lb50m furlough bill in route, warns Labour
Labour Party analysis has revealed the £50 million bill government ministers are forcing struggling businesses to pay in July, despite the serious impact upon them of ongoing restrictions.
From 1 July, all businesses including in sectors hardest hit by restrictions is going to be forced to contribute 10 per cent for the price of furloughing employees. Ministers have refused to push back this date in tandem with the delay towards the roadmap – meaning businesses instructed to pay will include those still legally closed or operating in a significantly reduced capacity.
This implies that, in a couple of weeks, employers will face a choice between paying £122.80 on average per every employee whose job they would like to protect, or removing staff from the payroll. That includes businesses still unable to open like night clubs and live music venues, in addition to those facing huge financial difficulties in light of ongoing restrictions including travel agents and airlines, events spaces, bars and pubs, and businesses in the wedding industry.
On 1 July, Labour warns that ministers will also begin withdrawing the 100 per cent business rates relief for retail, hospitality and leisure businesses, and therefore businesses will need to contribute 34 percent towards their monthly business rates irrespective of their trading status. The typical night club will need to pay £718 in July, the typical bar will need to pay £500, the average restaurant will have to pay £598, and also the average theatre will have to pay £1,048.
Labour has called around the government to: delay the increased employer contribution to furlough, given that most of people remaining on furlough operate in the sectors impacted by the ongoing restrictions; and on business rates relief, learn lessons in the Labour-led Welsh government, that has given the majority of businesses 100 percent business rate relief for that course of this financial year. In contrast, the Conservative government is sending out bills to businesses that cannot fully open.
Shadow Business Secretary Ed Miliband said: “Businesses did right by our country in this crisis and the government must do right by them. But Ministers have repeatedly didn't grasp the simple principle that public health restrictions must be matched by fair economic measures.
“A month’s delay might appear to be a short while, but for businesses legally closed from trading or those hanging on by their fingertips from going under and counting on the time of year the delay is another blow. That businesses not able to reopen are being sent huge bills defies logic. Unless Ministers do something, we risk pushing more firms within the edge.”
