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.”
The New Starter Justice campaign is calling upon MPs to pledge their support for an Early Day Motion which recognises the loopholes in the Coronavirus Job Retention Scheme. The EDM, started by Angela Crawley of the SNP, draws attention to the “lack of support” for new starters, and “urges the Chancellor to close the loopholes and extend the furlough scheme” to those who have been missed.
It comes as an open letter addressed to Chancellor Rishi Sunak attracts more than 4,000 supporters, including a number of prominent MPs. Released on Saturday, the open letter calls Sunak’s proposed solutions for new starters “wholly inadequate” and criticises the Chancellor for leaving the cracks in the Job Retention Scheme “open and ignored”. The letter is accompanied by a video in which new starters call for the same support as other workers: “we secured our new jobs before lockdown, we had written offers, we signed our contracts… now we need them to count”.
Speaking on behalf of New Starter Justice, organiser Natalie Greenway said: “Through our open letter, we are now calling on Rishi Sunak to come through on his promise and fill the cracks in the CJRS so that no worker has to suffer poverty or hardship unnecessarily. We appreciate the extraordinary challenge the Chancellor was faced with when creating a scheme of this size, however he has proven himself that there is still time and capacity to make much needed amendments to support those who need it. He has been silent on this matter for too long, and our concern for the future has become our unavoidable reality. The devastating impact of this issue is hitting the households of over a million families right now.”
Both the open letter and the Early Days Motion call for an alteration of how new starters qualify for the scheme—namely, removing the cut-off date of 19 March and instead allowing new starters to submit proof of employment to guarantee eligibility for furlough. “Our members may be in a variety of different situations, yet we all have something in common: contractual proof of employment”, the letter stated. “We have offer letters. We have tax records. 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”. Similarly, the EDM “recognises the Government’s aim to combat fraudulent claims through use of a cut-off date, but suggests other methods of doing so, such as submission of employment contracts.”
As of the morning of April 27, the open letter had 4,205 signatures, with a range of MPs adding their names and putting weight behind the cause. Zara Sultana, MP for Coventry South, joined the call for justice for new starters, saying “no worker should be left behind through this crisis”, while Apsana Begum, MP for Poplar and Limehouse, tweeted that she “fully supported” the letter and acknowledged that there had been “weeks spent campaigning” for the cause.
Also signing were Kate Osborne, MP for Jarrow, and Andy Burnham, Mayor of Greater Manchester. Osborne stated: “too many people are being left behind and the government needs to act”. Burnham called the letter “powerful” and said that he “fully supported the call” of New Starter Justice for an amended job retention scheme.
Other signatories include John Mcdonnell, MP for Hayes and Harlington, Fleur Anderson, MP for Putney, Helen Mary Jones of Plaid Cymru, Mike Amesbury, Shadow Minister for Housing and Planning and Paul Dennett, Mayor of Salford. Presenter Jeremy Vine and MP Rushanara Ali also tweeted their support for the campaign.
New Starter Justice estimates that more than a million new starters have been excluded by the March 19 cut-off date to the furlough scheme, with 350,000-500,000 excluded workers within the hospitality sector alone. Other heavily affected sectors include construction, retail and travel & tourism.
Natalie Greenway continued: “The members of New Starter Justice are skilled, experienced and committed workers who have found themselves unemployed and unsupported for the first time in their working lives. These people deserve fair treatment from the government, and we will continue to fight until the this is achieved.”
New Starter Justice is campaigning for anyone who slipped through the cracks of the Coronavirus Job Retention Scheme, and consists of around 8,000 active members. The campaign has been covered on Channel 4 News, The Martin Lewis Money Show and BBC Money Box, as well as in the national press including the BBC and the Times. Anyone who has been affected or wants to support the campaign can get in touch via Facebook or Twitter.
The open letter and video can be found here, and supporters are strongly encouraged to sign using the link. Online media outlets please feel free to embed the video.
A wide variety of case studies are available upon request, including individual stories from specific areas and sectors. Please get in touch for more information.
New Starter Justice estimates that between 1.5 million and 2.3 million people are affected by the loophole in the CJRS. It reached this estimate via internal polls of members and using existing data which indicates that between 350,000 and 500,000 hospitality workers are excluded from the scheme.
