UK chancellor, Rishi Sunak, is predicted to reveal how he is preparing to wind down the coronavirus wage-subsidy scheme for workers from July, in line with the governments plans to gradually ease its current lockdown measures. Tara Pilkington breaks down what this new development means for you.
As a result of the ongoing coronavirus pandemic which has forced many offices and workplaces to temporarily close, HMRC figures have revealed that in the past fortnight almost a quarter of employees in Britain have been furloughed.
Following this news, the chancellor is expected to soon announce how the Covid-19 job retention scheme will be steadily scaled back in the coming weeks and months as restrictions on business activity are lifted.
Here is what you need to know about the potential options moving forward:
- One option which the Treasury is understood to be examining includes cutting the 80% wage subsidy paid by the state to 60% and lowering the £2,500 cap on monthly payments.
- Another option which is being promoted by employers’ groups is to allow furloughed staff to work, but with a smaller state subsidy.
- While sources are indicating that a final decision is yet to be made, it is believed that the Treasury is working closely with No 10, and that on Sunday Boris Johnson will outline his plans on how he will gradually lift the lockdown restrictions.
- As the current furlough scheme is due to close at the end of June, firms and businesses need to start making decisions regarding their future from as early as next week, which is why many are calling for the chancellor to provide refreshed guidelines as the alternative means that many workers face potential job losses.
- Currently, employers with more than 100 staff must run a 45-day consultation before making any redundancies.
During a television interview on Monday, Sunak told ITV: “I’m working, as we speak, to figure out the most effective way to wind down the scheme and to ease people back into work in a measured way.”
