Furlough scheme extension until October
Chancellor Rishi Sunak has confirmed a furlough scheme extension until October, following speculation about the viability of the government support.
Employers can continue to claim back a percentage of wages for workers on furlough, with workers receiving 80% of their salaries up to a maximum of £2,500 a month.
However, employers will need to share the costs of this furlough scheme extension from August.
This means workers will not see any changes to the amount they are paid while on furlough, but employers will have to contribute more to their wages.
Details will be published later this month of how this cost-sharing will work.
The Chancellor confirmed that 7.5 million workers in the UK are currently furloughed, up from 6.3 million last week.
Another change the Coronavirus Jobs Retention Scheme will be the ability for employees to return to work on a part-time basis from August while remaining partially on furlough.
Furlough scheme extension
Announcing the furlough scheme extension, the Chancellor said:
I can announce today that the Job Retention Scheme 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.
Ahead of the announcement, there was widespread speculation that the level of support would be cut to 60% of wages from the end of June.
Welcoming the furlough scheme extension, TUC general secretary Frances O’Grady said:
We are pleased ministers have listened to unions and extended the job retention scheme to the autumn. This will be a big relief for millions.
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% is a win for the pay packets of working families.
As the economic consequences of Covid-19 become clear, unions will keep pushing for a job guarantee scheme to make sure everyone has a decent job.
CBI director-general Dame Carolyn Fairbairn called for more details and asked for ministers to be flexible in their approach if there is a second wave of the virus. She said:
Extending the furlough to avoid a June cliff-edge continues the significant efforts made already and will protect millions of jobs.
Introducing much-needed flexibility is extremely welcome. It will prepare the ground for firms that are reawakening, while helping those who remain in hibernation. That’s essential as the UK economy revives step-by-step, while supporting livelihoods.