UK Furlough Scheme extended, companies to share burden from August

UK: Chancellor Rishi Sunak has confirmed the extension of the UK’s coronavirus furlough scheme until October.

The chancellor addressed MPs in the commons, promising continuing employee support and confirming that employers would need to share government burdens from august onward.

The scheme will continue to provide 80 per cent support for employee salaries up to £2,500, no matter what changes happen after July. The chancellor added that companies using the scheme will be allowed to bring employees back to work on a part time basis.

At the moment, approximately 7.5 million workers are covered by the scheme, up from 6.3 million last week. According to Sunak, the changes made to the scheme will improve flexibility with regards to the transition back to work.

In her response, shadow chancellor Annaliese Dodds criticised the chancellor for specific language made by government officials suggesting people would be “weaned off an addiction” to the furlough scheme. She further highlighted the importance of not penalising those on furlough.

Sunak responded saying: “Nobody who is on the furlough scheme wants to be on this scheme. 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.

Businesses across the country have shown support, with the British Chamber of Commerce saying the extension would bring significant relief to employers and workers. Stephen Phipson, head of Make UK said to BBC News that this would avoid: “a looming cliff edge triggering significant redundancies for many companies and recognises the need for greater flexibility as the economy fires up.”

Those within hospitality have suggested that tapering be done on an industry by industry basis. Mark Sesnan of GLL said to ITV News: “Industries such as leisure and hospitality (should be) protected.

This is because, in order to adhere to social distancing guidelines, we will have to operate at a significantly reduced capacity.”

UK Prime Minister Boris Johnson on Sunday unveiled a roadmap to reopening, suggesting some hospitality businesses may operate by July. Robin Hutson, CEO of Lime Wood Group, has called for greater government support for rural hospitality, suggesting many schemes to help the industry survive.

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