Thousands of new starters still falling through cracks of coronavirus job retention scheme, campaigners say

New starters say recent Treasury announcement is ‘smoke screen being sold as a solution to thousands’

(10 Downing Street/AFP via Getty)

Thousands of new starters are still falling through the cracks of the government’s coronavirus job retention scheme despite a recent update from the Treasury, campaigners have told The Independent.

Announcing the unprecedented programme last month to combat the economic fallout from Covid-19, chancellor Rishi Sunak said employers can claim a grant covering 80 per cent of wages for a furloughed worker – to a maximum of £2,500 per month.

To qualify, workers had to have been on their company’s payroll before 28 February – three weeks before Boris Johnson announced a UK-wide lockdown, ordering pubs, restaurants and other social venues to close their doors.

Following a backlash from workers who had just started new roles, or were due to do so, the Treasury announced on Wednesday it had extended the cut-off date to 19 March, insisting that over 200,000 extra people would now benefit from the scheme.

However, the campaign – New Starter Furlough – which lobbied for the expansion of the scheme told The Independent the alteration was a “smoke screen being sold as a solution to thousands” and initially gave many workers false hope.

While thousands will benefit, a caveat contained in the Treasury’s guidance made clear that employees “must have been notified to HMRC through an RTI [Real Time Information] submission notifying payment in respect of that employee” on or before 19 March – the day before the scheme was announced by Mr Sunak.

“The amendment of the cut-off date was welcomed by the New Starter Furlough campaign but the addition of the RTI submission requirement has rendered this victory mute for the majority of campaigners,” the group added.

“As referenced by Martin Lewis [Money Saving Expert], 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.”

They continued: “While we appreciate that this amendment to the [job retention scheme] 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 – from a poll conducted within our group, this change has meant just five per cent have no become eligible.”

“Ultimately, our demand is clear. The government must amend eligibility criteria for the job retention scheme in order to include the thousands of new starters that were not on payroll with their new company on 19 March, but had a contractual agreement with them. Evidence can be submitted to HMRC for scrutiny in order to minimise the possibility of fraudulent claims.”

Anneliese Dodds, the shadow chancellor, told The Independent it was “very concerning” many new starters are still missing out on the scheme – despite the changes made to the date by the government.

“The gaps in schemes like this one are a particular problem in the UK because of how little of people’s previous earnings are covered by universal credit, far less than unemployment support given in other countries,” she said.

“Labour will continue to raise this and other issues with the government, as we need to do all we can to protect jobs and incomes during this crisis.”

Ed Davey, the acting co-leader of the Liberal Democrats, added: “Treasury ministers have failed to grasp how unfair their new furlough scheme is to new starters.

“Liberal Democrats have produced a workable scheme – our ‘new starter furlough scheme’ – would really help the vast majority of people who have fallen through this huge whole in the chancellor’s plan.

“The chancellor must ensure people get the help they need, and that requires him rolling our real support for new starters, as well as many self-employed people not entitled to support, or to large numbers of businesses who can’t get the loans they were promised. We are facing the possibility of an economic downturn of historic proportions, there is no excuse not to.”

John McDonnell, the former shadow chancellor, initially claimed the Treasury alteration was a “victory”, but later added: “People expressing their concern that if you explore the small print of this announcement is not as wide ranging as the government claims and there are still many not helped by this.”

The Treasury rejected the accusation of a “smoke screen”, and in a response, a government spokesperson said: “Our coronavirus job retention scheme is protecting thousands of jobs up and down the UK – with the government covering 80 per cent of the salary of furloughed workers.

“By extending eligibility to those employees take on up until 19 March, we are offering support for thousands more, whilst keeping the significant fraud risks under control.”

Mr Sunak also announced on Friday the government was extending the scheme by a month until the end of June to reflect the three-week extension of the lockdown announced by the foreign secretary Dominic Raab at a No 10 press conference earlier this week.

He said: “With the extension of the coronavirus lockdown measures yesterday, it is the right decision to extend the furlough scheme for a month to the end of June to provide clarity.”