The First Minister says he is "deeply disappointed" that the Treasury has refused to bring forward the new UK Jobs Support Scheme as Wales heads into a two-week lockdown.
Mark Drakeford wrote to Chancellor Rishi Sunak calling for the change as part of his decision to introduce a 17-day "fire-break" in Wales from Friday, October 23.
The Jobs Support Scheme, which will start on November 1, will cover two-thirds of wages for businesses impacted by coronavirus restrictions.
It means as things currently stand businesses forced to close during the fire-break will have to apply for the furlough scheme (Job Retention Scheme) between October 23 and 31 and the new Enhanced Job Support Scheme from November 1.
The Welsh Government said it has offered to pay the £11m difference between the two schemes but the Treasury said it does not believe there is an issue. Officials have claimed that the new scheme will seamlessly replace the current furlough scheme.
Here is Mr Drakeford's letter in full to the Chancellor:
Dear Chancellor,
Thank you for your letter of October 19 replying to mine of October 16.
I am of course deeply disappointed with the response.
I am very concerned, as set out in my previous letter, that in the worst-affected sectors, leisure and hospitality, it is likely that many staff who will be laid off as a result of the necessary decision to close down all non-essential businesses from October 23 will not fulfil the eligibility criteria to be enrolled on the Job Retention Scheme (JRS) for its last week of operation.
Employers with no income will be faced with the difficult decision of paying all of the wage costs of these employees or making them redundant.
It makes no sense from the point of view of the UK Exchequer to have to meet the possible long-term costs of paying out-of-work benefits to these individuals for the sake of one week’s support on the JRS.
Will you therefore agree in these exceptional circumstances to waive the requirement for employees for whom JRS is claimed for this period to have been on furlough for at least three weeks prior to June 30?
Instead, could the qualifying criteria for the Job Support Scheme apply, ie. all employers with a UK bank account and a UK PAYE scheme registered on or before September 23, 2020, can claim provided a Real Time Information submission notifying payment to employees to HMRC has been made on or before this date?
I look forward to your response.
Best wishes,
Mark Drakeford
During Tuesday's coronavirus briefing for Wales economy minister Ken Skates said having two separate funding schemes would be confusing for businesses.
"I realise that having to access two different forms of support is far from ideal and that some businesses will struggle to take full advantage at this late stage of the Job Retention Scheme," he said.
"As the First Minister explained yesterday we pressed the chancellor to bring forward the new Job Support Scheme to ensure that all those working for businesses which are forced to close would receive financial support for all employees and would not have to access two schemes during the fire-break.
"We even offered to make up the difference between the funding for each employee under the Job Retention Scheme and the Job Support Scheme. But the UK Government has so far refused this offer.
"We are continuing to press the Treasury to do all they can to ensure employees and employers in Wales will benefit from UK Government support during the firebreak to the maximum possible extent."
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On Monday it was announced that an additional £150m would be injected into the third phase of the Welsh Government's Economic Resilience Fund.
This means there will now be nearly £300m of Welsh Government funding available to support businesses affected by the national lockdown.
Meanwhile, grants of £1,000 will be available to businesses eligible for Small Business Rates relief and occupying a property with a rateable value of £12,000 or less whether or not they are required to close.
And grants of £5,000 will be available to retail, hospitality, and leisure businesses required to close during the fire-break and occupying a property with a rateable value between £12,001 and £50,000.
Helen Mary Jones, Plaid Cymru's health spokeswoman, added: "I agree with the minister for economy that more support is needed from the Westminster Government and I can’t understand why the Chancellor can’t be flexible with the new government support scheme.
"However the Welsh Government should know by now that they cannot rely on Westminster and should be much more strongly demanding borrowing powers that would enable them to act for themselves."
