Furlough scheme extended to October with wage support shared by government and employers

12 May 2020, 10:10 | Updated: 12 May 2020, 13:04

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.

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Speaking to the commons, the chancellor announced "there will be no changes to the scheme whatsoever" until the end of July.

The Furlough scheme is being extended
The Furlough scheme is being extended. Picture: Getty Images

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."

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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.”

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."

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