Staff should be allowed to return to work while furloughed to help improve the chances of their employer’s business of surviving the Covid-19 crisis, small businesses have said.
In an open letter to chancellor Rishi Sunak, business owners said that while the job retention scheme had helped businesses avoid layoffs, the current plan meant employers were “just kicking that can down the road”.
“When your tap stops, we expect many SMEs will no longer exist, and if they do, they won’t be able to afford to employ these people again,” the letter read.
The government is currently mulling ways to phase out the current scheme, which is due to run until the end of June. One option being considered is reducing the amount paid from its current level of 80 per cent of salaries.
But the small business warned this approach could still lead to widespread layoffs or huge pay reductions as struggling businesses will be unable to top up salaries.
Instead, they called for furloughed workers to be allowed to return to work while the Treasury’s current scheme is in place to help boost their employer’s revenue and improve their chances of weathering the economic downturn.
A survey commissioned by London-based Volcano Coffee Works, lead signatory on the letter, found almost three-quarters of furloughed employees feared their employer’s business would close due to Covid-19, while 59 per cent were worried they would be made redundant even if the business survived.
However, 86 per cent of these workers said they were willing to work while furloughed to improve their chances of making it through the lockdown.
“This is not about SME’s wanting more, it’s about us wanting to work together to do more,” said Emma Loisel, co-founder and chair at Volcano Coffee Works.
“Britain is already bearing this huge cost, but today it’s a sunk cost, instead it could become the greatest investment into our economy’s future. In starting this campaign and writing the open letter to the chancellor, we’re asking him to allow the workers he is already paying for to return to work and contribute to Britain’s future.”
Theadora Alexander, co-founder of Young Foodies, which co-signed the letter, said allowing furloughed staff to return to the workforce was a “no-brainer”.
“It makes no sense for the government to restrict people from supporting their employers, effectively putting the breaks on the economy and making it harder for businesses to recover.”
Ministers have said that the current scheme, which has so far seen 6.3m workers furloughed at a total cost of £8bn, will be extended beyond the end of June if needed.
The government is reportedly also considering a phased ending of the scheme that could allow some staff to return to work part time.
Officials have held talks on the process this weekend, with chancellor Rishi Sunak expected to lay out his plan as early as this week.