Chancellor set to extend furlough scheme, but reduce payments

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Chancellor set to extend furlough scheme, but reduce payments
Chancellor Rishi Sunak last week warned the furlough scheme was not "sustainable" at its current rate although he promised there would be no "cliff edge" cut-off. (Image: PA Wires)
// Chancellor Rishi Sunak is expected to announce an extension to the furlough scheme
// It might continue to September, although payments would be cut from 80% of salary to 60%
// The current scheme ends at the end of June

Chancellor Rishi Sunak is expected to announce an extension to the job retention scheme under which the government subsidises the wages of workers temporarily laid off due to the coronavirus lockdown.

At least 6.3 million people are currently having up to 80 per cent of their salaries paid by the taxpayer under the furlough system at a cost of some £8 billion.

Sunak has previously said he was preparing to “wean” workers and businesses off the programme – which currently runs until the end of June – but calls have been made for it to be prolonged.


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It has been reported the programme could continue until September, although the rate of support will be cut from a maximum of 80 per cent of salary to 60 per cent.

Meanwhile, MPs are to set out guidance on how people can travel safely on public transport as the coronavirus lockdown begins to ease.

The coronavirus death toll in the UK stood at more than 32,000 when the Prime Minister said on Sunday that he wanted those who cannot work from home to start returning to their workplaces from Wednesday.

Sunak last week warned the furlough scheme was not “sustainable” at its current rate although he promised there would be no “cliff edge” cut-off.

Torsten Bell, chief executive of the Resolution Foundation think tank and an early advocate of the scheme, said it should be phased out gradually.

“Moving too quickly could spark a huge second surge in job losses at a time when unemployment already looks set to be at the highest level for a quarter of a century,” he said.

“This policy has made a huge difference in this crisis. It now needs careful and gradual change to ensure the benefits it has provided are secured rather than squandered.”

Meanwhile, the managing director of leisure operator GLL, Mark Sesnan, has suggested any tapering should be looked at on a sector-by-sector basis.

“Industries such as leisure and hospitality (should be) protected,” he said.

“This is because, in order to adhere to social distancing guidelines, we will have to operate at a significantly reduced capacity.

“In turn, this will have a major impact on the number of staff able to return to work fully.”

Johnson has said he did not expect a sudden “flood” of people heading back to work following Monday’s publication of the UK Government’s “road map” for lifting lockdown restrictions.

However, this prompted a barrage of questions as to how it could be achieved amid warnings the government is watering down its clear “stay at home” message.

Speaking at the daily Number 10 press briefing on Monday, Johnson said the measures – including allowing unlimited outdoor exercise – were mere “baby steps”.

He warned the government stood ready to reimpose controls if there was any sign of the transmission rate of the virus picking up again.

Meanwhile the TUC welcomed the publication of government guidance on how workplaces can be made “Covid-secure” as they re-open.

Employers – including factories and construction sites – will be required to carry out a risk assessment before they can resume.

This followed criticism by unions that Johnson had issued his return-to-work call in his broadcast on Sunday without explaining how it could be safely achieved.

with PA Wires

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