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Covid: Furlough extension backlash after Welsh firebreak snub

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image copyrightGetty Images

image captionWhat will the new rules for Wales be when the firebreak ends?

Extending furlough mid-way through Wales’ firebreak is “not fair at all”, the first minister has said.

Mark Drakeford said Chancellor Rishi Sunak rejected his requests to boost subsidies for wages when Wales went back into lockdown.

“I got an answer quickly to say that was not possible for a number of technical reasons and so no,” Mr Drakeford told BBC Radio Cymru.

The decision to extend furlough comes with England facing a new lockdown.

Eligible people in Wales will also benefit – as well as from a decision to extend mortgage payment holidays.

But the head of one business group said a lot of businesses had already made decisions in terms of redundancies, ahead of the furlough extension announcement.

The Treasury, which has been asked to comment, said previously that the UK government had provided billions in support to Wales.

It also said it could not extend furlough or bring forward its replacement, the new Job Support Scheme (JSS) to cover the period of Wales’ firebreak.

Mr Drakeford said: “Now when things change in England they change their minds about the furlough plan. And that’s not fair.”

Welcoming the extension of furlough, he added: “When we were asking it was impossible to do it. Now when they have made new decisions in England it is possible.”

His cabinet will meet on Sunday to discuss the impact of the month-long lockdown in England.

How will England’s lockdown affect Wales?

Wales’ firebreak will end on 9 November – and the date will not change as a result of the prime minister’s announcement on Saturday night, he said.

But the English lockdown “creates a new context”, Mr Drakeford said.

He used the example of pubs in Wrexham serving until 22:00 GMT after the firebreak while pubs in Chester are still closed.

If that attracts people over the border “is that going to create problems for the police in Wales?” he said.

Mr Drakeford said he raised the issue with UK Cabinet Minister Michael Gove on Saturday.

“He said it would be illegal for people in England to travel outside England during the lockdown period they will have,” said Mr Drakeford.

Health Minister Vaughan Gething told BBC Breakfast that England’s restrictions, as he understood them, meant “normal travel won’t be possible into England because of their four week decision”.

A new set of “national rules” across Wales is due to be announced on Monday.

What’s the furlough row about?

image captionNon-essential shops have been closed in Wales, as well as pubs, restaurants and hotels

The furlough extension has been a bone of contention between the Welsh and UK governments.

It was due to end on Saturday and be replaced with the new, less generous Job Support Scheme.

Mr Drakeford previously asked the Treasury to extend furlough for one week to coincide with the Welsh firebreak but his requests were turned down.

Mr Sunak also declined a request for the new Job Support Scheme (JSS) – which will cover 67% of wages when it replaces furlough – to be brought forward.

The Welsh Government said it had offered to pay the cost for the difference between furlough and the JSS, which a minister estimated was £11m.

Furlough is crucial for businesses. But @RishiSunak said he wouldn’t extend it in Wales when we asked.

He also said no when we asked him to bring forward the Job Support Scheme to help businesses – we even said we’d pay the difference. It’s now clear he could have said yes.

— Mark Drakeford (@fmwales) October 31, 2020

But on Saturday, the furlough scheme was extended until England’s lockdown ends on 2 December, which will include a return to the previous 80% level.

Under the scheme, the government pays 80% of the salaries of staff who were kept on by their employer while unable to work, covering wages of up to £2,500 a month.

The furlough extension and the English lockdown has to be approved by MPs – they will vote on the measures on Wednesday.

What has the reaction been?

Ian Price, Wales’ director of business group the Confederation of British Industry (CBI), said a lot of businesses had already made decisions in terms of redundancies, ahead of the furlough extension announcement.

“It won’t have stopped those decisions being made but I think it’ll ensure that not more people are made redundant during the month of November,” he told BBC Radio Wales’ Sunday Supplement.

Plaid Cymru MP Ben Lake said: “I welcome the chancellor’s swift action to support businesses in England, but it is regrettable that Welsh workers were not prioritised in the same way.

“People across Wales have been made redundant in recent days due to the UK government’s dithering.”

Meanwhile, Conservative member of the Senedd (MS), Andrew RT Davies, said society needed to learn to live with coronavirus and avoid lockdowns that harm the economy.

“I still don’t believe that a lockdown is the solution,” he told the BBC’s Politics Wales.

“Actually a lockdown is only introduced when governments have lost control of the situation and we have to accept that.”

‘Double whammy’

image copyrightMark Hadley

image captionNo go: Guests from England won’t be seeing able to travel to this Carmarthenshire holiday site for the next month

Mark Hadley says the England announcement – even with furlough – will hit his family’s holiday accommodation business hard.

They run a self-catering and guesthouse site in Llandovery in Carmarthenshire.

He said cancelled bookings at Llanerchindda Farm will now top £250,000 this year, due to Covid restrictions.

He said that was on an annual turnover of £340,000 – so it amounts to almost 75% of his business.

“Ninety-nine per cent plus of our business comes from England,” he said.

“Now that people will not be able to travel from England, it really means that we will be remaining pretty much closed right until the beginning of December at the very least.

“It’s a worst case scenario. We lost out the half-term weeks, which we cancelled over £20,000 of bookings over those two weeks and three weekends. 

“We missed out on that and now we’ll miss out again because we can’t get anyone coming from over the border. It’s a double whammy for us.”

image copyrightMark Hadley

image captionCovid cancellations have cost the family business £250,000 this year, says Mark Hadley, on the right with Martin and Lynn Hadley

Business support ‘minimal’

He said the problems he faces are being mirrored across the tourism and hospitality sector in Wales, but he understood governments both in Wales and the UK were under pressure to act.

“It’s such a difficult situation isn’t it? I can see there is a massive health agenda and a massive potential problem for the NHS. I would not like to be in their boat,” he said.

“Could it have been handled better? Well, maybe.”

Mr Hadley said he welcomed the extension to the furlough scheme during the England lockdown, as it meant his staff were “secure for now”.

But he added: “Support for business, although they make it out to be massive, it is minimal.

“For our compensation for the firebreak we’re guarenteed hopefully a £1,000 – possibly £3,000 if we get the discretionary top-up – but nobody in our local authority can tell me how they work that discretionary amount out.

“We will be out of pocket, there are no two ways about it.”

What are the different restrictions in the UK?

image captionPeople have been urged to stay at home and many shops and businesses have been closed in Wales’ firebreak

Non-essential shops and hospitality will have to close in England for four weeks, until 2 December.

But unlike the restrictions in spring, schools, colleges and universities will be allowed to stay open.

After 2 December, the restrictions would be eased and regions would go back to the tiered system, Prime Minister Boris Johnson said.

Elsewhere, Scotland’s new tiered system of restrictions will come into force at 06:00 on Monday.

In Northern Ireland, pubs and restaurants were closed for four weeks on 16 October with the exception of takeaways and deliveries. Schools were closed for two weeks.

Lohit Soundarajan

Founder , Editor Tech Guy #Voxguy

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