Furloughed workers across UK will continue to receive 80% of their current salary, up to £2,500. This applies to the whole of the UK.
There will be no changes to the scheme until the end of July but from the start of August flexibility will be introduced that will enable employers to bring back furloughed workers part-time and pay a percentage of their salaries. The employer payments will substitute the contribution that the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month, until closure of the scheme at the end of October.
Chancellor Rishi Sunak said: “Our Coronavirus Job Retention Scheme has protected millions of jobs and businesses across the UK during the outbreak – and I’ve been clear that I want to avoid a cliff edge and get people back to work in a measured way.
“This extension and the changes we are making to the scheme will give flexibility to businesses while protecting the livelihoods of the British people and our future economic prospects.”
So far, 7.5 million workers from almost one million businesses have benefited from the scheme, at a cost to the state of £10bn. According to tax accountants Blick Rothenberg, the extension of the scheme to the end of July is likely to take the cost to £50bn, and with the extension at a reduced level to the end of October the total cost of the Job Retention Scheme could reach £70bn – equivalent to around 10% of total government receipts.
Business leaders say it is money well spent.
Mike Cherry, national chairman of the Federation of Small Businesses, said: “The Job Retention Scheme is a lifeline which has been hugely beneficial in helping small employers keep their staff in work, and it’s extension is welcome. Small employers have told us that part-time furloughing will help them recover from this crisis and it is welcome that new flexibility is announced today.”
CBI director-general Carolyn Fairbairn said: “The chancellor is confronting a challenging balancing act deftly. As economic activity slowly speeds up, it’s essential that support schemes adapt in parallel. Extending the furlough to avoid a June cliff-edge continues the significant efforts made already and will protect millions of jobs.
“Introducing much needed flexibility is extremely welcome. It will prepare the ground for firms that are reawakening, while helping those who remain in hibernation. That’s essential as the UK economy revives step-by-step, while supporting livelihoods.”