NEWS9 July 2020

Government launches job retention scheme

Covid-19 News People UK

UK – Businesses will receive a £1,000 bonus for each furloughed employee who returns to work, Rishi Sunak, Chancellor of the Exchequer, has told the House of Commons.


But the furlough scheme, where 80% of employees’ wages are covered by the government while they are unable to work, will be wound down and end in October this year.

In his summer economic update delivered in parliament yesterday, Sunak said that the job retention bonus would give businesses £1,000 for every furloughed worker who was still working for the company on 31 January 2021.

For businesses to be eligible for the bonus, the furloughed employee must be paid at least £520 a month on average in November, December and January.

The announcement has been broadly welcomed by industry bodies in market research and advertising.

Approximately nine million people have been put on furlough since March, and if all returned to work the bonus scheme would cost the government £9bn.

However, Sunak told parliament that leaving the furlough scheme open forever would give people “false hope” that they could all return to jobs they had before the Covid-19 lockdown and risked people losing skills and opportunities for new work.

“It is in no-one’s long term interests for the scheme to continue forever, least of all those trapped in a job that can only exist because of a government subsidy,” Sunak said.

“So the furlough will wind down, flexibly and gradually, supporting businesses and people through to October.”

Companies have been able to bring back workers on furlough since 1 July, when a flexible furlough scheme was put into place.

The government also announced a £2bn jobs programme for young people, and a £2,000 payment for businesses taking on apprentices.

Jane Frost, chief executive of the Market Research Society, said she welcomed the announcement about the job retention bonus and hoped it would “provide some reassurance” to affected staff.

“Unfortunately, many workers will still be made redundant in the coming months, despite their value and expertise,” Frost added.

“That is why, alongside our colleagues in the advertising and marketing sectors, we have been calling on government to support people in retraining for the changing marketplace – and to develop digital and data skills in particular.”

She said that the current economic crisis meant that many older people would be out of work for the first time, and that retraining opportunities would help industries to retain their experience and knowledge.

A spokesperson for the Advertising Association said it supported the Chancellor’s measures.

“The new jobs retention scheme will be welcomed by businesses right across our industry as they return staff from furlough and back into work,” the spokesperson said.

“We hope that all these measures will help the parts of our sector affected by the outbreak and we stand ready to work with government in aiding our country’s economic resurgence.”