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Chancellor Extends Furlough Scheme Until October

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The government’s Coronavirus Job Retention Scheme will remain open until the end of October.

In a boost to millions of jobs and businesses, Rishi Sunak said the furlough scheme would be extended by a further four months with workers continuing to receive 80% of their current salary.

From the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff.

The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month.

New statistics reveal the job retention scheme has protected 7.5 million workers and almost 1 million businesses.

The scheme will continue in its current form until the end of July and the changes to allow more flexibility will come in from the start of August. More specific details and information around its implementation will be made available by the end of this month.

The Government will also explore ways to support furloughed workers who wish to do additional training or learn new skills during this period. It will also continue to work closely with the Devolved Administrations to ensure the scheme supports people across the Union.

Business Leaders across Wales welcomed the announcement.

Ian Price, CBI Wales Director, 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.

“Firms will, of course, want more detail on how they will contribute to the scheme in the future and will work with the UK Government to get this right.

“Above all, the path of the virus is unpredictable, and much change still lies ahead. The UK and Welsh governments must continue to keep a watchful eye on those industries and employees that remain at risk. All schemes will need to be kept under review to help minimise impacts on people’s livelihoods and keep businesses thriving.

“The greater the number of good businesses saved now, the easier it will be for the economy to recover.”

Robert Lloyd Griffiths Director of IoD Wales said:

“A furlough extension will bring significant relief to employers and workers across the country.

“We’re delighted the Treasury has taken on the IoD’s consistent calls for a flexible furlough. Many firms will be operating far below normal capacity for the foreseeable future. A part-time furlough provides a much-needed launch ramp so businesses can start to get back up to speed. A more flexible approach will allow firms to raise activity levels in tandem with demand, helping to avoid cashflow challenges but we now do need further clarity around employers' contributions. Many firms that would normally be on strong footing are still in dire straits.

“In the meantime, it is essential that these measures are aligned with clear messaging from both UK and Welsh Governments on the easing of lockdown so that all Directors and employers have absolute clarity on when and how they should begin to open up business in a way that is both safe and consistent across all four nations.”

President of the South Wales Chamber of Commerce Paul Slevin said:

“This is great news for the millions of workers currently furloughed. The scheme has been a lifeline to both employees and employers; providing workers with job security and a regular income while bosses can protect their businesses by reducing overheads.

“While there was some speculation that the government would reduce payments to 60% of average wages, the decision to maintain current levels is the right one and will ensure no-one is rushed into going back to work without the necessary security measures in place.

“The added flexibility offered from August will allow workers to return, where possible, part time and ask employers to help contribute to the costs.

“Although an extremely costly scheme for the government, the alternatives, even half measures, could have been detrimental to the Welsh economy and taken years to recover from.

“We welcome the latest announcement and wait to hear further clarifications from the government at the end of May.”

Ben Cottam, Head of External Affairs FSB Wales said:

‘Extending the Job Retention Scheme (JRS) and allowing small firms to furlough staff on a part-time basis will protect thousands of livelihoods over the months ahead and give employers reassurance that their employees will be supported. Our members have been telling us loud and clear that the ability to furlough staff on a part-time basis will be central to aiding gradual recovery at a time when economic activity is still in the doldrums.

We await further detail on the contributions that will be required of small employers after July. We need to ensure that those obligations are affordable for the many businesses that have had no revenue coming in for months now, but still have fixed overheads to worry about.

Beyond this remain concerns for sectors such as tourism which perhaps face longer-term challenges and we will be seeking conversations with governments in Cardiff and London about how we can ensure their viability going forward’.