Industry reacts to Govt’s Job Retention Bonus

The Chancellor announced the launch of the ‘Job Retention Bonus’ yesterday as part of the Government’s emergency measures to tackle coronavirus.

Rishi Sunak’s economic statement revealed the Government will pay firms £1,000 for each furloughed employee that returns to work, provided each employee earns at least £520 per month and remains in work until January 2021.

Given over 9.1 million jobs have been furloughed, however, this could cost the exchequer at least £9.1bn, according to Schroders senior European economist and strategist, Azad Zangana.

“A £1,000 bonus per member of staff is unlikely going to make a difference for firms that are no longer economically viable, either due to social distancing restrictions or changing behaviours,” Zangana commented.

“Some firms may now temporarily bring back staff only to collect the bonus and let them go in January, but the majority of the bonus payments will go to firms that had planned to bring back their staff in any case.

“The policy changes announced today will do little to boost wider demand in the economy. The Chancellor may have to return with more measures in the near future.”

Responding to the announcement, chair of the Chartered Institute of Taxation tax policy and oversight committee, John Barnett, praised the creation of the Coronavirus Job Retention Scheme (CJRS), and was hopeful the bonus could build on the scheme already in place.

“We hope that HMRC can build on their expertise in creating the CJRS grant claim portal by adapting it to deliver the Job Retention Bonus to employers next February too,” he said.

“They have been rightly praised for their speedy and effective delivery of the CJRS and self-employed schemes, but this has been at the cost of delays in other parts of HMRC’s work. We are concerned that, without extra resources, the delays now being suffered may continue into 2021.

“It appears that the bonus will be available for any employee who has been furloughed at any point, not just those still on furlough at the end of the CJRS. This is generous, but understandable, as otherwise it would provide an incentive to employers to keep people on furlough until the very end rather than bringing them back to work.”

Trades Union Congress general secretary, Frances O’Grady, suggested the Government’s support should instead have been more targeted to help the sectors worst affected by COVID-19.

“Mass unemployment is now the biggest threat facing the UK, as shown by the thousands of job losses at British Airways, Airbus and elsewhere,” she commented. “The Government must do far more to stem the rising tide of redundancies. We can’t afford to lose any more good skilled jobs.

“The Chancellor should have announced targeted support for the hardest-hit sectors like manufacturing and aviation. Struggling businesses will need more than a one-off Job Retention Bonus to survive and save jobs in the long-term.”

    Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


NEW BUILD IN FOCUS - NEW EPISODE OF THE MORTGAGE INSIDER PODCAST, OUT NOW
Figures from the National House-Building Council saw Q1 2025 register a 36% increase in new homes built across the UK compared with the same period last year, representing a striking development for the first-time buyer market. But with the higher cost of building, ongoing planning challenges and new and changing regulations, how sustainable is this growth? And what does it mean for brokers?

The role of the bridging market and technology usage in the industry
Content editor, Dan McGrath, sat down with chief operating officer at Black & White Bridging, Damien Druce, and head of development finance at Empire Global Finance, Pete Williams, to explore the role of the bridging sector, the role of AI across the industry and how the property market has fared in the Labour Government’s first year in office.


Does the North-South divide still exist in the UK housing market?
What do the most expensive parts of the country reveal about shifting demand? And why is the Manchester housing market now outperforming many southern counterparts?



In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance, to explore how regional trends are redefining the UK housing, mortgage and buy-to-let markets.

The new episode of The Mortgage Insider podcast, out now
Regional housing markets now matter more than ever. While London and the Southeast still tend to dominate the headlines from a house price and affordability perspective, much of the growth in rental yields and buyer demand is coming from other parts of the UK.

In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance.