Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect of the increase of employers' contributions to the Coronavirus Job Retention Scheme from 1 July 2021 on businesses that remain closed due to covid-19 restrictions.

From 1 July 2021, employers will be asked to make a small contribution of ten per cent of wages for hours not worked, as announced at Spring Budget when the scheme was extended to the end of September.

This is the same approach that the Government introduced last summer, where comparable restrictions were in place. It is right to continue with the existing timetable to reintroduce employer contributions, in order to strike the right balance between supporting the economy as it opens up and ensuring incentives are in place to get people back to work as demand returns. The labour market is also in a stronger position, with 5.5 million fewer people on furlough than in April 2020, and online job vacancy levels in mid-June about 27 per cent above February 2020 levels.

At March Budget 2021, the Government deliberately went long and erred on the side of generosity; specifically to accommodate short delays to the roadmap, such as this. Most of the Government’s schemes do not end until September or after, in order to provide continuity and certainty for businesses and families.

Businesses that have legally remained closed or effectively cannot operate can continue to benefit from the Government’s £2 billion of discretionary grant funding for local authorities in England, a UK-wide recovery loan scheme, business rates relief, enhanced Time to Pay for taxes, and support for paying deferred VAT. These businesses will also have recently benefitted from Restart Grants of up to £18,000 and the £25 billion grant support that has been made available throughout the pandemic.