Furlough scheme extended to October with wage support shared by government and employers
12 May 2020, 10:10 | Updated: 12 May 2020, 13:04
UK chancellor extends furlough scheme for four months
The Furlough scheme will be phased out as people go back to work.
The chancellor has announced an extension to the furlough scheme today.
An estimated 6.5 million laid-off employees are currently using the taxpayer-funded programme, which is paying 80% of their earnings up to £2,500 per month.
But while Rishi Sunak previously said he was preparing to “wean” businesses off the scheme, he has now extended it from June to October to help them ease back into operation.
Speaking to the commons, the chancellor announced "there will be no changes to the scheme whatsoever" until the end of July.
However, from August to October there will be "greater flexibility to support the transition back to work" which means employers will be able to bring furloughed employees back part-time.
He stated that employers will then start sharing, with the government, the costs of paying people’s salaries with further details revealed towards the end of this month.
Rishi Sunak added: "Workers will, through the combined efforts of government and employers, continue to receive the same level of support as they do now, at 80% of their salary, up to £2,500."
1/ The job retention scheme will be extended, for four months, until the end of October.— Rishi Sunak (@RishiSunak) May 12, 2020
By that point, we will have provided eight months of support to British people and businesses. Until the end of July, there will be no changes to the scheme whatsoever. pic.twitter.com/gQznY4c2Ir
2/ From August to October the scheme will continue, for all sectors and regions of the UK, but with greater flexibility to support the transition back to work.— Rishi Sunak (@RishiSunak) May 12, 2020
Employers currently using the scheme will be able to bring furloughed employees back part-time.
3/ We will ask employers to start sharing, with the government, the costs of paying people’s salaries.— Rishi Sunak (@RishiSunak) May 12, 2020
4/ Further detail will follow by the end of May but I want to assure people one thing won’t change:— Rishi Sunak (@RishiSunak) May 12, 2020
Workers will, through the combined efforts of government and employers, continue to receive the same level of support as they do now, at 80% of their salary, up to £2,500.
Prime Minister Boris Johnson praised the scheme earlier this week, all-but confirming it would be continued through the summer.
He told MPs: “It has been one of the most assailant, the most important feature of this country’s response so far to this crisis - that we have looked after some of the lowest paid in our society, the hardest working people and we will continue to do so.”
Boris Johnson reveals his end of lockdown plan in-full
Mr Sunak also stated last week that the scheme was not “sustainable” but he is working towards a gradual phasing out.
He told ITV: “I’m working, as we speak, to figure out the most effective way to wind down the scheme and to ease people back into work in a measured way.”
Meanwhile, ministers will soon be issuing guidance on how people can travel to and from work safely on public transport in the coming weeks.
Under recent government advice, a form of facial covering, such as a homemade cloth covering, should be worn “in enclosed spaces where social distancing is not always possible”.
The PMs 60 page document says: “If you can, wear a face covering in an enclosed space where social distancing isn’t possible and where you will come into contact with people you do not normally meet."