employee applications from the end of June doesn't give much time for those who have done all they can to hold off using the system.

"To help prevent job losses, Government should provide as much support as possible to businesses looking to reopen. A tax incentive or grant scheme would help small firms get back on their feet, protecting the people that depend on them. Meanwhile, as the furlough scheme tapers off, the onus will be on revamping our skills system. Existing and planned schemes will have to be reimagined in light of the impact of coronavirus. Improving the country's digital and management skills will be fundamental to helping business adapt to the new normal."

A quarter of businesses using the Job Retention Scheme say they expect not to be able to contribute to furloughed workers’ salaries from August, according to an IoD survey published on Thursday. Read more here.

On the extension of the Self-Employment Income Support Scheme, Edwin Morgan said:

"This is a welcome move, and reflects the immense challenges many self-employed people are facing.

"However, this extension will heap yet more frustration on those left out in the cold. Small company directors who rely on dividend payments have fallen between these two support schemes, and many are in desperate need of help. The Government must address this issue to ensure the UK's entrepreneurial spirit isn't diminished."

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