Covid: Wales lockdown job support gap a barrier to firms

Covid: Wales lockdown job support gap a barrier to firms

A gap between the start of Wales’ lockdown and the UK government’s new Job Support Scheme is a “significant barrier” for firms trying to survive, a business group has said.

A scheme to cover 67% of wages is not due to start until 1 November – just over a week after the firebreak starts.

The Federation of Small Businesses (FSB) urged the UK and Welsh governments to work together.

The Treasury said employers could use furlough until the end of October.

“There is no gap in funding between our schemes,” a spokesman said.

However, CBI Wales director Ian Price warned some people may fall between the cracks of furlough and the new Job Support Scheme (JSS).

Chancellor Rishi Sunak has declined to bring the JSS forward, but the Welsh Government said it would pay for the full cost – including the wages covered.

The Welsh Government wrote to Mr Sunak asking if firms could access the scheme a week earlier.

In a letter to Mr Drakeford, Mr Sunak said he was “unable to bring the claims date for the expansion to the Jobs Support Scheme forward from 1 November to 23 October due to limitations in HMRC delivery times”.

He said employees who have been furloughed for at least three weeks in the past can be re-furloughed until 31 October.

However, people who have never been furloughed will not be covered.

The firebreak, which will see pubs, restaurants, cafes and non-essential shops shut, is due to start on Friday.

Conservative Welsh Secretary Simon Hart has accused First Minister Mark Drakeford of taking a decision that would cause people to lose their jobs.

The JSS plans to cover 67% of workers wages in businesses that have been forced to close.

It pays up to a maximum of £2,100 a month and staff must be off for seven days to be eligible. Payments are due to begin in December.

It replaces furlough, which ends on 31 October and covered 80% of pay, with government paying 60% and employers 20%.

Ben Cottam of FSB Wales urged the UK government to “urgently respond” to Welsh Government’s request and said the offer to pay the cost of the extension was a “practical response”.

“The current one-week gap between the beginning of lockdown on the 23 October and the beginning of the Job Support Scheme is a significant barrier for businesses who are working incredibly hard to stay afloat,” he said.

“In order to inspire confidence in businesses at this difficult time, as well as help minimise uncertainty and remove as many of the hurdles that firms will be facing as possible, we urge UK and Welsh Government to work together in order to make this happen”.

Mr Price said: “It appears that some people may unfortunately being falling through the cracks of the JRS and JSS.

“It’s imperative for business, government and employees that we make this work.”

The Welsh Government said its offer to pay to bring the scheme forward a week “would have meant Welsh businesses and employees being able to access this funding a week ahead of when the scheme is due to open on 1 November”.

On Monday, Mr Hart said the Welsh Government knew “full well” it was not possible for the Treasury to bring forward the JSS before announcing the lockdown.

He said the lockdown announcement was “very, very unfair” on people “caught by the time gap” before the start of the JSS.

But Plaid Cymru said it was a “question of fairness”.

Liz Saville Roberts, MP for Dwyfor Meirionnydd, said: “A firebreak gives us the opportunity to buy more time to build up a resilient test, trace and isolate system.

“But for that to work, the UK government must also do its part by giving appropriate financial support.”

A Treasury spokesman said: “Employers in Wales can use the furlough scheme until 31 October to help them through this difficult period and can then get support through our new Job Support Scheme from 1 November.”

A UK government source said the chancellor called all finance ministers before the announcement of the expansion of the scheme to explain how it would work, when it would come into effect and that it would be UK-wide.

He asked finance ministers to keep restrictions as consistent as possible across the devolved nations, the source said.

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