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The UK Government Has Extended Its Furlough Scheme Until The End Of October

The scheme will remain unchanged until the end of July, but from August onwards employers will be asked to share the cost of paying salaries with the government.

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The government has extended its furlough scheme until the end of October, chancellor Rishi Sunak has announced.

Under the scheme created due to the coronavirus pandemic, the government has agreed to subsidise up to 80% of wages, up to a maximum of £2,500 per month in order to protect jobs.

The scheme will remain unchanged until the end of July, but from August onwards employers will be asked to share the cost of paying salaries with the government.

They will also be able to bring back furloughed employees to work part-time.

Sunak said further details of changes to the scheme will be shared by the end of May, but said there will be no changes for workers on the scheme, who will still receive 80% of their salary until the end of October.

Around 7.5 million jobs have already been furloughed, with almost a million businesses supported, at a cost of around £10 billion so far.

The four-month extension means that the government will have provided a total of eight months of support, which Sunak said "provides, I think, a very good and generous runway for businesses and firms to plan against and indeed to start getting back to work when the time is right".

Shadow chancellor Anneliese Dodds said the government was right not to "pull away" the furlough scheme, which she described as "a lifeline for millions."

She said: “It is welcome that the Chancellor has heeded the call by Labour, trade unions, and businesses for more flexibility in the scheme, to support employees to go back to work part-time.

“The government must clarify today when employers will be required to start making contributions, and how much they’ll be asked to pay. If every business is suddenly required to make a substantial contribution from Aug. 1 onwards, there is a very real risk that we will see mass redundancies.”

The detail on how much firms will be expected to contribute has yet not been released, but it is understood that the government will still be bearing the "most substantial part of the contribution."

The Treasury is also yet to release details on how many days people will be asked to return to work for, but it is understood that there will be some flexibility.

Trades Union Congress general secretary Frances O'Grady also said she welcomed the announcement, saying that ministers had "listened to [trade] unions."

“We are pleased ministers have listened to unions and extended the job retention scheme to the autumn," she said. "This will be a big relief for millions.

"Changing the rules to allow part-time working is key to enabling a gradual and safe return to work. And maintaining the rate at 80% is a win for the pay packets of working families."

“As the economic consequences of COVID-19 become clear, unions will keep pushing for a job guarantee scheme to make sure everyone has a decent job.”

The Confederation of British Industry said ending the furlough scheme would "protect millions of jobs."

Dame Carolyn Fairbairn, CBI director-general, said: “The Chancellor is confronting a challenging balancing act deftly. As economic activity slowly speeds up, it’s essential that support schemes adapt in parallel.

“Extending the furlough to avoid a June cliff edge continues the significant efforts made already and will protect millions of jobs.

“Introducing much-needed flexibility is extremely welcome. It will prepare the ground for firms that are reawakening, while helping those who remain in hibernation. That’s essential as the UK economy revives step by step while supporting livelihoods."

She added that firms will want more details on the changes to the scheme and said the government must "continue to keep a watchful eye on those industries and employees that remain at risk".

"All schemes will need to be kept under review to help minimise impacts on people’s livelihoods and keep businesses thriving," she added.

Mel Stride MP, the chair of Parliament's Treasury Committee, said the extension of the scheme with employer contributions and allowing employees to work part-time were "all welcome steps from the chancellor." However, he said more needed to be done to help self-employed people, who aren't covered by the scheme.

“The devil though will be in the detail," he said, "which will be set out later this month when the Treasury Committee looks forward to carefully scrutinising these changes.

“The chancellor also said that there will be no changes to the scheme until July. This will be worrying for those who continue to fall through the gaps of the government’s support measures such as the lack of furlough support to help cover dividend income generated through self-employment."