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John Lewis joins Primark in decision not to claim from Sunak's furlough bonus scheme

Tony Diver
·3-min read
John Lewis has already announced it will close eight stores - TOBY MELVILLE /REUTERS
John Lewis has already announced it will close eight stores - TOBY MELVILLE /REUTERS
Coronavirus Article Bar with counter
Coronavirus Article Bar with counter

The retail giant John Lewis will reject the Chancellor’s offer of £1000 for every furloughed worker brought back to the shop floor, following similar announcements from Primark and the bookmakers William Hill, The Telegraph has learnt.

John Lewis, which furloughed 14,000 shop workers at the start of the crisis, is not expected to collect any money from the Treasury’s job retention bonus, announced last week by Rishi Sunak, the Chancellor.

The retailer has already announced eight of its 50 stores will not reopen after the pandemic, following a slump in sales over the period it was forced to close its doors.

Major stores will close in Birmingham and Watford, smaller stores in Heathrow airport, St Pancras train station, plus At Home shops in Croydon, Newbury, Swindon and Tamworth.

Other stores are in the process of a “phased reopening”, and the company hopes to have the rest of its stores open in the coming weeks.

Wes Streeting, Labour’s Shadow Exchequer Secretary to the Treasury, warned John Lewis’s decision could mean more job losses are on their way.

“I think the fact that John Lewis are not taking part in the job retention bonus scheme and at the same time are floating the closure of stores and the inevitable job losses that will follow underline exactly why the Institute for Fiscal Studies described the job retention bonus as a poorly targeted and deadweight cost,” he said.

“The Government should be focussed on keeping people in work and avoiding job losses but it’s not yet clear the job retention bonus will do that.

“The risk is it hands over significant sums of money to firms that don’t need it.

“Where companies don’t need to access the scheme and choose not to, that’s welcome, but there may well be some companies at the margins where this would make a big difference.”

William Hill, the bookmaker, and Primark became the first companies to reject Mr Sunak’s jobs retention bonus over the weekend.

Primark said it would not claim any money because it had already removed employees from the furlough scheme when its stores reopened.

The Chancellor’s scheme is expected to cost the Treasury around £8bn, with the Government paying out for the return to work of many of the 9.4 million UK workers who were furloughed because of the pandemic.

Labour questioned whether Mr Sunak’s scheme offered value for money for taxpayers after Jim Harra, the Chief Executive of HMRC, told the Treasury he would require ministerial direction for the policy.

“The advice that we have both received highlights uncertainty around the value for money of this proposal...I am unable to reach a view that this represents value for money to the standards expected by MPM [Managing Public Money],” he said.

Mr Sunak said there were "compelling reasons" to justify the introduction of the programme and issued the order for it to continue.

On Thursday, the Chancellor admitted some of the £1,000 bonuses will be "dead weight" because they will pay companies who were going to bring workers back anyway.