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Stormont and local business chiefs slam 'premature' wind down of furloughing scheme

The Chancellor's proposals for winding down the Covid-19 furlough scheme are premature, according to business and political leaders here.

Speaking in London on Friday, Rishi Sunak said the wage support scheme would begin to taper off from August, with employers asked to meet a proportion of its costs, and the scheme closing in October this year.

There is also to be a second phase of the support scheme for the self-employed, which will open for applications in August.

And from August employers will have to pay National Insurance and pension contributions for furloughed workers, and then 10% of pay from September, rising to 20% in October when the support scheme will be terminated.

Also, workers will be allowed to return to work part-time from July, but with companies paying 100% of wages for time at work.

But Stormont Finance Minister Conor Murphy said the Chancellor's move had come too early and risked unacceptable job losses.

Conor Murphy

Mr Murphy said: "The economic priority during this public health crisis is to protect jobs and the effort that has gone into this to date has been commendable.

"The economic recovery is still in its infancy and it will be some time before businesses are back to their pre-pandemic trading level. While I welcome the extension of the self-employment scheme, the tapering of the job retention scheme from August is premature.

"I am concerned it could lead to redundancies, particularly in the hardest hit industries such as hospitality, retail and leisure.

"I will be raising these issues with Treasury and stressing the need to protect jobs and livelihoods."

Economy Minister Diane Dodds also voiced fears over forthcoming changes to the furlough scheme.

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Economy Minister Diane Dodds

Economy Minister Diane Dodds

PA

Economy Minister Diane Dodds

"This would be incredibly difficult for some employers, particularly those in hospitality and retail sectors which have been closed for three months. It is uncertain whether they will get back to full operations for a number of months yet to come," she said.

Ann McGregor, chief executive of Northern Ireland Chamber of Commerce and Industry, said closing application to the scheme in June was too early.

Ann McGregor

"The furlough scheme has helped companies here preserve thousands of jobs through lockdown... but many firms still face significant uncertainty ahead," she said.

"On that basis, closing the scheme to new applicants in June feels premature, and risks undermining some of the work already done to preserve businesses and jobs.

"Whilst today's announcement is welcome, the Chancellor must also be open to additional and new support for those sectors that will stay closed the longest over the coming months."

Retail NI chief executive Glyn Roberts also expressed concerns over the Chancellor's plans.

"It is clear that the furlough scheme is being gradually phased out with more costs for employers from August," he said.

"Whilst this is not unexpected, it does significantly raise challenges for retailers in Northern Ireland who still do not have a date to reopen. The NI Executive's recovery plan does not provide significant sections of our retail sector with reopening dates.

"Many of these businesses currently have no income and will be concerned that by August they may be liable for ER NIC (employer National Insurance Contributions) and pension contributions.

"Retail NI wants to see a reopening timetable in June based upon medical evidence for the retail sector as a whole to avoid this problem."

Director of the Northern Ireland Retail Consortium Aodhan Connolly said: "A tapered end to the furlough scheme means that there will not be another huge shock to an industry which has suffered so much over recent weeks."

Belfast Telegraph