Chancellor prepares to announce furlough changes

Cheryl Sanders
May 29, 2020

As before, a single grant - this time at a reduced level of £6,570 - will be paid to self-employed workers covering a three-month period.

Under plans to be announced by Rishi Sunak over the next few days, the support given by the furlough scheme will be cut back due to government concerns about its spiralling cost and the likely impact on the UK's growing public spending deficit.

With that date soon to expire, over 100 MPs have signed the letter calling for clarity, highlighting that the employment furlough scheme has already been extended until the end of October.

The Chancellor also said they will be allowed to return to work part-time from July without risk of losing out financially, rather than August as initially suggested.

The scheme will run until October, but from the beginning of August business will pay 20% of their employees' wages with the government reducing its share to paying 60%.

Under the new terms of the furlough scheme, the government will continue to pay towards furloughed staff's wages, but employers will be contributing after July.

(Alliance News) - The UK chancellor of the exchequer is set to tell employers they will need to contribute to their furloughed workers' salaries from August as the government admitted the scheme can not run "indefinitely".

Millions of furloughed employees will continue to receive 80% of their average wages up to a £2,500 cap, but firms will have to cover more of the costs.

There had been calls for freelancers to be paid the same as employees who are furloughed, but, this has been rejected.

"Extending the job retention scheme and making it more flexible is key to getting the economy back on its feet", said Federation of Small Businesses national chairman Mike Cherry.

It comes as details of the extended furlough scheme were also outlined.

Officials were keen to stress there are other measures in place and support for businesses and individuals, but the scheme will end on Halloween. "We've stretched and strained to be as generous as possible to businesses and workers, which is why we have made the decision that we've made today". But the scheme is expected to cost a total of around £80bn, or £10bn a month.

- Will this lead to mass redundancies?

One of those eligible is musical director Yshani Perinpanayagam, who has seen work dry up since her show at the Royal Shakespeare Company was cancelled at the start of lockdown. Airlines have already started warning job losses are inevitable, and the Government has pointed out not every job can be saved. The Office for Budget Responsibility is set to publish detailed costings next week. Officials are expected to present revised figures next week.

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