140,000 firms apply for staff wages in first day of furlough scheme

More than 140,000 companies applied for financial help to pay staff in the first eight hours of the new coronavirus job retention scheme opening today, it has been revealed.

Chancellor Rishi Sunak has revealed 140,000 firms applied for furlough payments on the first day of the new scheme.

Chancellor of the Exchequer, Rishi Sunak, said money would now go to those who had applied within six working days, paying the wages of more than a million people who might otherwise have lost their jobs.

The new scheme funds 80 per cent of workers' wages, up to £2,500 a month, if they are put on leave by their employers as a result of the pandemic, and Mr Sunak said many more are expected to be "furloughed" due to the lockdown.

Sign up to our Politics newsletter

Sign up to our Politics newsletter

He added: "HMRC opened the Coronavirus Job Retention Scheme at eight o'clock this morning. As of four o'clock this afternoon, over 140,000 firms have applied and the grants they will receive will help pay the wages of more than a million people.

"A million people who if they hadn't been furloughed would have been at risk of losing their job. Firms applying today should receive their cash in six working days. HMRC will continue to provide updates on the number of people furloughed."

The Treasury has said the new system can process up to 450,000 applications an hour and employers had made 67,000 claims within half an hour of the system going live this morning.

However he refused to be drawn on the cost of the furlough scheme or whether it would be extended again. At the daily Downing Street press conference he said: "We don't have an estimate of take up yet - it's just the first day the scheme is open and I expect those numbers to continue to increase over the coming days."

On Friday, Mr Sunak announced that the wage subsidy scheme would be extended by a further month, until the end of June. The move came after the government confirmed that lockdown restrictions in the UK would continue for "at least" another three weeks.

He said it was" important to be clear" why the scheme had been introduced. "We've never seen an economic crisis like this one. Times like this demand we put aside ideology and orthodoxy, and the state turns to its immediate puropose - the protection and support of its people.

"The goal of the new schemes we've developed is to maintain as many poeple as possible in their existing jobs, to support viable businesses to stay afloat, and to protect the incomes of the self-employed to allow them to trade again, to maintain our economy's productive capacity so that we can bridge through this crisis. That is what we have done."

But he added: "This is a challenging period, we're not going to be able to save every job and business but I'm confident the measures we've put in place will allow us to come out of this and get back to normal as quickly as possible."

He said that the government had also been "sowing the seeds for the ultimate recovery" by "encouraging the businesses and jobs of the future".

He said a £500m Future Fund would be launched in May, to allow high growth companies to still access funds they need, from loans of between £125,000 and £5m whichwill see the government "match investments made by private investors on terms that protect the UK taxpayer". He said Innovate UK, the national innovation agency,was also providing £750m of grants and loans to tens of thousands of innovative firms across the UK.

Asked about extending loans scheme for small businesses he said he was not persuaded by a 100 per cent government-backed loan scheme.

"I'm not persuaded that moving to a 100% guarantee is the right thing to do," Mr Sunak said. "Some people have made some comparisons with what's going on in other countries, I think when you look at the totality of what we're doing it's more significant in scope and scale than most of those other countries.

"But if people are asking the question would that help speed up delivery of the loans then I'm very sympathetic to that and I also want to see that."

He said the latest data shows 12,000 loans have gone out to small businesses with an acceptance rate of around 80-90 per cent, and there have been 35,000 applications.

Earlier today HMRC chief executive Jim Harra told the BBC's Today programme that the government's tax arm had "scaled up" its IT system "to cope with the maximum number of claims that we could receive - there are well over two million Pay-As-You-Earn schemes and our system is big enough to handle a claim from every one of those."

He added: "The big payroll date this month is on the 30th, so employers can claim anytime today, tomorrow or on Wednesday, and there's time to get that money into their account for the 30th of April."

Mr Harra declined to predict how much the scheme would cost. Last week, the Office for Budget Responsibility estimated a price tag of £42bn, but that was before the government extended the scheme by a month.

The Chancellor also insisted the government was making improvements to ensure key workers get personal protective equipment (PPE). Mr Sunak said: "Absolutely everybody working incredibly hard on the front line deserves to have the equipment they need to do their jobs safely and we're working round the clock to make sure we can deliver on that.

"We're improving our sourcing internationally and domestically to make sure we can get the PPE we need in what is a very challenging international context.

"But people on the front line can rest assured that we're doing absolutely everything we can and straining everything we can to get the equipment they need."

He said 140,000 gowns had arrived today from Myanmar and the government was still working to end the delay of delivery of PPE from Turkey.