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Furlough pay ‘could be cut to 60% of workers’ wages’
The government is preparing to wind-down the coronavirus wage-subsidy scheme which could mean cutting furlough pay from 80% to 60% of wages.
Chancellor Rishi Sunak is reportedly drawing up plans to phase out the coronavirus furlough scheme and encourage people back to work.
One idea is to cut the 80% wage grant for furloughed workers to 60%, with further gradual reductions, according to reports in The Evening Standard.
Another option being considered is to allow some furloughed staff to work but with a smaller subsidy from the taxpayer.
Speaking on ITV News, Sunak said the spending on the furlough scheme is similar to that of the NHS: “Clearly that is not a sustainable situation which is why, as soon as the time is right, we want to get people back to work and the economy fired up again.”
It comes as figures published this week reveal around a quarter of British employees (six million) have been furloughed in the past two weeks at a cost of £8bn.
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With the Coronavirus Job Retention Scheme which pays 80% of a workers’ salary up to £2,500 a month available until the end of June, many are questioning its sustainability.
However, Sunak said there will be no “cliff edge” ending amid fears it would trigger mass redundancies.
The nation is expecting Prime Minister Boris Johnson to announce on Sunday the government’s plan to ease Britain out of lockdown as figures suggest we are now past the peak of coronavirus deaths.