The furlough scheme will not be extended despite pressure from businesses, it has been reported.
Chancellor Rishi Sunak is expected to start winding down the scheme at the end of this month despite the expected delay to ending lockdown in England. As part of the Budget earlier this year, the Chancellor announced he would stop covering 80% of the salaries of those not at work. By designating employees as “furloughed”, employers have been able to recover a portion of employee wage costs up to a £2,500 cap.
The most recent figures showed there were 3.4 million jobs on furlough at the end of April, which was 900,000 lower than the month before. Since the start of the scheme last March, a total of 11.5 million jobs have been supported by furlough at some point at a cost of £64 billion.
From July 1, the Government’s share will fall to 70% with employers contributing 10%, as part of a staged withdrawal of the scheme due to finish completely at the end of September.
Business groups have urged the Chancellor to delay the wind down and hospitality bosses have claimed that as many as 200,000 jobs were at risk.
But MailOnline reported sources close to Mr Sunak insisting the timetable for gradually withdrawing furlough would remain the same.
They said that by extending support to the end of September the Treasury had already ‘gone long’ in case there was any delay to reopening. Mr Sunak is also resisting calls to extend the business rates holiday that is also due to start being withdrawn at the end of the month.
Retail, hospitality and leisure premises have been helped with a 100% relief since last March when the lockdowns first began. The Government is due to reduce the relief to 66% from July 1 and it will remain in place until the end of March next year.
Trade body UKHospitality chief executive Kate Nicholls said: "We recognise that the Chancellor has provided long-term support for the sector which extends into the recovery period, but there is no doubt that any extension to the restrictions will be challenging for sectors yet to open and those still trading at a loss to navigate."
She added: "Among other measures, the Government must postpone business rates payments until at least October and extend the rent moratorium while a long-term solution is found.
"Businesses need a swift, publicly-stated commitment that such support will be in place in the event of any delays, giving them much-needed reassurance after more than 15 months of closure and severely disrupted trading.
"Hospitality is desperate to get back to what it does best and can play a key role in the economic recovery of the UK – but only if it is given the proper support."
