People are praising fashion giant Primark for refusing to accept £30m of taxpayer money for bringing furloughed employees back to work.
Rishi Sunak announced last week that the government will pay businesses £1,000 per employee returned to work after the furlough scheme ends in October as an incentive for businesses to retain their workforce.
Primark placed 30,000 employees on furlough during coronavirus lockdown, meaning that they could receive around £30m in bonuses.
But their owner, Associate British Foods, said that Primark bosses don't think claiming the money is necessary.
The company removed its employees from government employment support schemes in the UK and Europe in line with the reopening of the majority of its stores. The company believes it should not be necessary therefore to apply for payment under the bonus scheme on current circumstances.
Shops like Primark have been open since 15 June, with furloughed employees already returned to work.
Sunak's scheme has been criticised for failing to distinguish between wealthy companies like Primark and those that desperately need government money in order to retain jobs for their employees.
Labour leader Keir Starmer said the money won't reach "the areas that most need it".
Our concern is the action they've taken isn't focused on the right places, so the Jobs Retention Bonus is a bonus for all jobs and many of those jobs, many of the people would have been brought back in any event.
Some are really at risk of losing their jobs, so we say it should have been targeted in the areas that most need it.
The scheme was also harshly criticised by Jim Harra, chief executive of HMRC and the Treasury's principle accounting officer.
In an open letter to Sunak, he questioned the "efficiency" of the measure, saying it did not represent "value for money".
Lots of people respect Primark's "smart move" of refusing to participate in the scheme.
Respect to Primark for this. Hope other corporates follow suit and money is reallocated to where it’s desperately n… https://t.co/kb6TpGB2Hy
— FunkLip is Well-T (@FunkLip is Well-T)
I rarely applaud Primark but this very good & sensible. £1000 bonus from the govt is a not a good scheme and doesn’… https://t.co/WfvZjLC2Ay
— PG tips South 🇪🇺🔶🇫🇷 🌹🇬🇧🌈🌿 (@PG tips South 🇪🇺🔶🇫🇷 🌹🇬🇧🌈🌿)
business sometimes gets a bad rap in this country but John Lewis and Primark turning down the Treasury’s multimilli… https://t.co/9BNxHcHDMI
In turning down the government's handout for reinstating their furloughed workers, Primark could help pressure other corporate giants to do the same – saving millions in taxpayers's money.
Of course, we don't know exactly why Primark turned down the cash. But the enormous amount of money the government offered them, simply for doing something they had in fact already done, highlights the flaws in Sunak's job retention scheme as he fails to differentiate between large corporations and struggling small businesses.