Bank of England governor advises the government to amend its plans for the CJRS
23 September 2020
Andrew Bailey, governor of the Bank of England has urged the government to “stop and rethink” how it ends the Coronavirus Job Retention Scheme (CJRS), which is due to close at the end of October 2020.
Whilst speaking on a webinar, he suggested that there are certain sectors that will require additional help, as some firms will struggle to carry on employing staff when the scheme ends, leading to a sharp increase in unemployment. This contrasts with his statement back in August, when he confirmed that he backed the ending of the scheme, indicating that workers should be helped to move on, as opposed to remaining in unproductive jobs. However, he has now shown that he is receptive to further intervention by the government to help protect employment.
The BBC reported that Mr. Bailey had said that the CJRS “has been successful”. He also stated:
"We have moved from a world of generalised employment protections, to specific and focused areas..
[Furlough] has helped manage the shock, to firms and to labour [but now] the use of it, as far as we can tell, is more concentrated.
I think it is therefore sensible to stop and rethink the approach going forward, without any commitment to what that might be."
It is thought that approximately 30% of private sector employers were making use of the CJRS at the peak of the pandemic, but now the heaviest reliance on it is in industries including hospitality, retail and culture.
Mr. Bailey’s comments were made a mere matter of hours prior to prime minister, Boris Johnson, announcing new restrictions in England, implemented to attempt to stop the spread of coronavirus, as it is feared that a ‘second wave’ is incoming.
The information in this article is accurate at the time of publication. For all the latest information, news and resources on how the COVID-19 pandemic is affecting payroll professions, visit our Coronavirus hub.