Chancellor pledges no “cliff-edge” end to furlough scheme

Chancellor pledges no
Chancellor Rishi Sunak (Image: Dominic Lipinski/PA Wire)
// Chancellor Rishi Sunak promises no “cliff-edge” cut-off to the government’s furlough scheme
// MPs were looking at ways to wind down the scheme & ease people back into work
// Figures showed that 6.3m workers were having 80% paid by the Treasury at a cost of £8bn to the taxpayer

Chancellor Rishi Sunak has promised there will be no “cliff-edge” cut-off to the government’s furlough scheme to support workers through the coronavirus pandemic.

The latest government figures showed that 6.3 million workers were having 80 per cent of their salaries, up to a maximum of £2500 per month, paid by the Treasury at a cost of £8 billion to the taxpayer.

Speaking to ITV News, Sunak acknowledged such a level of expenditure was not “sustainable” in the longer term.


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However, rather than bring the scheme to an abrupt stop at the end of June, Sunak said ministers were looking at ways to wind down the scheme and ease people back into work in a “measured way”.

“To anyone anxious about this, I want to reassure that there will be no cliff-edge to the furlough scheme,” he said.

“I’m working as we speak to figure out the most effective way to wind down the scheme and ease people back into work in a measured way.

“As some scenarios have suggested, we are potentially spending as much on the furlough scheme as we do on the NHS for example.

“Clearly that is not a sustainable situation which is why, as soon as the time is right, we want to get people back to work and the economy fired up again.”

The news comes after the Liberal Democrats called for a “tapered” end to the programme, which consists of the Treasury paying 50 per cent of salaries for the first month after people return to work, falling to 30 per cent after the third month before employers pick up the full bill after the fourth.

“The government furlough scheme has done a good job at helping thousands of businesses through the lockdown, but the shadow of lockdown will be long, and the ‘new normal’ will be extremely challenging,” acting Lib Dem leader Sir Ed Davey said.

“Businesses and their staff need time to plan, and confidence the government will be there, ready to support.”

Torsten Bell, chief executive of the Resolution Foundation think tank which proposed the job retention scheme, said that despite the high cost to the taxpayer, it was a price worth paying.

“The 6.3 million jobs being furloughed shows in stark terms the scale of the economic shutdown that Britain is living through,” he said.

“If this kind of volume of workers stay on the scheme for several months, the cost will run into the tens of billions of pounds. And that is a cost very much worth paying.

“Even despite mass furloughing, unemployment is still soaring, with over two million new claims for benefits coming though.

“This should remind us how badly needed the retention scheme is, but also that we are likely to be living with the legacy of high unemployment that coronavirus has given Britain, long after it has been phased out.”

with PA Wires

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1 COMMENT

  1. Re Furlough
    I have a solution on how furlough, at £8 billion per month, could be extended by the Government. Cancel HS2 immediately and have enough cash to furlough for at least a year.
    Who needs a return 25 minute train journey for £700 (likely in todays money)?
    Rather keep millions of UK jobs through covid-19 than a project driven by pride. In the case of the Government and HS2, I am afraid ‘pride goes before a fall’.

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