No “Cliff-Edge” End To Furlough Scheme Says Chancellor

Chancellor Rishi Sunak has promised there will be no “cliff-edge” cut-off to the government’s furlough scheme to support workers through the coronavirus pandemic.

The latest government figures showed that 6.3 million workers were having 80 per cent of their salaries, up to a maximum of £2500 per month, paid by the Treasury at a cost of £8 billion to the taxpayer.

According to research by the Office for National Statistics), eight in ten workers in the hospitality sector have been furloughed as a result of the coronavirus crisis. The chancellor has already extended the JRS once to the end of June, and is under pressure to do so again. Various business groups have warned of mass redundancies, including those representing the hospitality sector, unless taxpayer support continues beyond the end of June.

However, rather than bring the scheme to a sudden stop at the end of June, the Chencellor said ministers were looking at ways to wind down the scheme and ease people back into work in a “measured way”.

“To anyone anxious about this, I want to reassure that there will be no cliff-edge to the furlough scheme,” he said.

“I’m working as we speak to figure out the most effective way to wind down the scheme and ease people back into work in a measured way.

“As some scenarios have suggested, we are potentially spending as much on the furlough scheme as we do on the NHS for example.

“Clearly that is not a sustainable situation which is why, as soon as the time is right, we want to get people back to work and the economy fired up again.

”Hospitality Union founder Jonathan Downey said: “This is great news and very reassuring to hear two months ahead of the current end date. Between now and 30 June, we must start to get people back to work in safe environments. Fewer on furlough = It’s more likely the scheme can be extended for longer to those not allowed to work.”

Torsten Bell, chief executive of the Resolution Foundation think tank which proposed the job retention scheme, said that despite the high cost to the taxpayer, it was a price worth paying.

“The 6.3 million jobs being furloughed shows in stark terms the scale of the economic shutdown that Britain is living through,” he said.

“If this kind of volume of workers stay on the scheme for several months, the cost will run into the tens of billions of pounds. And that is a cost very much worth paying.

“Even despite mass furloughing, unemployment is still soaring, with over two million new claims for benefits coming though.

“This should remind us how badly needed the retention scheme is, but also that we are likely to be living with the legacy of high unemployment that coronavirus has given Britain, long after it has been phased out.”