Rishi Sunak plans to wind down furlough scheme but swears there won’t be a ‘cliff edge’

Rishi Sunak has introduced many ground-breaking packages recently but arguably the most dramatic change came courtesy of new furlough rules. Under the Coronavirus Job Retention Scheme, staff may have up to 80 percent of their wages covered by the state if their employer places them on temporary leave.


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The scheme has been hugely successful (or simply necessary depending on how it is viewed) as over six million people have been furloughed thus far.

Many businesses have warned however that if the scheme isn’t extended beyond June there could be a mass wave of unemployment and redundancies.

Despite this, it looks like there may still be difficult times ahead for the UK workforce as Rishi Sunak has unveiled plans to phase out the scheme.

He discussed this in a recent interview with ITV.

He kicked off with an attempt to reassure worried claimants: “To anyone whose anxious about this I want to give them reassurance today that they’ll be no cliff edge to the furlough scheme.”

While there may not be a “cliff edge” Rishi went on to confirm that an end goal is in sight:

“I’m working as we speak to figure out the most effective way to wind down the scheme and ease people back into work in a measured way.”

The realities of the cost of all this was then highlighted: “But as some scenarios have suggested, we are potentially spending as much on the furlough scheme as we do on the NHS for example.

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“Now clearly that is not a sustainable situation, which is why as soon as the time is right we want to get people back to work, get our economy fired up again”.

The costs can be worrying, but Rishi expressed that he felt that overall the scheme had been worthwhile: “Yes I do think it is working and that’s why we put in place this economic intervention.

“The critical thing at this time is to provide that support through what will be a temporary disruption to our economy but this is very severe, I’ve made that point before.”

The Chancellor of the Exchequer has expressed that he will do “whatever it takes” to support the country several times and he has just launched new “bounce back” loans for struggling firms.


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Despite this commitment, it’s possible that some furloughed staff could be in for a bit of a shock in the coming weeks and months.

Reportedly, the government is considering reducing how much furlough covers from 80 percent to 60 percent.

It should also be remembered that there is no guarantee that furlough pay will be extended to employees at all.

Utilising the furlough scheme is ultimately up to the employer’s discretion, although it must be agreed with the employee.

Coronavirus has had a severe impact on the economy and we are now starting to understand just how far it stretches.

Many people have been forced to apply for Universal Credit for support during this tough period and data revealed today highlighted a huge spike in demand.

The DWP released figures showing that 1.9 million households have claimed Universal Credit in the last two months alone.

This equates to just under one in ten working age households in Great Britain.

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