By Grahame Anderson
The Chancellor Rishi Sunak has announced an extension to the coronavirus job retention scheme now running until the end of October. This means furloughed staff will continue to have their wages paid at 80 per cent up to £2,500 per month, and not cut to 60 per cent as previously speculated in some parts of the media.
Speaking In The Commons
Speaking in the Commons on Tuesday he said: “Nobody who is on the 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 or asked to stay at home.
“That is why I established this scheme to support these people and their livelihoods at this critical time.”
Mr Sunak told the house seven-and-a-half million employees were being supported through the scheme, with nearly a million businesses also benefiting from the government’s help.
It’s estimated this unprecedented scheme has so far cost the government well over £8billion and counting each month.
In essence, this takes the state funding of business by a British Government up to eight months – something not seen before in our history.
Last week Mr Sunak had warned the furlough scheme was not “sustainable” at its current rate although he promised there would be no “cliff edge” cut-off.
Clearly, there’s been a re-think with the Chancellor rejecting suggestions some people might get “addicted” to furlough if it was extended.
Asking Employers To Share
After July, employers currently using the scheme will be able to bring furloughed employees back part-time. The government however, will ask firms to “start sharing with them, the costs of paying people’s salaries”.
The original plan was to prepare to “wean” workers and businesses off the programme before it was due to end in June. Mr Sunak has eventually bowed to calls to have the scheme prolonged.
Shadow chancellor Anneliese Dodds has said: “It is welcome that the Chancellor has heeded the call by Labour, trade unions, and businesses for more flexibility in the scheme, to support employees to go back to work part-time.
“The government must clarify today when employers will be required to start making contributions, and how much they’ll be asked to pay. If every business is suddenly required to make a substantial contribution from the 1st August onwards, there is a very real risk that we will see mass redundancies.”