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Chancellor extends furlough scheme until October

Chancellor extends furlough scheme until October
 Rishi Sunak, chancellor of the exchequer

Rishi Sunak has announced the government’s furlough scheme will be extended by four months in a bid to support people back to work in a “measured way” post-lockdown.

Speaking in the House of Commons this afternoon (May 12), Mr Sunak revealed the Job Retention Scheme — originally set to end in June — would be extended until the end of October.

Mr Sunak said there would be no changes to the scheme, which currently covers up to 80 per cent of an employee's regular wages, until the end of July. From that point, the scheme will continue with “greater flexibility” to support the transition back to work.

From July employers will be asked to begin sharing the responsibility of paying people’s salaries, but Mr Sunak said workers would continue to receive 80 per cent of their salaries but through a “combined effort of government and employers”.

Further details on how employers will be asked to contribute will be delivered by the end of May.

Employers will also be able to bring furloughed employees back part-time through the scheme from July, Mr Sunak said.

He said: “I’m extending the scheme because I won’t give up on the people who rely on it.

“We stood behind Britain’s workers and businesses as we went into this crisis and we will stand by behind them as we come through the other side.”

Mr Sunak said about 7.5m UK jobs had been furloughed and 1m businesses supported through the scheme so far, jobs the UK “could have lost” and businesses which “could have closed shop for good” if the scheme did not exist.

He added: “The government’s plan is one of the most comprehensive in the world. We have provided billions of pounds of tax cuts, cash grants and loans for millions of businesses, tens of billions of deferred taxes, income protection for the self employed.

“We believe in the dignity of work and we are doing everything we can to protect people currently unable to work.”

imogen.tew@ft.com

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