Last week, Chancellor Rishi Sunak outlined plans for firms to be offered a £1,000 “job retention bonus” for every furloughed employee kept on until the end of January 2021. The considerable expenditure this additional scheme will incur, estimated to be in the region of £9.4bn has attracted both praise and criticism. HMRC chief Jim Harra has expressed concerns of a ‘dead weight’ cost to the scheme, while the Institute for Fiscal Studies have highlighted that the scheme will provide funds to support jobs which would have returned anyway. Nevertheless, Sunak and the Treasury are pressing forward, claiming that the bonus will “serve as a significant incentive” to preserve jobs.
A majority of the public (55%) approves of the new job retention bonus, with just 15% disapproving. The scheme is strongly supported by those who voted for both major political parties in the 2019 General Election: 59% of Conservative voters and 57% of Labour voters approve of the bonus.
Although public approval of financial support for businesses during the current economic uncertainty may be expected, it is clear that respondents are strongly divided about the potential effectiveness of the scheme. Only a slight plurality (38%) of the UK public think the policy will be effective in encouraging businesses to take their employees off furlough. Over a third (35%) do not think it will be effective. A significant minority (27%) ‘don’t know’ whether they think the policy will be effective.
Interestingly, a strong plurality of those aged 18-24 (44%), 25-34 (46%) and 35-44 (44%) are confident that the scheme will be effective, which contrasts with the views of middle aged and older people – just 34% of 45-54 year olds, 32% of 55-64 year olds and 32% of 65+ year olds think the scheme will successfully encourage businesses to take their employees off furlough. The clear differentiation in views based on the ages of respondent suggests that the groups more likely to have been furloughed are more optimistic about the policy than older people, who are less likely to be on furlough yet more likely to be making key decisions about how their organisation exits the furlough scheme.
Overall, it is clear that a section of the population shares Harra’s concerns that some firms will claim the bonus regardless of whether they had already intended to retain staff. Some members of the public may also be alarmed that the Treasury has not produced any model of how many jobs it hopes to protect through the bonus scheme, which has drawn criticism from opposition parties. Redfield & Wilton Strategies will continue to monitor public opinion on the Treasury’s economic intervention as the furlough scheme begins to wind down.