Rightmove and Compass say no to job retention bonus

Image copyright
Getty Images

Image caption

Chancellor Rishi Sunak unveiled the bonus scheme earlier in July

Property website Rightmove and catering giant Compass have said they will reject the offer of millions of pounds in payouts from the government’s job retention bonus scheme.

They follow Primark and John Lewis in shunning the bonus, which pays firms £1,000 for each furloughed worker they keep on past January.

It is meant to help stop a spike in joblessness when wage support programmes end in October.

But some firms say they do not need it.

It comes as MPs and economists warn that job retention bonus money could be claimed for staff that would have been returned from furlough anyway.

‘Fortunate position’

Rightmove, which furloughed 160 employees after the coronavirus crisis hit, would have been eligible to claim £160,000 in bonus payments had it applied.

However, it said: “Now that the housing market has reopened across all parts of the UK we’re in a fortunate position that by the end of July all of our furloughed employees will be back at work, and therefore we will not need to make use of the furlough bonus scheme.”

Some 21,000 Compass staff are currently on furlough – around half of its workforce – meaning it could have claimed up to £21m.

Earlier this month, fashion retailer Primark promised to sacrifice a £30m payout after saying the bonus was unnecessary under “current circumstances”.

Fashion retailer Asos, holiday park operator Center Parcs and retailer John Lewis are among others to have said they will not use the scheme.

Value for money?

Some 9.4 million workers are currently having 80% of their wages, up to £2,500 a month, paid under the government’s furlough scheme. However, there are fears unemployment could top 11% after the programme is wound down.

Earlier in July, Chancellor Rishi Sunak announced the bonus scheme as part a package of measures designed to prevent this outcome. However, if every furloughed worker returned to their jobs, it could cost the public purse more than £9bn in bonus payments – something that has fuelled scrutiny of the policy.

The most senior civil servant at HM Revenue and Customs, Jim Harra, wrote to Mr Sunak this month, raising doubts over whether the policy offered value for money.

And MPs on the Treasury select committee last week echoed warnings from economists that the scheme could risk funnelling money to already-rich companies.

Mr Sunak rejected the criticisms, saying he believed the bonus would “serve as a significant incentive” to preserve jobs amid the pandemic.

A Treasury spokesman told the BBC: “It’s great to see employers getting their staff back to work and protecting jobs without needing to draw on the extra support the job retention bonus offers, and we welcome the decision of businesses to do so.

“For those who do need further support, the £1,000 bonus will represent a significant benefit to them and make a difference to those people in the nine million jobs currently furloughed who can be brought back to their jobs.”