Relief as furlough extended
The furlough scheme paying 80 per cent of the salaries of around 6.3 million Britons will be extended until the end of October.
Chancellor Rishi Sunak has confirmed the UK government’s job retention scheme would be continued for another four months, following reports the scheme would be cut.
Chancellor Rishi Sunak yesterday confirmed the furlough scheme, which is paying the wages of millions of workers during the coronavirus lockdown, will be extended until the end of October.
He told the Commons the UK government’s job retention scheme (JRS) would be continued for another four months and that, as businesses get back to work, furloughed workers could be able to return on a part-time basis.
Around 6.3 million people currently have up to 80 per cent of their salaries paid by the taxpayer under the furlough system at a cost of some £8 billion.
There had been speculation that the financial support could be cut to 60 per cent as the Chancellor wanted to “wean” people and businesses off the scheme, but yesterday, responding to an urgent question from Labour’s shadow chancellor Anneliese Dodds, he said the JRS “will be extended for four months until the end of October. By that point, we will have provided eight months of support to British people and businesses.”
He said the government was doing everything it could to protect jobs and help those unable to work, describing the scheme as a “world-leading economic intervention”. He added: From August to October the scheme will continue for all sectors and regions for the UK but with greater flexibility to support the transition back to work.
“Employers currently using the scheme will be able to bring furloughed employees back part time and we will ask employers to start sharing with the government the cost of paying people’s salaries.”
While full details of changes will be revealed by the end of the month, he added: “One thing 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 this scheme because I won’t give up on the people relying on it. We stood behind businesses and workers as we came into this crisis and we will stand behind them as we come out of it.”
Addressing a point from Ms Dodds that government spokespeople had said people and businesses were “addicted” to the scheme and needed to be “weaned off”, he said: “The use of the word addiction is not one I have ever used or agree with.
“Nobody who is on this 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 and they’ve been asked to stay at home, that is why I established this scheme – to support these people and their livelihoods at this critical time.”
The announcement was welcomed by Scotland’s economy secretary Fiona Hyslop, particularly around more flexibility, but she said the detail of the changes around part-time work was vital.
“More clarity is required on the details in particular, what employers will be asked to contribute to the costs of the scheme, how any changes will relate to guidance on safer workplaces in each of the four nations, how workers in isolation will be supported and what additional support might be provided to industries, such as tourism and hospitality, facing specific difficulties,” she said. “I will be raising these issues with the UK government in the coming days.”
The extension was also cautiously welcomed by Citizens Advice Scotland, the Federation of Small Businesses Scotland and the CBI Scotland, though all said more detail on the changes around parttime returnees was needed.
However Scottish Green MSP Patrick Harvie said there was still too much uncertainty.