Primark ‘rejects Rishi Sunak’s £30million bonus for bringing back staff from furlough’ amid pressure on other firms to shun the payouts
- Primark likely to reject £30million bonus for bringing straight back furloughed staff
- Rishi Sunak announced £9billion payments for firms in mini-Budget last week
- Chancellor admitted funding will head to many companies already up and running
Primark is likely to reject around £30million in ‘bonuses’ from the government for bringing straight back furloughed staff, it emerged today.
The retail chain will reportedly shun the huge payout unmasked by Rishi Sunak the other day as that he desperately battles to avoid a wave of redundancies.
The firm had furloughed 30,000 staff and is believed to have burned through £800million of cash during the coronavirus crisis – but made profits in excess of £900million the prior year.
The move will heap pressure on other companies to turn down the £9billion handouts from the Treasury, which the Chancellor admits will go to many companies which are already straight back up and running after lockdown.
According to the Sunday Times, William Hill has joined Primark in rejecting the bonus payments.
Primark will reportedly shun the huge payout unveiled by Rishi Sunak last week as he desperately battles to prevent a wave of redundancies
Mr Sunak used his mini-Budget last week to announce more extraordinary steps to prop up the economy.
Every business that brings back among the 9million furloughed employees on a decent wage and keeps them on the books until January will also get £1,000 – even when they were already back at the office before the policy was introduced.
VAT is being slashed from 20 % to 5 per cent for the hospitality industry until January in yet another huge intervention – and stamp duty is being axed on all homes worth up to £500,000 until March.
There can be a £2billion ‘kickstarter’ scheme to pay wages for teenagers, and the federal government is subsidising up to 50 per cent of people’s meals out at restaurants from Monday to Wednesday all through August, to a maximum of £10 per head.
In interviews after his mini-Budget last week, Mr Sunak admitted there could be some ‘dead weight’ of wasted public spending from the bonus scheme for businesses who bring back fuloughed workers.
He said ‘there has been dead weight in every of the interventions we’ve put in place’.
‘Throughout this crisis I’ve had decisions to produce and whether to act in a broad way at scale and at speed or even to act in a more targeted and nuanced way,’ Mr Sunak said.
‘In a great world, you’re absolutely right, you would minimise that dead weight and do every thing in incredibly targeted fashion.
‘The problem may be the severity of that which was happening to our economy, the scale of what was happening, as well as the speed that it had been happening at demanded another response.’
Mr Sunak (pictured visiting a Wagamama restaurant in London last week) admitted there would be some ‘dead weight’ of wasted public spending from the bonus scheme for companies who recreate fuloughed workers
The respected IFS think-tank said the majority of the bonus scheme was likely to head to businesses who did not want it.
‘A lot, probably a majority, of the job retention bonus money will go in respect of jobs that will have been, indeed already have been, returned from furlough anyway,’ director Paul Johnson said.
‘This money will go even in respect of jobs which were shortly furloughed, already are back at the office and can expect you’ll be still back at the office in January, the employer still gets £1,000.
‘Much of the VAT cut and the stamp duty cut will undoubtedly be deadweight; but that may be fine if they have a significant behavioural consequence.’
MailOnline has contacted both Primark and William Hill for comment.