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Sunak: no cliff-edge to furlough scheme

By Nikkie Thatcher

- Last updated on GMT

State aid: the Government is looking to wind down the furlough scheme
State aid: the Government is looking to wind down the furlough scheme

Related tags: Coronavirus

Chancellor of the Exchequer Rishi Sunak has issued reassurances that there wouldn’t be a “cliff-edge” to the furlough scheme as he starts planning to wind the initiative down.

Trade bodies had called for the Chancellor to extend the Coronavirus Job Retention Scheme again after he moved the date it would end from May to June.

UKHospitality (UKH) and the British Beer & Pub Association (BBPA) urged the Government to provide further support when it came to furloughed staff, insurance companies, grants, rent and loans.

Furlough extension

The scheme, which allows businesses to furlough employees with the Government paying cash grants of 80% of their wages up to a maximum monthly pay of £2,500, was originally open for three months and backdated from 1 March until the end of May. However, the Government announced the month-long extension last month (April).

At that time, Sunak said the Government had taken unprecedented action to support jobs and businesses through this period of uncertainty, including the furlough scheme and it was vital for people’s livelihoods the UK economy got up and running again when safe to do so.

The latest figures from the Government found the scheme had cost £8bn so far and HMRC said 6.3m jobs had been temporarily laid off by 800,000 businesses, by Sunday 3 May.

Effective way

Sunak outlined his plans to phase out the scheme to ITV News ​yesterday (Monday 4 May) restrictions look to be eased.

He said: “To anyone anxious about this, I want to reassure them there will be no cliff-edge to the furlough scheme.

“I’m working, as we speak, to figure out the most effective way to wind down the scheme and ease people back into work in a measured way.

“As some scenarios have suggested, we are potentially spending as much on the furlough scheme as we do on the NHS, for example. Clearly, that is not a sustainable situation.”

Related topics: Legislation, UnitedWeStand

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