Labor said nightclubs and indoor play areas, which are still banned from reopening, could be forced to cut thousands of jobs, with employers having to contribute to the program before it closes. These businesses are to remain closed due to a perceived increased risk of coronavirus transmission, which means they have no income.The government’s coronavirus job-retention program has paid 80% of the wages of workers on leave up to £ 2,500 a month since its announcement in March. However, from Saturday participating companies must pay employers’ social and pension contributions. From September, they will also have to pay 10% of workers’ wages, which will drop to 20% in October. The end of the holiday program has been set without exemptions for companies still banned from operating.
Ed Miliband, the shadow business secretary, said the government would be “guilty of thousands of workers across the country losing their jobs and their livelihoods” unless it urgently adjudicates the vacation program.
“Businesses in very different industries and circumstances should not be treated in this uniform manner, and it is clearly unfair and illogical for employers who are still stranded and unable to trade,” Miliband said.
Labor said night-time industries alone could face costs in the hundreds of millions of pounds, based on industry figures which suggest more than 500,000 workers are on leave in the industry. These businesses have no way of making money while they are still banned from opening.
Following analysis of official figures, the Resolution Foundation said the risk of dismissal was highest in industries such as hospitality and recreation, where around four in ten workers are still on leave. More than a million workers in these sectors alone face a higher risk of unemployment in the coming months, he said.
As late as July 24, the prime minister said more than 9 million workers were on leave. The foundation said official figures showed “that is far from the truth” – the number of holidays now stands at 4.5 million.
Rishi Sunak has been pressured to continue covering employers’ social contributions and pensions, which will be excluded from August 1. The average cost will be £ 70 per month – or 5% of employees’ pre-coronavirus salary.
The chancellor refused to back down, arguing he had devised a system that gradually reduced the grant before closing at the end of October.
The foundation said the increase and decrease in the number of employees benefiting from the job retention program has demonstrated its success in protecting businesses and workers as the lockdown was introduced and relaxed.
“However, with millions of staff still on leave, the threat of major layoffs is great, as JRS is phased out between August and October,” he said.