–-— Chancellor confirms furlough scheme will end in October
By Laurie Laird
LONDON (MaceNews) – The U.K. government unveiled a new job support scheme on Thursday, aimed subsiding the wages of workers on reduced hours, but provided no additional assistance for those drawing on the nation’s job retention plan which will expire at the end of October.
“Our plan needs to adapt and evolve … and there was no harder choice than to decide to end the furlough scheme,” said Chancellor of the Exchequer Rishi Sunak in parliamentary address, adding that government support will be targeted on retaining “viable jobs.”
Under a complex scheme, employees working at least one-third of pre-Covid hours will be eligible for top-up payments bringing wages to 77% of pre-pandemic levels. The government will cover 22% of payments while employers will pick up the remaining 22%. The Chancellor did not detail the number of workers qualifying for the new scheme or announce measures to compel cash-strapped businesses to commit to the plan.
The soon-to-expire government plan covered 80% of furloughed workers’ wages up to a cap of £2,500 per month and supported more than 10 million workers over over the summer months. The new scheme will not provide additional support for furloughed workers or those unemployed as a result of the pandemic.
The announcement came a day after Prime Minister Boris Johnson announced new restrictions on socialisation across England, including an earlier closing time for pubs and restaurants, following an increase in transmission levels in the UK.
Sunak also extended the life of government loans to small and medium businesses and cancelled plans to restore the value-added tax on the hospitality industry to 20%. The chancellor reduced that levy to 5% back in July and the reduced rate will remain effective until next March.