The government’s Coronavirus Job Retention Scheme will remain open until the end of October, the chancellor of the exchequer announced today (Tuesday).
Rishi Sunak said the furlough scheme would be extended by a further four months with workers continuing to receive 80 percent of their current salary.
From the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff.
The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month.
"Our Coronavirus Job Retention Scheme has protected millions of jobs and businesses across the UK during the outbreak – and I’ve been clear that I want to avoid a cliff edge and get people back to work in a measured way," said the chancellor
This extension and the changes we are making to the scheme will give flexibility to businesses while protecting the livelihoods of the British people and our future economic prospects.
New statistics published today revealed the job retention scheme has protected 7.5 million workers and almost 1 million businesses.
The news was welcomed by business leaders.
Mike Cherry, national chairman of the Federation of Small Businesses, said: "The Job Retention Scheme is a lifeline which has been hugely beneficial in helping small employers keep their staff in work, and its extension is welcome.
"Small employers have told us that part-time furloughing will help them recover from this crisis and it is welcome that new flexibility is announced today."
Dame Carolyn Fairbairn, director-general of the CBI, 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."
Locally, Phil Smith, managing director of Business West, said: "The extension of the Job Retention Scheme will come as a huge help and a huge relief for businesses in South West England.
“The chancellor is once again listening to what we’ve been saying, and the changes planned will help businesses bring their people back to work through the introduction of a part-time furlough scheme. We will engage with the Treasury and HMRC on the detail to ensure that this gives companies the flexibility they need to reopen safely.
“Our research shows that the scheme has become a key part of wider government support for businesses, with more than 70 percent of firms surveyed furloughing a portion of their staff.
“Over the coming months, the government should continue to listen to business and evolve the scheme in line with what’s happening on the ground. Further support may yet be needed for companies who are unable to operate for an extended period, or those who face reduced capacity or demand due to ongoing restrictions.”