Government furlough scheme extended to October, Rishi Sunak announces

The job retention scheme where the UK Government is currently paying the wages of 7.5m employment contracts has been extended by four months, the Chancellor has announced.

Tuesday, 12th May 2020, 1:08 pm
Updated Tuesday, 12th May 2020, 1:32 pm

Workers who have been furloughed by their companies, where work has dried up due to the coronavirus crisis, will be able to remain on the payroll until October, but Rishi Sunak said after the initial end date of July, businesses will have to take more of the strain of paying wages.

It comes after thinktank the Resolution Found previously warned the scheme could cost between £30 - £40bn and it was reported the scheme would taper to paying 60 per cent of wages and then lower still.

But Mr Sunak confirmed in the Commons that workers would not see any further drop in their pay below the 80 per cent already offered, as employers make up the difference.

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Chancellor Rishi Sunak. Photo: PA

And he also said companies would be able to bring their staff back on a part-time basis.

Mr Sunak told the Commons: “Full details will follow by the end of May, but I want to assure people today of one thing that won’t change. Workers will through the combined efforts of Government and employers continue to receive the same level of overall support as they do now at 80 per cent of their current salary up to £2,500 a month.

“I’m extending the scheme because I won’t give up on the people who rely on it. Our message today is simple: we stood behind Britain’s workers and businesses as we came into this crisis, and we will stand behind them as we come through the other side.”

Mr Sunak’s announcement came as new analysis puts the coronavirus death toll at just over 40,000, following new figures on care home deaths released by the Office for National Statistics (ONS).

This includes deaths from Covid-19 and where it has been mentioned on the death certificate as a factor.

Shadow chancellor Anneliese Dodds said many were taken aback by comments attributed to Government officials suggesting people need to be “weaned off an addiction” to the furlough scheme.

She said she had only heard about the Chancellor’s changes “in the last few seconds” and will examine them “very, very carefully”.

Ms Dodds said people do not want to be furloughed, adding: “It’s critically important they are not penalised for that choice. We welcome the flexibility mentioned, we’ve asked for this repeatedly.”

Mr Sunak replied: “The use of the word ‘addiction’ is not one I have ever used and not one I agree with.

“Nobody who is on the furlough scheme wants to be on this scheme. People up and down this country believe in the dignity of their work, going to work, providing for their families, it’s not their fault their business has been asked to close or asked to stay at home.

“That is why I established this scheme to support these people and their livelihoods at this critical time.”

Reacting to the announcement, British Chambers of Commerce Director General Adam Marshall said: “The extension of the Job Retention Scheme will come as a huge help and a huge relief for businesses across the UK.

“The Chancellor is once again listening to what we’ve been saying, and the changes planned will help businesses bring their people back to work through the introduction of a part-time furlough scheme. We will engage with the Treasury and HMRC on the detail to ensure that this gives companies the flexibility they need to reopen safely.

“Our research shows that the scheme has become a key part of wider government support for businesses, with more than 70 per cent of firms surveyed furloughing a portion of their staff.

“Over the coming months, the government should continue to listen to business and evolve the scheme in line with what’s happening on the ground. Further support may yet be needed for companies who are unable to operate for an extended period, or those who face reduced capacity or demand due to ongoing restrictions.”

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