Chancellor Rishi Sunak extends furlough scheme for four months

12 May 2020, 13:09 | Updated: 15 June 2020, 15:27

Rishi Sunak extends job retention scheme until end of October

Chancellor Rishi Sunak has announced that the UK government furlough scheme will be extended until the end of October, with workers continuing to receive 80 per cent of their wages until August.

The Chancellor told MPs that changes will be made from the end of July to share the burden of paying salaries with employers, but the scheme will continue until the end of October.

Speaking in the Commons, Mr Sunak said: "As we reopen the economy we need to support people getting back to work.

"The job retention scheme has been extended for four months until the end of October. By that point, we will have provided eight months of support for British people and businesses.

He continued: "Until the end of July there will be no changes.

"Then from August to October, the scheme will continue for all sectors and regions of the UK but with greater flexibility to support the transition back to work.

"Employers currently using the scheme will be able to bring furloughed employees back to work part-time and start sharing the cost with the government of paying people's salaries."

The scheme has so far supported around a million businesses and has cost the treasury around £8 billion so far.

Around 7.5 million workers are currently benefiting from the scheme.

Mr Sunak told the Commons: "Full details will follow by the end of May, but I want to assure people today of one thing that won't change. Workers will through the combined efforts of Government and employers continue to receive the same level of overall support as they do now at 80% of their current salary up to £2,500 a month.

"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."

As he made his statement to MPs in the Commons, the Chancellor's Twitter account posted: "1/ The job retention scheme will be extended, for four months, until the end of October.

"By that point, we will have provided eight months of support to British people and businesses. Until the end of July, there will be no changes to the scheme whatsoever.

"2/ From August to October the scheme will continue, for all sectors and regions of the UK, but with greater flexibility to support the transition back to work.

"Employers currently using the scheme will be able to bring furloughed employees back part-time.

"3/ We will ask employers to start sharing, with the government, the costs of paying people's salaries.

"4/ Further detail will follow by the end of May but I want to assure people one thing won't change:

"Workers will, through the combined efforts of government and employers, continue to receive the same level of support as they do now, at 80% of their salary, up to £2,500."

Rishi Sunak also told MPs he has held talks with the TUC and CBI about the future of helping people back into work, telling the Commons: "It is something that weighs heavily on my mind - every person who loses their job through this difficult period is a person that this Government is determined to stand behind."

He said this could include providing training or helping businesses to create new jobs.

However, Shadow chancellor Anneliese Dodds said many were taken aback by comments attributed to Government officials suggesting people need to be "weaned off an addiction" to the furlough scheme.

She said she had only heard about the Chancellor's changes "in the last few seconds" and will examine them "very, very carefully".

Ms Dodds said people do not want to be furloughed, adding in the Commons: "It's critically important they are not penalised for that choice. We welcome the flexibility mentioned, we've asked for this repeatedly."

Mr Sunak replied: "The use of the word 'addiction' is not one I have ever used and not one I agree with.

"Nobody who is on the furlough scheme wants to be on this scheme. People up and down this country believe in the dignity of their work, going to work, providing for their families, it's not their fault their business has been asked to close or asked to stay at home.

"That is why I established this scheme to support these people and their livelihoods at this critical time."