Chancellor Rishi Sunak during an interview to BBC on Tuesday confirmed that U.K.’s Furlough Scheme is being extended by four months. Mr. Sunak said that this scheme will pay the wages to workers who are on leave due to coronavirus lockdown.
The scheme will continue to provide employees with 80% of their monthly wages of up to 2,500 pounds, Mr. Sunak confirmed. Although he clarified that August onwards the government might ask the companies to “start sharing” the cost of Furlough scheme.
Approximately 7.5 million people are covered under this scheme, which forms about a quarter of workforce in the U.K. This comes up to the cost of 14 billion pounds a month.
Chancellor Sunak elaborated that Government plans that starting August, the scheme would continue for all the sectors in country with increased flexibility. This will allow the employers to bring the furloughed employees back to work, part-time and with slow transition.
In the interview to BBC on late Tuesday, Mr. Sunak said that attempts are being made to slowly reduce the use of taxpayer’s money but the details are still being drafted. He said that the number of jobs being lost as a result of Coronavirus pandemic “breaks my heart”. He further said, “That’s why I’m working night and day to limit the amount of job losses.”
“Our message today is simple: we stood behind Britain’s workers and businesses as we came into the crisis, and we will stand behind them as we come through the other side” said Mr. Sunak.
Accepting the growing concerns around the working of this scheme, Mr. Sunak said that it would not continue in its original form and needs some alterations. He is reportedly under the pressure to announce these changes soon to avoid “cliff edge” in which employers initiate with mass severances.
Chancellor elaborated that a company planning to lay-off more than 100 jobs must run a consultation of 45 days. This means that employers have the deadline of 18 May to start this process before the ending of Furlough scheme in June.
Mr. Sunak dismissed the misconceptions that people might get accustomed to the Furlough scheme. He said that nobody wants to be in the scheme by choice. “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.”