UK unveils plan to wind down COVID-19 furlough scheme

Daniel Fowler
June 1, 2020

Some employers had warned they would not be able to pay 20 per cent of the wage costs of their furloughed staff from August - as reported by media before Friday's announcement - raising the risk of a fresh surge in job losses.

As part of the changes, in June and July, the scheme will continue as before – with the government covering 80 per cent of wages up to GBP 2,500 – with no employer contribution.

Labour has called on the chancellor to bring forward more fundamental reforms by protecting subsidies for the industries hit hardest by coronavirus.

The Chancellor has outlined plans to taper off the support being given through the furlough scheme.

By September, employers will need to start paying towards people's wages.

"As promised, I can provide more details today (29 May)".

A flexible furlough scheme will be introduced from July 1 which will give employers the chance to bring staff back part-time, with companies picking up the cost for the days their staff work.

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"There remain some sectors that will likely still face restrictions in August, or where we know recovery will take a bit longer and I do not think it is realistic to expect employers who continue to face these challenges to have to contribute to the scheme", she said.

A scheme to assist the self-employed has also been continued, with beneficiaries able to receive another three-month grant in August, based on 70 per cent of their previous earnings. Employers will pay National Insurance and pension contributions and 20 percent of wages, again up to the same £2,500 cap.

Welcoming Sunak's extension to the Coronavirus Job Retention Scheme, the standards body acknowledged that a number of its members "will be forced to operate at a reduced capacity for the foreseeable future".

The UK's daily deaths is also slightly down from 377 to 324.

“From July 1, a flexible furlough will be in place.

Mr Sunak said: "Our top priority has always been to support people, protect jobs and businesses through this crisis". The move is aimed to help support people back to work, the government said. That's 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.

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