Covid-19: Future furlough changes ‘another pressure on retailers’

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Matthew Horwood

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Some businesses have said tapered furloughing will be beyond their means

There has been mixed reaction from the business community to future changes to the government’s furlough scheme.

Chancellor Rishi Sunak has set out how employers will have to start sharing the cost of the Coronavirus Job Retention Scheme from August.

They will have to pay National Insurance and pension contributions, and then 10% of pay from September, rising to 20% in October.

Workers will be allowed to return to work part-time from July.

However, companies will have to pay 100% of part-time wages.

‘Pressure on retailers’

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Aodhán Connolly said retailers who have had to stop trading are under huge financial pressure

Director of the Northern Ireland Retail Consortium, Aodhán Connolly said employers being “asked to top up wages when they haven’t been able to trade is yet another pressure on retailers of all sizes and an impediment to reopening”.

Mr Connolly stressed that retailers have been “grateful for the support that has come from the government since the start of this crisis” and welcomed the ability to furlough part time from July, saying it was “a central ask” of his representatives.

However, he added: “The Northern Ireland Executive now need to let us play our part in restarting the Northern Ireland economy.”

Mr Connolly said a tapered end to the furlough scheme “means that there will not be another huge shock to an industry which has suffered so much over recent weeks”.

‘Clarity’

Earlier, Economy Minister Diane Dodds warned the changes could be “incredibly difficult” for NI businesses.

Retail NI chief executive Glyn Roberts said the outline plan for economic recovery published by the economy minister “provides further clarity on a roadmap for rebuilding the economy and reopening the wider retail sector”.

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Pacemaker

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Glyn Roberts has called for fashion retailers to be allowed to reopen

Mr Roberts said Retail NI believes fashion retailers should be included in the phased approach to reopening non-essential retail outlets.

“Many of our fashion retail members have already advanced risk assessment plans in place that will ensure social distancing and provide a safe environment for shoppers and their staff,” said Mr Roberts.

He said the plan also needs to include “a complementary strategy for reopening our town and city centres”.

“It is absolutely vital that we create confidence in shoppers that our shops and high streets will be safe when we reach the stage of a wider reopening”.

Stephen Magorrian, who runs the Horatio hospitality group, said the chancellor’s announcement was “better than expected”.

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10 Downing Street / AFP

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Chancellor Rishi Sunak said employers would start to make small pay contributions from August

However, he added that national insurance and pension contributions are still a significant cost with no income.

“For us, that’s £7,000 a month. We haven’t had any income from March, so if we’re not open, I don’t know where we’re going to get the money to pay that.”

He said the news “puts the emphasis now back on to Stormont to give us a date as to when we can open”.

“If we can open – depending on the guidelines under which we can open – we’re in a position where we can start to calculate if the furlough will still work for us,” he said.

Mr Magorrian said his business was considering redundancies before the announcement, but that he hopes that this will not now be necessary.

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PA Media

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Over 200,000 people have been placed on the furlough scheme in Northern Ireland

“Now we’re in a position where we can look at our costs in a different way,” he said.

Roger Pollen of the Federation of Small Businesses welcomed the news, saying it is “providing a taper, rather than a cliff edge”.

He said it will ease back responsibility to companies, so they are “not being faced with a significant new overhead straight away”.

“It will allow them to stretch themselves back into trading, so overall, it’s a good set of measures.”

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