Furlough scheme extended to October

Today, the chancellor has announced that the government’s job retention scheme will continue to cover the costs of wages for furloughed workers until the end of October.

This support for furloughed workers and employers will now be extended into the autumn months with 80 per cent of wages up to £2,500 being covered by the Treasury-backed scheme.

It had been thought and widely reported that the chancellor was planning to scale back the furlough scheme such that it meant only 60 per cent of wages would be covered from July. However, today it was clarified that “There will be no reduction in the level of support for those on the scheme,” said the chancellor of the exchequer Rishi Sunak in a statement to the House of Commons.

However, Mr Sunak has now made clear that the government intends to see a full four fifths of the wages of millions of furloughed employees continue to be covered up to £2,500 a month.

The chancellor said there will be no changes to the existing scheme until the end of July, after which a greater degree of flexibility will be incorporated into the system and employers will be expected to contribute to their staff’s salaries.  

The chancellor said that approximately 7.5 million jobs and over a million businesses have been supported by the job retention initiative so far, which came into effect following the nationwide lockdown and the emergency measures relating to the coronavirus crisis.

The job retention scheme currently specifies that employees do not do any work at all for their employers whilst being furloughed. However, the option of having people work on a part-time basis while still being partially furloughed is set to be incorporated into the scheme’s revised structure from August onwards.

The general secretary of the Trades Union Congress (TUC) Frances O’Grady, welcomed Mr Sunak’s latest announcements on the government’s plans for the furlough scheme, stating, “this will be a big relief for millions”.

“We are pleased ministers have listened to unions and extended the job retention scheme to the autumn,” she said.

“Changing the rules to allow part-time working is key to enabling a gradual and safe return to work. And maintaining the rate at 80 per cent is a win for the pay packets of working families.”

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