Save, make, understand money

Household Bills

Pressure mounts on government to extend furlough scheme

Paloma Kubiak
Written By:
Paloma Kubiak

The chancellor is facing mounting pressure to extend the furlough scheme in a bid to curb job losses after the government support comes to an end in October.

The Coronavirus Job Retention Scheme (furlough) is gradually being wound down with the government paying less towards wages and employers making up the shortfall ahead of the scheme’s closure in October.

But with 9.6 million people furloughed, payroll workers already down 650,000 in the three months to June, and with the Bank of England predicting unemployment to reach 2.5 million by the end of the year, many are concerned about mass redundancies amid the coronavirus pandemic.

‘Not fair to extend furlough indefinitely’

Chancellor of the exchequer, Rishi Sunak today visited Scotland to see the impact of the government support schemes and in an interview with Sky News, said ending the scheme was “one of the most difficult decisions I’ve had to make in this job”.

He said: “If you look at it from start to finish, the government will have been stepping in to help pay people’s wages for almost eight months – an extraordinarily long period of time.

“I think most reasonable people would look at that and say that’s not something that’s obviously sustainable in the long run.

“In common with many other countries around the world, their versions of this are all coming to the end towards the end of this year.”

He added: “I don’t think it’s fair to extend [furlough] indefinitely. It’s not fair to the people on it. We shouldn’t pretend there is, in every case, a job to go back to.

“This is what we need to do now, it’s to look forward, provide the opportunities for tomorrow. Yes, there is hardship ahead for many people, we know that, but they shouldn’t be left without hope.”

‘Best way to protect jobs is to extend the furlough scheme’

Scottish National Party shadow chancellor Alison Thewliss said the best way to support jobs would be to extend the furlough scheme.

She said: “He [the chancellor] should be trying to protect as many jobs as possible and the best way of doing that would be to extend the furlough scheme and protect people who are already in jobs but in sectors where perhaps they can’t go back to full strength yet. So, sectors like aviation, hospitality, the arts; many retail sectors are not yet up and running fully.

“The chancellor by cancelling the furlough scheme and making people unemployed just now…tens of thousands of jobs are being lost or are on the verge of being lost, the chancellor really should take heed of this and extend the furlough scheme until at very least the end of the year.”

Thewliss added that the government will be paying people’s benefits if they put them out of work.

“There is a cost to be borne on either side of this and there’s good evidence to see that keeping the link between people’s employment is the best way to keep them in jobs, to get those industries back up and running once they’re able to do so safely,” she said.

The Confederation of British Industry (CBI) today said the government “must get the building blocks in place to protect jobs, as well as lives”.

And the Federation of Small Businesses (FSB) has recently called for urgent targeted support for businesses having to remain shut, especially in areas where local lockdowns are in place. It’s also called for “help for the hundreds and thousands of people – including company directors and the newly self-employed – who have received no support at all for more than 130 days.”