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18/10/2021

Business Column: If Covid restrictions are to remain . . . so, too, should the furlough scheme

Chief executive of Derry Chamber of Commerce, Paul Clancy, on the ending of the furlough scheme

Business Column: If Covid restrictions are to remain . . . so, too, should the furlough scheme

Derry city centre resembled a 'ghost town' when Covid-19 retrictions were first introduced.

Paul Clancy is the chief executive of Derry Chamber of Commerce. With the furlough scheme set to end this week and a number of Covid-19 restrictions remaining in place, he argues until businesses can operate without restrictions the scheme should be retained.

At the beginning of the pandemic in March 2020, immediate thoughts turned to how businesses could stay afloat and how jobs and incomes could be protected.

The UK Government, to its credit, moved rapidly and put in place the Coronavirus Job Retention Scheme, better since known as the furlough scheme.

As of this month, over 11.6 million workers across the UK have been furloughed at one time or the other, with the government supporting up to 80% of their wages in order to protect jobs and avoid widespread destitution.

Sixty-six billion pounds has been spent by the Exchequer on the furlough scheme, a testament to the government’s commitment to protecting livelihoods and protecting businesses.

However, the decision to wind down the scheme this month and remove the furlough safety net appears premature and may leave businesses and employees in the lurch.

With coronavirus restrictions still in place in Northern Ireland, and no date set in stone yet for the removal of all remaining restrictions, businesses here are not operating with full freedom and full flexibility. If pandemic restrictions persist, then pandemic protections should also.

Executive Ministers, including the First and Deputy First Ministers, have recently made confusing and contradictory comments about the future of the pandemic and restrictions in Northern Ireland.

While the Economy Minister has shown an urgency and willingness to set a date for the lifting of all remaining restrictions, the First Minister recently dampened these expectations while the Deputy First Minister refused to rule out future lockdowns or so-called ‘circuit breakers.’

The continued confusion and uncertainty over restrictions is bad for business, bad for employers, bad for workers, and bad for the wider economy. The last thing the business community needs after 18 long months is the threat and anxiety of another deeply damaging lockdown.

Until we get to a stage where we can fully operate and live without restrictions, however, pandemic protections like the furlough scheme must remain in place. Other countries like Germany and the Republic of Ireland are extending their wage subsidy schemes well into 2022.

At a time when global finance and borrowing rates are extremely cheap for national governments, this is not the right point to be unwinding supports for businesses or workers.

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