Government extends furlough scheme until October

Chancellor Rishi Sunak announcing the extension of the furlough scheme until October in parliament on 12 May 2020.

The UK government’s furlough scheme, which pays the wages of workers on leave because of coronavirus will be extended to October, the chancellor Rishi Sunak confirmed today. Sunak said that employees will continue to receive 80% of their monthly wages up to £2,500 but told MPs that the government will ask that firms start sharing the cost of the scheme from August.

The number of workers covered by the scheme is currently 7.5 million, a figure the government expects to rise. From August the furlough scheme will be maintained across all sectors and regions of the country, but it will be more flexible to help support an orderly transition back to work. Sunak said that this flexibility would mean that employers currently using the scheme would be able to bring furloughed employees back part-time.

Speaking in parliament today, Sunak said: “I'm extending the scheme because I won't give up on the people who rely on it. Our message today is simple: we stood behind Britain's workers and businesses as we came into this crisis, and we will stand behind them as we come through the other side.”

The scheme is being widely used in the construction sector, with many leading contractors, consultants, surveyors and architects accessing it. Sunak’s announcement that the furlough scheme is to be extended is a clear indication of the government’s concern about the short-term prospects of the UK economy and a further sign that any return to business as usual is a long way off yet.

The chancellor’s announcement was welcomed by business organisations and trade unions alike, with both the British Chambers of Commerce and the TUC describing the move as a big relief for millions of workers. 

Labour also welcomed the chancellor's move. Shadow chancellor Anneliese Dodds said: "The furlough scheme is a lifeline for millions. The government was right not to pull it away. 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 1 August onwards, there is a very real risk that we will see mass redundancies.”

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