RISHI SUNAK has been urged to rethink the winding down of the furlough scheme, due to fears of mass unemployment in the coming months.
Rishi Sunak, the Chancellor of the Exchequer, has so far resisted calls to extend the scheme past October, but pressure is increasing for a reconsideration of how the scheme will end, and when. The furlough scheme was first established by the government in March. Known formally as the Coronavirus Job Retention Scheme (CJRS), furlough has provided Britons with financial support during a time of crisis.
Workers have had 80 percent of their salary up to £2,500 a month covered by the government, although this is set to gradually change from next month.
They have also had their National Insurance and pension contributions covered by the scheme, in support for both workers and employees.
Furlough was widely welcomed in Britain by many people who were grateful for the economic support.
Although the scheme has excluded many due to rules and regulations laid out by the government, those who did receive the financial support were kept in employment.
However, there are concerns that with the end of the scheme, there will not be enough support, and many could potentially fall into unemployment as a result.
The British Chambers of Commerce (BCC) has urged the Chancellor to rethink the scaling back of the support measures.
The organisation states that as many companies struggle with cash flow problems, the end of furlough is likely to create job losses.
And a survey from the group found as many as 40 percent of companies would not be taking up the government’s £1,000 bonus to rehire furloughed staff.
The bonus, announced in Mr Sunak’s statement, was designed to help companies transition staff out of furlough and back into work.
The BCC has said other measures, such as increasing the threshold for National Insurance contributions could help businesses to save jobs, as they cut costs.
Alternatively, though, other groups have called for an extension of the scheme altogether.
The General Secretary of the Trades Union Congress, Frances O’Grady, has called for the Chancellor to extend the scheme “for businesses who need longer to get back on their feet”.
The Chancellor, alongside the government, has seemingly not entertained any extension or change to the scheme as it currently stands.
Speaking in his summer statement, Mr Sunak said the scheme would come to an end in October.
He said: “Furlough has been a lifeline for millions, supporting people and businesses to protect jobs, but it cannot and should not go on forever.
“I know that when furlough ends it will be a difficult moment. But I’m also sure that if I say the scheme must end in October, critics will say it should end in November.
“But the truth is: calling for endless extensions to the furlough is just as irresponsible as it would have been, back in June, to end the scheme overnight.
“We have to be honest – leaving the furlough scheme open forever gives people false hope that it will always be possible to return to the jobs they had before.”
Indeed, the Prime Minister has also rejected any calls for a scheme extension.
In an interview with the Evening Standard, he said: “People need to recognise that the particular restrictions that furlough places on you are not, in the long term, healthy either for the economy or for you as an employee.
“You are keeping people in suspended animation. You are stopping them from actually working. I am being absolutely frank with you, we are pushing it out until October but in the end you have got to get the economy moving.”
Referring to the BCC study, a Treasury spokesperson told Express.co.uk: “This survey does not give an accurate picture of the take-up of the support announced last month as it was carried out before the publication of much of the relevant guidance and the engagement with business. It is also important to place the small sample size in the context of the 1.2m employers who have been supported through the furlough scheme and could therefore be eligible for the Job Retention Bonus.
“We are clear that our Plan for Jobs will support, protect and create jobs, helping ensure people and businesses can come back from this crisis stronger.”