New Starter Justice: Chancellor extends furlough scheme until October—but New Starters face eight months with no income unless scheme is amended.
Today, Chancellor Rishi Sunak announced that the Coronavirus Job Retention Scheme will be extended until October—a move that would leave new starters without income for eight months, unless the scheme is amended further.
An estimated 1.5 million people started jobs after 28 February—the initial cut-off date for the CJRS. Despite having contractual proof of employment, their employers are unable to furlough them due to the cut-off date, and many have now endured two months with no income.
After ignoring three direct questions about the plight of new starters in this morning’s briefing, Sunak went on to call his decision to exclude new starters from the scheme “defensible”. The response has sparked fresh anger among new starters, who have been campaigning for two months for inclusion in the CJRS.
In light of the announcement, campaign group New Starter Justice is reiterating its call for an evidence-based inclusion in the furlough scheme, for anyone with contractual proof of employment starting after 28 February. In addition, New Starter Justice is asking that all employers are given the financial support they need to retain new starters so that they can start their roles, as planned, as soon as it is safe to do so.
The campaign group saw an influx of requests for food and financial aid around 30 April—which for many would have been payday—with many members of the group describing how they were unable to feed themselves and their families. Research carried out by New Starter Justice found that 83% of its members received £0 in universal credit for April, with many left ineligible due to their partner’s salary, for example.
“Despite reports last week that the scheme was winding down, Rishi Sunak’s announcement today has galvanised us to keep fighting”, said Becky Kells, an organiser at New Starter Justice. “We have seen some very desperate situations among our members from two months without income—imagine what those situations will look like in October if we don’t receive support. We are taxpayers with proof of employment. The government needs to help us.”
New Starter Justice has announced that it will send its open letter to the Chancellor tomorrow. The open letter has so far accrued 7,908 signatures, including 53 cross-party MP signees. “So many [new starters] have attended work, for days, weeks, and have paid taxes on the earnings through payrolls but you fail to accept that as proof”, it says. “Many were not even lucky enough to get the opportunity to start, left in limbo and waiting for this living nightmare to end. But both our past and present details and contributions are logged on HMRC systems. The evidence is available and so clearly displays that a solution that works for all is achievable. We have proof. We’ve done everything right—so why are you punishing us?”
New Starter Justice can also reveal the results of its internal research on how the CJRS exclusion has affected people. The group estimates that over a million people are excluded from the CJRS in its current form—with between 350,000 and 500,000 in the hospitality sector alone.
The Government has suggested that new starters should apply for universal credit or ask their old employers to be rehired and furloughed. However, 83% of new starter justice members were eligible for £0 of Universal Credit in April. In 94.1% of instances where new starters asked their old employers to be furloughed, the answer was no.
Hospitality, Construction, Retail, Travel/Tourism and Automotive are the top sectors affected—but there are 32 further sectors affected.
New Starter Justice has vowed to keep fighting for inclusion in the scheme. Natalie Greenway, an organiser with the campaign, said: “When asked directly about the New Starter Justice campaign today, Rishi Sunak told the House of Commons that he believes his decision to exclude new starters from the CJRS is “defensible” by the supposed fraud risks of extending the scheme. What he is continually failing to acknowledge is that there are over a million families being forced into poverty as a direct result of this decision—and that is indefensible. Our members are facing eight long, hard months without an income and little to no financial support to help them survive. These people are hardworking tax payers, they are real people with real families and they deserve to be supported.
“If a safety net is not quickly put into place to capture those that have fallen through this loophole, many will never recover from hardship they have been driven into. There is ample time for the Chancellor to reconsider the small print of his CJRS in order to create a more inclusive scheme to support the working people and today’s extension has solidified that for us. If the scheme is extendable, it is amendable—and we will continue to press for the necessary amendments to be made as a priority.”