Small businesses cannot afford to shoulder furlough costs

The Chancellor’s announcement of changes to the furl

oughing scheme today will see a greater burden placed on employers, harming smaller businesses across Wales.

Today the Chancellor, Rishi Sunak MP, announced that the Government’s furloughing scheme would be extended until October.

However, he also confirmed that from August the costs of the scheme would be “… shared between the Government and employers”, with the Government contributing reducing and employers being expected to make up the difference.

In response, we have called for greater clarity around this plan and are concerned that many small businesses will not be able to afford this additional financial burden.

Welsh Liberal Democrat Leader Jane Dodds said:

“While I welcome the Chancellor’s extension of the furloughing scheme, I am deeply concerned by the implication businesses will be left shouldering more and more of the financial burden from August.

“There are thousands of small businesses across Wales who have not been seeing any income at all over the past few weeks because of the lockdown. Local shops, hairdressers, exercise facilities and others simply do not have the money to pay 20% of their employees’ wages.

“Expecting these smaller businesses to start shouldering the cost will leave many facing the onerous choice of asking staff back to work, taking on extra debt in the hope things will improve before their repayments begin, or calling it a day on their business now.

“If we want our economy to bounce back, then we need to ensure the policy reflects the reality on the ground. I hope the Chancellor reconsiders this approach.”

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