Rishi Sunak considers cutting furlough pay to 60 per cent of wages
As part of a review of the job retention scheme, the government is reportedly considering cutting the 80 per cent wage subsidy to 60 per cent for furloughed staff.
The job retention scheme sees the government pay 80 per cent of wages, up to £2,500 a month, to 6.3m furloughed workers.
However, chancellor Rishi Sunak is looking to “wind down” the scheme gradually over the next few months. One option is to reduce the current subsidy to 60 per cent, with further small reductions to follow, according to the Evening Standard.
Another option being considered is to allow some furloughed staff to work but with a smaller subsidy for the taxpayer.
On Monday, Sunak said there would be no sudden cliff edge in June, when the support is due to stop. He said he is looking at the best way to phase the furlough scheme out and get people back to work.
Labour and other business groups have urged the Treasury to extend or amend the scheme as worries mount that it could cause mass redundancies.
Speaking to ITV last night, the chancellor said: “To anyone who is anxious about this, I want to give them reassurance that there will be no cliff edge to the furlough scheme”.
“I’m working as we speak to figure out the most effective way to wind down the scheme and ease people back to work in a measured way.”
However, he said the government would spend as much on the furloughing scheme as it does on the NHS without changes.
““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 the economy fired up again,” he said.
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