Government will extend furlough beyond June if needed, says minister
The government is committed to extending the job retention scheme beyond the end of June if required to support workers currently on furlough, a minister said today.
Northern Ireland secretary Brandon Lewis said the government would not end furlough abruptly at the end of June if it is clear employees will continue to need support.
Speaking to BBC Radio 4’s Today programme, Lewis said: “We haven’t made any final decisions yet about when it ends and how we will end it.
“At the moment its due to end at the end of June. But the chancellor has been clear – if we need to extend furlough beyond the end of June we will do that.”
The job retention scheme sees the government pay 80 per cent of people’s wages up to £2,500 a month. But the scheme is costing the government between £3bn and £4bn per month. And there are fears it will end up costing as much as the NHS.
More than 800,000 companies have put 6.3m workers on the furlough scheme since it launched, at a cost of around £8bn by 3 May. But it is only set to run until the end of June.
There are now reports that chancellor Rishi Sunak could cap furlough payouts to 60 per cent of salaries if it is extended beyond June.
Job retention scheme to be assessed in stages
And Lewis today told Radio 4: “We are going to do this in stages when we have a better understanding of where we are with the size of the virus and the impact on the economy at that stage.
“As the chancellor himself said … it’s whatever we can and whatever it takes to make sure… that when we come through this virus the economy has the ability to start to bounce back.”
His comments came moments after former chancellor Alistair Darling urged the government to extend the job retention scheme.
Darling poured doubt on Bank of England predictions today that the UK economy could bounce back by 15 per cent in 2021, after a severe blow this year.
“I think [a V-shaped recovery] is optimistic,” Darling said. “It will not be possible for everybody to go back to work immediately. People will need to get their confidence sufficiently high to get on public transport and go to work. This is a long haul, let’s just accept that.”
Darling: Extend furlough scheme to combat slow recovery
The former Labour chancellor warned the government must act to avoid workers on furlough falling into redundancy.
“We have to factor in the very strong possibility that there will be people who will not be able to go back to their own jobs. And we do not want to find that they go from furlough to redundancy,” he said.
“The furlough scheme was a very good scheme, it was just what was needed. But it needs to be adapted now.”
Mountain Warehouse retail chain boss Mark Neale has put some staff on the job retention scheme. He said furlough could continue in some form until the end of the year.
“The government needs to keep writing the cheques to some extent but not nearly to the extent they are at the moment,” he said. “Right now the costs are completely unsustainable.”
He favoured the idea of gradually reducing the amount of money the government pays furloughed staff, rather than scrapping the scheme.
“There’s scope for the amount it costs the government to come down significantly,” he told the Today programme.