The retail chain is believed to have shunned the huge payout announced by the chancellor last week as he tries to bring the UK economy back after COVID-19. Primark furloughed 30,000 staff during the coronavirus lockdown.
The retail outlet has reportedly burned through £800million of cash during the pandemic but made profits of more than £900million the previous year.
Primark’s decision to reject the money from the Treasury will put pressure on other businesses to follow suit.
The Sunday Times reported William Hill has also rejected the bonus payments.
During Mr Sunak’s mini-budget announcement last week, he announced new measures to prop up the economy amid fears over a looming recession.
Primark rejects Rishi Sunak’s staff payout
Primark furloughed 30,000 staff during lockdown
He revealed every business which brings back one of the 9 million furloughed employees and keeps them working until January will receive £1,000 even if they were back at work before the policy was introduced.
VAT is expected to be slashed from 20 percent to five percent for the hospitality industry until January.
Stamp duty is also being axed on all homes worth up to £500,000 until March.
The government will also be subsidising up to 50 percent of people’s meals in restaurants from Monday to Wednesday through August, to a maximum of £10 per head.
Rishi Sunak announced new scheme to boost economy
Mr Sunak said during interviews after the budget announcement: “Throughout the crisis I’ve had decisions to make and whether to act in a brand way at scale and at speed or to act in a more targeted and nuanced way.
“In an ideal world, you’re absolutely right, you would minimise that dead weight and do everything in incredibly targeted fashion.
“The problem is the severity of what was happening to our economy, the scale of what was happening, and indeed the speed that it was happening at demanded a different response.”
The IFS think tank argued the majority of Mr Sunak’s bonus scheme was likely to go to businesses that do not need it.
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Changes to the furlough scheme
Director Paul Johnson said: “A lot, probably a majority, of the job retention bonus money will go in respect of jobs that would have been, indeed already have been, returned from furlough anyway.
“This money will go even in respect of jobs which were briefly furloughed, are already back at work and can expect to be still back at work in January, the employer still gets £1,000.
“Much of the VAT cut and the stamp duty cut will be deadweight but that may be fine if they have a significant behavioural consequence.”
During lockdown, benefit claims soared by a record 1.6 million after the economy was halted, a bigger year-on-year rise than during the Great Depression in the 1930s.
William Hill will also not take the money
Mr Sunak was praised for his switch and decisive action by introducing the furlough scheme allowing employees to still receive 80 percent of their salary during lockdown.
Although concerns about a second spike in the virus, resulting in another national lockdown, have been raised, Mr Sunak is moving forward with plans to end the furlough scheme.
The scheme will now run until the end of October but the government will cut the 80 percent rate down to 60 percent from August.
Last month, the chancellor said: “Until the end of July there will be no changes whatsoever.
Rishi Sunak’s furlough scheme to end in October
“Then from August to October, the scheme will continue for all sectors and regions of the UK but with greater flexibility to support the transition back to work.
“As we reopen the economy we need to support people back to work.
“Between August and October, the scheme will continue but with greater flexibility to support people back to work.
“We will share the cost of paying people’s salaries.”
Published at Sun, 12 Jul 2020 09:57:00 +0000