Furlough extension prompts renewed calls for Executive to revisit Covid reopening strategy

Business leaders have expressed concern over the ability of employers to meet the costs linked to furlough if they cannot trade. Picture by Hugh Russell.
Ryan McAleer

CONFIRMATION that the furlough scheme will remain open until the end of September has been broadly welcomed by business groups and Stormont ministers, but there is concern over the costs employers could face if businesses here don’t reopen in time.

Employers will be required to contribute 10 per cent towards the hours their staff do not work in July, increasing to 20 per cent in August and September.

The latest data from HMRC put the number of jobs furloughed in Northern Ireland at 106,200 at the end of January.

But with the Executive offering businesses no dates for potential reopening, there is little certainty on the extent businesses will be able to generate revenue by July.

Glyn Roberts of Retail NI said the extension reinforces the need for the Executive to clarify the timescale of its strategy of lifting restrictions.

BUDGET 2021: At a glance

BUDGET 2021: Stormont will receive just £4.2m extra from Budget for everyday spending - Conor Murphy

BUDGET 2021: Corporation tax for north's most profitable firms will soon reach double Republic's rate

ANALYSIS: More cash... and that old corporation tax chestnut

President of Londonderry Chamber, Dawn McLaughlin also said the extension must focus minds within the Executive.

“Many businesses already struggle to pay employer contributions on the scheme without revenue coming in," she said.

“Businesses must be allowed to trade again as soon as safely possible to ensure these increased contributions can be met and jobs can be protected during the summer."

Roger Pollen of the Federation of Small Businesses said firms are already reporting that the current level of employer contribution is creating intense financial pressure.

Their concerns were yesterday shared by Finance Minister Conor Murphy, who said he is worried that asking employers who may not be fully operational to find the cash for the wage costs could lead to redundancies.

ANALYSIS: The Big Extender and Big Freezer by Richard Ramsey

BUDGET 2021: Stamp duty extension as Sunak bring in 95 per cent mortgages

BUDGET 2021: Raising a glass to booze duty freeze (if only the pubs were open)

ANALYSIS: A Budget about protecting jobs and livelihoods

Meanwhile, there was more positive news for the newly self-employed. Chancellor Rishi Sunak said those who filed their tax returns for 2019-20 by midnight on Tuesday are now eligible for the fourth and fifth tranches of the Self-Employed Income Support Scheme (SEISS).

The fourth SEISS will run from February until April, covering up to 80 per cent of three months' trading profits up to £7,500.

The fifth grant will cover May to September, but it will be wound down, with only those who can show their turnover has fallen by 30 per cent more eligible for the full 80 per cent grant.

Self-employed people whose turnover has fallen by less than 30 per cent will get a 30 per cent grant.

The expansion of the SEISS and the furlough extension has been welcomed by Economy Minster Diane Dodds.

“The Job Retention Scheme has seen significant take-up in Northern Ireland, with in excess of 100,000 people furloughed. I have been clear that, rather than ending on 31 March, the scheme would be required for some months to come, and I called on the UK Government to extend it. I therefore welcome the Chancellor’s announcement that the scheme will continue until the end of September,” said the minister.

Enjoy reading the Irish News?

Subscribe now to get full access