Further information, interviews, comment and case studies are available on request. Please contact Natalie Greenway on 07519728072 or Becky Kells on 07306199422, or email email@example.com
FIRST PRESS RELEASE [20TH APRIL]
“Misleading” job retention scheme update will help less than 5% of those affected.
An estimated 1.5 million people due to start a job after February 28 will not be eligible for the Coronavirus Job Retention Scheme—despite a recent government change extending the cut-off date to March 19.
The government claimed this new date would make 200,000 people eligible for furlough under the scheme. However, research by campaign group New Starter Justice and polls carried out by money expert Martin Lewis show that the majority of new starters will not be helped by this change.
The government changed the fine print of the scheme to include anyone on their employer’s PAYE payroll on or before 19 March 2020, as determined by Real Time Information (RTI) submitted to HMRC on or before this date. But 95% of respondents to an internal poll by New Starter Justice said that they would not be eligible for furlough even with the amended cutoff date. A poll carried out by Martin Lewis found that most companies (92%) submit RTI 1-10 days before payday—which is at the end of the month for the majority (70%). So even employees who started a job before 19 March—in some cases, as early as February—are unlikely to appear in payroll data until after this date.
New Starter Justice has described the latest amendment as a “smoke screen” and has pledged to keep fighting for those excluded by the scheme. In a statement, the campaign group called upon the government to “amend eligibility criteria for the Job Retention Scheme to include the thousands of new starters that were not on payroll with their new company on the 19th March, but had a contractual commitment with them.” Campaigners also expressed concern that the extension of the scheme—now due to end in June—would leave new starters without income for another month, but expressed hope that a longer scheme would give the government more time to make crucial changes to it.
The Coronavirus Job Retention Scheme was initially proposed with a cutoff date of 28 February. Thousands of new starters have been left without income as a result of this date, and had their job offers withdrawn or postponed, because their new employers cannot claim their furlough pay from the government.
Natalie Greenway, a New Starter Justice organiser, said: “The April 15 update on the Coronavirus Job Retention Scheme was a smoke screen being sold as a solution for thousands. The amendment of the cut-off date was welcomed by the New Starter Justice Campaign but the addition of the RTI submission requirement has rendered this victory mute for the majority of campaigners. As referenced by Martin Lewis, the majority of businesses complete their RTI submissions 1-2 days before payroll; and as the most common pay date in the UK is month end, many new starters had not been registered with HMRC prior to the 19th.
“Whilst we appreciate that this amendment to the CJRS will have helped a small proportion of new starters, the changes have simply not gone far enough. There are too many people being left to fall through the cracks in the support scheme set out by Rishi Sunak and the Treasury.
“The government’s statistic claiming 200,000 workers have now been made eligible is misleading. We would like to know what this figure is based on.
“Our demand is clear. The government must amend eligibility criteria for the Job Retention Scheme to include the thousands of new starters that were not on payroll with their new company on the 19th March, but had a contractual commitment with them. Evidence can be submitted to HMRC for scrutiny in order minimise the possibility of fraudulent claims.”
SNP Westminster leader Ian Blackford initially tweeted: “this will make a massive difference to many” as a first reaction to the scheme. However just 4 hours later he conceded that “the announcement on retention is not what it is cracked up to be.”
Virendra Sharma, Labour MP for Ealing Southall, called for Chancellor Rishi Sunak to amend the scheme: “I still haven’t heard back from you on #newstarterfurlough [sic] They have worked and paid taxes but through no fault of their own are being let down. You said no one left behind—make that true.”
Martin Lewis said: “it’s likely far less than the 200,000 official number eligible will actually be helped. Some saw their new jobs fall through before starting. Others were due to start after that date, or will’ve been on the payroll too late. And as furlough is absolutely at an employer’s discretion, there will be many who have no work and are eligible who aren’t helped.”
Reporting on the New Starter Justice campaign for Channel 4, Jackie Long said:
“The government argued an additional 200,000 people would now be eligible for the furlough scheme. Experts say that number simply cannot be correct. Tens and tens of thousands will still be excluded.
“So many of the people who aren’t eligible for this scheme are people who have always worked, always paid their taxes and who had always done the right thing”