Coronavirus has changed everything. Make sense of it all with the Waugh Zone, our evening politics briefing. Sign up now.
The coronavirus furlough scheme will be extended to the end of October, the chancellor has announced.
Rishi Sunak said from the end of July there will be measures to ensure the cost of the job retention scheme is shared more with employers but workers will continue to receive 80% of their current salary, up to £2,500.
From August to October, the scheme will continue for all sectors and UK regions but employers will also be able to bring furloughed employees back part-time while sharing the cost.
In total, 7.5m people have been furloughed under the scheme, at a cost of £10bn to taxpayers, government sources revealed. Nearly a million firms - 935,000 in total- have been involved in making claims so far.
Announcing the move in response to an urgent question from Labour, Sunak told the Commons: “I’m extending the scheme because I won’t give up on the people who rely on it.
“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.”
It comes amid growing concern at the economic cost of the lockdown, with Sunak pointing out last week that the furlough scheme was costing taxpayers nearly as much as the NHS.
Workers have been encouraged to return to their jobs from Wednesday if they cannot work from home as part of Boris Johnson’s slow easing of the lockdown, amid Labour and union concerns about safety.
The government has faced criticism for suggesting workers are “addicted” to furlough and need to be “weaned off” the scheme but Sunak disowned the language used in some briefings.
The chancellor said: “The use of the word addiction is not one that I have ever used, and not one that I agree with.
“Nobody who is on the furlough scheme wants to be on this scheme.
“People up and down this country believe in the dignity of their work, going to work, providing for their families.
“It is not their fault that their business has been asked to close, it is not their fault that they have been asked to stay at home, and that is why I established this scheme to support these people and their livelihoods at this critical time.”
Shadow chancellor Anneliese Dodds said many were taken aback by comments attributed to government officials.
She said she had only heard about the chancellor’s changes “in the last few seconds” and will examine them “very, very carefully”.
Dodds said people do not want to be furloughed, adding: “It’s critically important they are not penalised for that choice.
“We welcome the flexibility mentioned, we’ve asked for this repeatedly.”
Frances O’Grady, general secretary of the Trades Union Congress, said: the move would be “a massive relief for millions of working families” and that Sunak was right to phase in part-time working – a key union demand.
Edwin Morgan, director of policy at business group the Institute of Directors called for further clarity on how employers would contribute to the scheme.
“Many firms that would normally be on strong footing are still in dire straits,” he said.
Morgan added that firms which do not benefit from the scheme also need help.
“The extension puts yet more onus on helping those who have been left out in the cold,” he said.
“Countless small company directors have found scant support, and government shouldn’t turn a blind eye to them.”
Mike Cherry, chairman of the Federation of Small Businesses, welcomed the extension of the “hugely beneficial” scheme.
“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,” he said.
British Chambers of Commerce director general Adam Marshall said: “The extension of the job retention scheme will come as a huge help and a huge relief for businesses across the UK.
“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.”
But he warned that further support may still be needed for companies unable to operate for an extended period of time or those who face reduced capacity or demand due to restrictions.