Decision helps 7.5m workers
Sunak extends furlough scheme to end of October
Rishi Sunak: ‘no cliff edge’
UPDATE: Chancellor Rishi Sunak has extended the scheme to pay the wages of more than seven million furloughed workers until the end of October and at the current rate of 80% of salary.
Mr Sunak said the current scheme will remain the same until the end of July, but from August to October there will be “greater flexibility” with employers expected to share the cost.
The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month.
“Employers will be able to bring furloughed employees back part-time. We will ask employers to share the costs of paying people’s salaries,” he said.
“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% of their current salary up to £2,500 a month.”
The Government will also explore ways to support furloughed workers who wish to do additional training or learn new skills during this period.
The Treasury is currently spending between £10b and £14bn a month underpinning wages while workers are temporarily on leave from their jobs.
About 7.5 million workers – a quarter of the workforce – are now covered by the scheme, up from 6.3 million last week.
Dame Carolyn Fairbairn, CBI Director-General, said: “Firms will, of course, want more detail on how they will contribute to the scheme in the future and will work with Government to get this right.
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– Adam Marshall, BCC
“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.”
The Coronavirus Job Retention scheme, which has helped almost 800,000 employers, has been hailed by Prime Minister Boris Johnson as a unique feature of the global response to the coronavirus pandemic.
“It is unlike anything seen internationally, with 6.5 million people currently being supported. It is absolutely right that we should do it,” he said last night.
“One of the most salient and important features of this country’s response to this crisis so far is that we have looked after some of the lowest-paid people in our society – the hardest-working people – and we will continue to do so.”
However, Mr Sunak last week promised that there would be no “cliff-edge” for businesses to face when the scheme is brought to an end – but he confirmed that the Treasury was looking to “wind down” the programme because its cost to the taxpayer was not “sustainable”.
Mike Cherry, chairman of the Federation of Small Businesses, said: “The Government has stepped-up with a raft of support mechanisms to help them through.
“The vast majority of small employers have furloughed staff and they’re telling us loud and clear that the ability to do so on a part-time basis as we move towards recovery will be key to keeping their operations afloat.