UK chancellor Rishi Sunak has extended the nation’s furlough scheme, which sees employers paid by the government to not fire their staff during the coronavirus lockdown, for four more months.
The furlough scheme had already been extended once, but has now been given a further four-month extension by the government, guaranteeing a part of the salaries of employed workers until the end of October.
Hailing the scheme as “one of the most comprehensive anywhere in the world”, chancellor Sunak said paying employers to keep staff on their books rather than make them redundant during the coronavirus lockdown “speak to my, and this Conservative government’s values.”
While taxpayers of the future will pay the living expenses of furloughed workers today whether they are retained by their companies or made unemployed and shuffled onto state benefits, under this system it is thought it would make it easier for people to return to work when the coronavirus emergency calms down, and without having to re-apply for old jobs.
On the importance of work, the chancellor said: “We believe in the dignity of work, and we are doing everything we can to protect people currently unable to work”, noting that seven and a half million people were now on the scheme, up from 6.3 million last week.
While the scheme has now been extended, it will also change. From the end of July, employers will have more flexibility, as part of the government’s plan to get the nation back to work. Staff will be able to return to work part-time to ease the transition, and employers will be expected to take on more responsibility for paying their own staff. The announcement implies the amount of government cover for salaries — which presently stands at 80 per cent — will gradually fall towards the end of the programme.
British newspaper The Guardian reports paying the salaries of seven and a half million people is now costing the exchequer £14 billion a month. The Chancellor already said last week that the scheme was costing the country as much as the National Health Service.
One outcome of the nationalisation of millions of wage packets in a drive to protect jobs from coronavirus business collapse is the shift towards the state. For the first time ever, over half of adults in the United Kingdom — between Furlough payouts, those on state benefits, and those receiving pensions — are being paid by the government.