Chancellor Rishi Sunak today (May 12) confirmed that the government would be extending its jobs retention scheme, where the state covers 80 per cent of wages for people who cannot work because of the coronavirus epidemic, until the end of October.
Workers who are unable to work amid the UK-wide lockdown have breathed a sigh of relief that their wages won’t fall off a cliff edge after many speculated the government wage subsidy scheme would be wound down or stopped altogether from July.
Pressure from unions and other organisations warning of a tsunami of job losses if the scheme were stopped is thought to have prompted the chancellor to extend the scheme.
Currently, more than a quarter of the entire UK workforce – about 7.5m people – are covered by the furlough scheme, which is estimated to cost about £14bn each month.
Details are yet to emerge but Sunak has said that the jobs retention scheme, also known as the furlough scheme, will continue in its current from until the end of July. From the beginning of August, employers who have signed up to the scheme are allowed to let their furloughed workers work part-time and employers will also be asked to ‘share the costs’ of the scheme with the government.
Whatever changes are made from August, Sunak confirmed that furloughed workers will still receive at least 80 per cent of their wages until the end of October.
“I’m extending the scheme because I won’t give up on the people who rely on it,” Sunak said.
“Our message today is simple: we stood behind Britain’s workers and businesses as we came into this crisis, and we will stand behind them as we come through the other side.”
Unite general secretary Len McCluskey welcomed the chancellor’s announcement.
“The Chancellor’s announcement will be a welcome relief to households across the country,” he said. “The job retention scheme is as crucial to battling and defeating this virus as the public health measures that we have also been campaigning for.
“Of course, we’ll need to look at the detail when published but today’s announcement is a message again to employers that the government will stand behind them if they stand behind their workers. There should be no rush to redundancies.”
Since the furlough scheme was first introduced, Unite has been instrumental in reaching furlough agreements with employers across all sectors. Many employers refused to furlough their workers but after pressure from Unite agreed to take part in the scheme to save jobs.
Unite has also negotiated furlough agreements where employers have agreed to top up the government’s 80 per cent wage subsidy so that workers get 100 per cent of their wages. You can read about some of our more recent furlough wins here.
By Hajera Blagg