Thirty-fourth Report - Covid-19: Support for jobs

Too much chopping and changing of the new schemes has created uncertainty for the UK nations, regions and businesses, regarding financial support and job security. Nations, regions and businesses, as well as their employees, need as much certainty as possible … Read more Too much chopping and changing of the new schemes has created uncertainty for the UK nations, regions and businesses, regarding financial support and job security. Nations, regions and businesses, as well as their employees, need as much certainty as possible to allow them to plan ahead. Instead what they got in the autumn was a sequence of announcements, right to the very end of the end of first phase of the schemes, constantly adjusting the levels and availability of funding support for workers. The government announced on 5 November that both the CJRS and SEISS would be extended with levels of support broadly equivalent to the levels provided under the first phase of the schemes. We are concerned that businesses’ response to this initial uncertainly may have resulted in more workers being laid- off, even though eligibility for the government’s extended schemes was moved back to 23 September to cover such redundancies. Recommendation: The Departments should provide as much clarity and forewarning as possible about the employment support arrangements that will be available for UK nations, regions and businesses under conditions of national lockdown, regional lockdown and easing of restrictions for the remainder of the covid-19 pandemic. It should commit to this ahead of the Treasury minute response so employers can be clear that they can plan ahead with greater certainty. Show less

On the basis of a report by the Comptroller and Auditor General, we took evidence from HM Treasury and HM Revenue & Customs (HMRC) about the employment support schemes that they have established since the start of the covid-19 pandemic.1

HMRC’s investment in its RTI system meant that, unlike SEISS, eligibility for CJRS was based on more up-to-date data. The RTI system is used on a monthly basis by employers to submit tax information on their workforce to HMRC. HMRC … Read more HMRC’s investment in its RTI system meant that, unlike SEISS, eligibility for CJRS was based on more up-to-date data. The RTI system is used on a monthly basis by employers to submit tax information on their workforce to HMRC. HMRC said that this information was vital in enabling it to run the CJRS safely. It meant that any employee on an employer’s Pay-As-You-Earn system at 19 March 2020, the day before the first national lockdown, could potentially be furloughed.19 Similarly, with the latest national lockdown, eligibility for the CJRS extension is based on employees on employer payrolls on 30 October.20 The downside to using RTI data in CJRS is that employers could submit claims based on data they submitted after the scheme was announced, whereas the use of old self-employed taxpayer data in SEISS prevented that problem. This increased the risk that employers would deliberately misstate their positions to increase their CJRS grant awards.21 Evaluation of the initial schemes Show less

We noted that a large number of business, particularly within more restricted areas, had not been able to operate normally for many months. While support for businesses is expected, it is essential that government provides this money as quickly as … Read more We noted that a large number of business, particularly within more restricted areas, had not been able to operate normally for many months. While support for businesses is expected, it is essential that government provides this money as quickly as possible.46 The Job Retention Bonus was supposed to pay businesses £1,000 for each furloughed worker brought back to work and continuously employed until the end of January 2021.47 We asked HM Treasury how much money it had set aside for the scheme and whether it had been cancelled or deferred as reports appeared to be mixed. HM Treasury told us that this scheme had been deferred as it would not make sense to pay the grants at the same time as extending the furlough scheme and that instead it was something that the Chancellor will come back to next year.48 HM Treasury noted that the Chancellor felt that the broader and more generous safety net provided by extending the existing CJRS was required—rather than implementing the JSS—in order to help keep people in work.49 Show less