Coronavirus: Furlough changes could be 'difficult' for NI firms

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There are many businesses, particularly small businesses, which are still slipping through the cracks

By Jayne McCormack
BBC News NI Political Reporter

Changes to the government's furlough scheme could be "incredibly difficult" for some NI firms, the economy minister has warned.

Chancellor Rishi Sunak has set out details of how employers will be asked to help pay the wages of workers on the scheme.

Employers will have to start making "modest contributions" from August, increasing in September and October.

That could harm NI's hospitality and retail sector, Diane Dodds said.

The job retention scheme has allowed employers to temporarily lay off staff while the government pays 80% of their salaries up to £2,500 a month during the crisis.

The chancellor had previously extended the scheme until October.

In August, employers will pay national insurance contributions and pension contributions, in September they will start to pay 10% of their workers' salaries, to make up a total of 80%.

This salary contribution will rise to 20% in October.

Mr Sunak said: "As we begin to re-open our country and kickstart our economy, these schemes will adjust to ensure those who are able to work can do so, while remaining amongst the most generous in the world."

In Northern Ireland, the Department for Economy estimates 200,000 people could be on the scheme, out of 8.4 million workers covered across the UK.

Speaking at the executive's daily press conference on Friday, Mrs Dodds said she had spoken to many businesses across Northern Ireland that indicated how reliant they were on the scheme, in order to continue operating.

Asking firms to contribute more towards their employees' wages would be "incredibly difficult" in some sectors, which are already uncertain about when they can reopen or function fully.

The NI Executive has called for greater flexibility around the scheme too, added the minister.

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Conor Murphy said it was still too early in recovery to taper the furlough scheme

Finance Minister Conor Murphy described Mr Sunak's announcement as coming too early in the attempted economic recovery from the pandemic.

"While I welcome the extension of the self-employment scheme the tapering of the job retention scheme from August is premature," he said.

"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."

Last week, First Minister Arlene Foster said she had "real concerns" about what will happen to some workers in NI when the scheme ends.

Mrs Dodds also said she understood the concerns of hotels in Northern Ireland, who have been advised they can provisionally begin to take bookings again from 8 June - but have not been provided with a date for when they can actually reopen.

Ministers to review hotels timetable

"I understand the need for an indicative date for when they can open, I have raised concerns that our hotels are at a competitive disadvantage to the Republic of Ireland and Great Britain, who have already started to take bookings," she said.

"Ministers have agreed to give this matter further consideration and provide a further update next week."

She said it would also apply to touring caravan sites and bed and breakfast accommodation.

The minister also repeated the executive's new public messaging relating to the response against coronavirus - shifting away from "stay at home".

She said it would focus on two themes from now on: "Stay safe, save lives, and work safe, save lives."

People should still continue to work from home where they can, added Mrs Dodds.

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