Rishi Sunak has extended the furlough scheme into April 2021 and on top of this, Boris Johnson has placed the UK into another lockdown which shows no sign of being ended anytime soon. Recent analysis from Citation Law predicts that the current restrictions will be in place until the Spring which will mean the impacts of coronavirus will have had an effect on the economy for over a year.
On the economy, Gillian McAteer, the head of employment law at Citation, laid out her thoughts on what industries are likely to do well when the restrictions are pulled back and what sectors are set to struggle: “It is likely that the hospitality and leisure sectors will bounce back strongly as soon as the Government lifts restrictions but it remains to be seen whether some sectors will be permanently affected by changes to consumer behaviour and spending as a result of the crisis.
“For example, the shift in focus to online shopping which was already evident before the pandemic but which has become the norm for non-essential goods during various lockdowns, is likely to have some lasting impact on consumer behaviour.”
For individuals themselves, Gillian unfortunatly predicted bad news is on the horizon: “With the end of the furlough scheme at the end of April, it is inevitable that many jobs which were protected by the scheme, may be exposed as being unviable when this support is withdrawn, leading to a wave of redundancies.
“The government has flagged that further support in some form will be available to businesses in the Spring budget which will be delivered by the Chancellor on March 3.
“Many employers and employees will have seen the benefits of these flexible working arrangements, particularly home working, and will be keen to implement permanent changes to their ways of working going forward.
“There is likely to be an increase in a blended approach between office based and home working which many hope will strike a balance between retaining the benefits of home working for employees while at the same time helping businesses retain a sense of high engagement, team spirit and morale within their workforce.
“However, there is enormous potential for conflict and litigation where businesses and their employees have different ideas of what works.
“Even where there is agreement regarding new working patterns and location, long- term approaches to managing and engaging teams will have to adapt.”
In mid-December, Rishi Sunak extended the furlough scheme into the end of April, with the Government continuing to cover 80 percent of workers salaries for hours not worked.
Under the current rules, employers will only be required to pay wages National Insurance Contributions (NICS) and pensions for hours worked; and NICS and pensions for hours not worked.
This extension is likely to impact millions of workers as by the Government’s own data some 10 million people have had their jobs protected by the Job Retention Scheme.
Rishi Sunak welcomed the extension with the following comments: “Our package of support for businesses and workers continues to be one of the most generous and effective in the world – helping our economy to recover and protecting livelihoods across the country.
“We know the premium businesses place on certainty, so it is right that we enable businesses to plan ahead regardless of the path the virus takes, which is why we’re providing certainty and clarity by extending this support, as well as implementing our Plan for Jobs.”
The Chancellor also extended their loan schemes for businesses into March and Alok Sharma, the Business Secretary, welcomed Rishi’s announcement: “While our loan schemes have provided a vital lifeline to millions of firms across the country, we know that business owners need additional certainty as we head into the New Year.
“Extending government-backed loan schemes will give companies right across the UK the finance they need to support, protect and create jobs as we build back better from the pandemic.”
Full details on all of the Government’s support schemes and extensions can be found on their website.
Do you have a money dilemma which you’d like a financial expert’s opinion on? If you would like to ask one of our finance experts a question, please email your query to firstname.lastname@example.org.