Coronavirus: Chancellor extends Furlough Scheme to the End of October

Added: 12th May 2020

The UK Government’s Job Retention Scheme to pay the wages of workers on leave because of coronavirus will be extended to October, Chancellor Rishi Sunak has announced.

Speaking today (May 12), he said employees will continue to receive 80 per cent of their monthly wages up to £2,500 and the scheme will remain the same until the end of July, but from August to October there will be “greater flexibility” for firms to bring staff back to work part-time.

First launched in March, the Job Retention Scheme had been due to close at the end of next month. The Chancellor also said that from August employers would need to “share with the Government the cost of paying salaries”.

Announcing the extension to October, Mr Sunak (pictured) said: "By that point, we will have provided eight months of support to British people and businesses. Until the end of July, there will be no changes to the scheme whatsoever."

He added: “Then from August to October, the scheme will continue for all sectors and regions of the UK but with greater flexibility to support the transition back to work.

“Employers currently using the scheme will be able to bring furloughed employees back part-time. And we will ask employers to start sharing with the Government the cost of paying people’s salaries. Full details will follow by the end of May.”

A total of 7.5 million jobs in almost 1 million businesses are being paid through the scheme, with £10 billion so far paid out.

The extension of the Job Retention Scheme was welcomed by Retra, which, along with organisations including the British Retail Consortium (BRC), the Confederation of British Industry (CBI) and the Federation of Small Businesses (FSB), has been lobbying for the scheme not to come to a hard stop at the end of June.

Retra’s chief executive, Howard Saycell, said: “Today’s announcement will be very reassuring for our members, who are rightly concerned about the future of their furloughed staff. 

“The details of how the scheme will “taper” after August 1 are not yet available, but today’s announcement gives some welcome assurance in these very challenging times.”

Responding to the Chancellor’s announcement, the FSB’s national chairman, Mike Cherry, said: “Extending the Job Retention Scheme and allowing small firms to furlough staff on a part-time basis will protect thousands of livelihoods over the months ahead. 

“Our members have been telling us loud and clear that the ability to furlough staff on a part-time basis will be central to aiding gradual recovery at a time when economic activity is still in the doldrums.

“We await further detail on the contributions that will be required of small employers after July. We need to ensure that those obligations are affordable for the many businesses that have had no revenue coming in for months now, but still have fixed overheads to worry about.”

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