Chancellor Rishi Sunak has confounded expectations by extending the furlough job retention scheme to October at the same 80 per cent support level.
Rishi Sunak said there will be no changes to the furlough job retention scheme until the end of July, which covers up to 80 per cent of salary up to £2,500 a month.
From August part-time working from furloughed employees will be allowed, with employers picking up a greater percentage of the tab. Mr Sunak said that further details will be announced later his month. Giving the afternoon Downing Street press conference, business secretary Alok Sharma talked about a “shared effort” with businesses.
The chancellor left the door open for part-time furloughed workers to be allowed back before August, providing there was sign-up from unions and business associations.
Mr Sunak said that he expects the scheme to end by November. “Eight months of support is a considerable amount of time,” he said.
The chancellor said that the furlough scheme has helped 7.5m workers protect their jobs, with over 1m businesses being supported.
Mr Sunak said: “I’m extending this scheme because I want to help the people who need it.”
Shadow chancellor Annelise Dodds said that she’d been taken aback by press reports quoting officials saying that workers needed to be “weaned” off the job retention scheme.
Ms Dodds said: “We will look at these changes very carefully. I welcome the flexibility measures, but he needs to provide more information.”
The chancellor responded that nobody wants to be on the furlough scheme and that “it’s not their fault their business has been asked to close.”
The chancellor also announced that as of today, 267,000 Bounce Back Loans had been approved worth over £8bn, and that 35,000 Coronavirus Business Interruption Loans had been approved worth £6bn.
Edwin Morgan, Director of Policy at the Institute of Directors, said: “A furlough extension will bring significant relief to employers and workers across the country. Many firms will be operating far below normal capacity for the foreseeable future. A part-time furlough provides a much-needed launch ramp so businesses can start to get back up to speed. A more flexible approach will allow firms to raise activity levels in tandem with demand, helping to avoid cashflow challenges.”
Emma Jones, founder small business support network Enterprise Nation, said: “We think the part-time furlough idea for directors is important, but again we’d like to hear more details about how this will operate in practice.
“One caveat to all of this is the nervousness around the mounting, but inevitable cost to the taxpayer.”