UK job retention scheme extended until October

As the Coronavirus pandemic grinds on, the UK government added to its commitment to supporting businesses and individuals by announcing it would extend the Coronavirus Job Retention Scheme (JRS) until October.

The initial iteration of the scheme was scheduled to wind up in June. Now though, Chancellor Rishi Sunak has said that in order to protect the millions of workers who are either furloughed or facing the prospect of being laid off the scheme would run through the summer. Estimates suggest that around 25% of the UK workforce is currently on furlough, which has cost £14bn a month. It is an enormous figure that has alarmed some observers concerned with the long-term implications for the economy.

Sunak, however, is determined to keep the scheme in place. “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,” he said.

“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.”

In practice, the scheme will continue in slightly amended form, with the government asking employers to contribute part of the cost of furloughed workers’ salaries as time goes on. The government has promised more details on that in the coming weeks. As it currently stands the UK taxpayer is covering 80% of eligible workers’ salaries, up to £2500 per month. There is no indication that that level will change as the scheme continues.

“Nobody who is on the furlough scheme wants to be on this scheme,” Sunak told the BBC. “People up and down this country believe in the dignity of their work, going to work, providing for their families, it’s not their fault their business has been asked to close or asked to stay at home.”

More information can be found here.

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