A gap between the start of Wales’ lockdown and the UK government’s new Job Support Scheme is a “significant barrier” for firms trying to survive, a business group has said.
A scheme to cover 67% of wages is not due to start until 1 November – just over a week after the firebreak starts.
The Federation of Small Businesses (FSB) urged the UK and Welsh governments to work together.
The Treasury said employers could use furlough until the end of October.
“There is no gap in funding between our schemes,” a spokesman said.
However, CBI Wales director Ian Price warned some people may fall between the cracks of furlough and the new Job Support Scheme (JSS).
Chancellor Rishi Sunak has declined to bring the JSS forward, but the Welsh Government said it offered to pay the difference in the cost of wage support of bringing the JSS forward a week.
The Welsh Government wrote to Mr Sunak asking if firms could access the scheme a week earlier.
In a letter to Mr Drakeford, Mr Sunak said he was “unable to bring the claims date for the expansion to the Jobs Support Scheme forward from 1 November to 23 October due to limitations in HMRC delivery times”.
He said employees who have been furloughed for at least three consecutive weeks in the past can be re-furloughed until 31 October.
However, people who have never been furloughed will not be covered during the remainder of the Job Retention Scheme, the official name of the furlough scheme.
But they will be eligible for the new Jobs Support Scheme from 1 November.
The firebreak, which will see pubs, restaurants, cafes and non-essential shops shut, is due to start on Friday.
Conservative Welsh Secretary Simon Hart has accused First Minister Mark Drakeford of taking a decision that would cause people to lose their jobs.
What is the Job Support Scheme?
The JSS plans to cover 67% of workers wages in businesses that have been forced to close.
It pays up to a maximum of £2,100 a month and staff must be off for seven days to be eligible. Payments are due to begin in December.
It replaces furlough, which ends on 31 October and covered 80% of pay, with government paying 60% and employers 20%.
‘It’s an absolute dog’s dinner’
Pubs, bars, restaurants and cafes have only been allowed to serve customers indoors since restrictions were lifted on 3 August.
From Friday they will close again, as the firebreak lockdown begins, and remain shut for 17 days.
Alistair Darby, CEO of brewery and pub chain Brains, which employs 1,400 people in Wales, said the pumps were being switched off again.
Mr Darby told Radio Wales more clarity was needed from the Welsh Government to stop businesses from trying to plug a wage gap, at a time no money was coming in.
“We have got to work out how to communicate to our staff what’s going to happen to them, and what support they are going to get in three days,” he said.
“It’s an absolute dog’s dinner.
“We’ve done everything that was asked of us to support the government in the fight of coronavirus… if they are going to shut us down again they need to do their bit and fast.”
‘We’ve only been open weeks’
The Bell at Skenfrith, Monmouthshire, was badly damaged after being flooded twice during storms in October and February.
After being unable to get builders on site during the pandemic, the hotel only reopened on 4 September, and is now having to close again.
Landlady Sarah Hudson said: “We’ve only been open weeks, it’s devastating.
“We were fully booked, we’ve had to cancel guests again… it’s really upsetting, it really doesn’t do much for our reputation as either flooded or shut down.”
Ms Hudson said she was determined for the business to survive, but did not want to have to take out any more loans: “I feel very much on my own.”
What have business groups said?
image copyrightGetty Images
Ben Cottam of FSB Wales urged the UK government to “urgently respond” to Welsh Government’s request and said the offer to pay the cost of the extension was a “practical response”.
“The current one-week gap between the beginning of lockdown on the 23 October and the beginning of the Job Support Scheme is a significant barrier for businesses who are working incredibly hard to stay afloat,” he said.
“In order to inspire confidence in businesses at this difficult time, as well as help minimise uncertainty and remove as many of the hurdles that firms will be facing as possible, we urge UK and Welsh Government to work together in order to make this happen”.
Mr Price said: “It appears that some people may unfortunately being falling through the cracks of the JRS and JSS.
“It’s imperative for business, government and employees that we make this work.”
A Welsh Government spokesperson said: “We offered to pay the UK Government the difference in the cost of wage support of bringing the Job Support Scheme forward a week instead of relying on the Job Retention Scheme… The Chancellor declined this offer.”
On Monday, Mr Hart said the Welsh Government knew “full well” it was not possible for the Treasury to bring forward the JSS before announcing the lockdown.
He said the lockdown announcement was “very, very unfair” on people “caught by the time gap” before the start of the JSS.
But Plaid Cymru said it was a “question of fairness”.
Liz Saville Roberts, MP for Dwyfor Meirionnydd, said: “A firebreak gives us the opportunity to buy more time to build up a resilient test, trace and isolate system.
“But for that to work, the UK government must also do its part by giving appropriate financial support.”
What has the UK government said?
image copyrightPA MediaA Treasury spokesman said: “Employers in Wales can use the furlough scheme until 31 October to help them through this difficult period and can then get support through our new Job Support Scheme from 1 November.”
A UK government source said the chancellor called all finance ministers before the announcement of the expansion of the scheme to explain how it would work, when it would come into effect and that it would be UK-wide.
He asked finance ministers to keep restrictions as consistent as possible across the devolved nations, the source said.
