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Chancellor set to extend furlough scheme as lockdown eases

Lauretta Roberts
12 May 2020

Chancellor Rishi Sunak is expected to announce an extension to the furlough scheme under which the Government subsidises the wages of workers temporarily laid off due to the coronavirus.

At least 6.3 million people are currently having up to 80% of their salaries paid by the taxpayer under the furlough system at a cost of some £8 billion.

Sunak has previously said he was preparing to “wean” workers and businesses off the programme – which currently runs until the end of June – but calls have been made for it to be prolonged.

It has been reported the programme will continue to September, although the rate of support will be cut from a maximum of 80% of salary to 60%.

Meanwhile, ministers are to set out guidance on how people can travel safely on public transport as the coronavirus lockdown begins to ease.

The death toll from coronavirus in the UK stood at more than 32,000 as the Prime Minister said he wants those who cannot work from home to start returning to their workplaces from Wednesday.

Sunak last week warned the furlough scheme was not “sustainable” at its current rate although he promised there would be no “cliff edge” cut-off.

Torsten Bell, chief executive of the Resolution Foundation think tank and an early advocate of the scheme, said it should be phased out gradually.

Moving too quickly could spark a huge second surge in job losses at a time when unemployment already looks set to be at the highest level for a quarter of a century,” he said.

“This policy has made a huge difference in this crisis. It now needs careful and gradual change to ensure the benefits it has provided are secured rather than squandered.”

Others have suggested any tapering should be looked at on a sector-by-sector basis with those businesses set to open last, such as those in hospitality, to receive more support. Yesterday the Government confirmed that non-essential retail could be able to open from 1 June under a phased approach, with details of the phases to be announced soon.

Meanwhile Johnson has said he does not expect a sudden “flood” of people heading back to work following Monday’s publication of the Government’s “road map” for lifting the restrictions.

But this prompted a barrage of questions as to how it could be achieved amid warnings the Government is watering down its clear “stay home” message.

Speaking at the daily No 10 press briefing on Monday, Johnson said the measures – including allowing unlimited outdoor exercise – were mere “baby steps”.

He warned the Government stood ready to reimpose controls if there was any sign of the transmission rate of the virus picking up again.

The TUC, meanwhile, has welcomed the publication of Government guidance on how workplaces can be made “Covid-secure” as they re-open.

Employers – including factories and construction sites – will be required to carry out a risk assessment before they can resume.

This followed criticism by unions that Johnson had issued his return-to-work call in his broadcast on Sunday without explaining how it could be safely achieved.

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