Rishi plots end of furlough ... butpledges no cliff edge
RISHI Sunak last night signalled plans to phase-out the Government’s furlough scheme which has supported workers through the coronavirus outbreak.
The Chancellor said it is not “sustainable” for taxpayers to continue to pay the wages of millions of workers in the longer term. But he promised there will be no “cliff-edge” cut-off to the support measure which was introduced a fortnight ago.
Government figures showed that 6.3 million workers are on the scheme, which is due to run until the end of June, at a cost of £8billion to the taxpayer.
Mr Sunak said: “To anyone anxious about this, I want to reassure them that there will be no cliff-edge to the furlough scheme.
“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.
“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.”
The Government scheme pays 80 per cent of the monthly wages of employees unable to work because of the coronavirus crisis – up to the value of £2,500.
It is designed to stop firms that are unable to operate under lockdown from laying off staff.
Torsten Bell, chief executive of
the Resolution Foundation think tank, which proposed the job retention scheme, said the high cost was a price worth paying.
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 worth paying.
“Even despite mass furloughing, unemployment is still soaring, with over two million new claims for benefits coming though.”
Alan Lockey, head of the Royal Society for the Encouragement of Arts, Manufactures and Commerce’s future work centre, said: “There is an estimated 27 per cent of the workforce on furlough.
“If those people were made redundant the level of unemployment would rocket to levels not seen since the Great Depression.”
He added: “The Government’s response so far has been robust but it must avoid going back to ‘business as usual’ if it’s to avoid prolonged unemployment on whole swathes of the population.”