Updated at 5:30pm
Chancellor of the Exchequer, Rishi Sunak, led today’s daily Downing Street press briefing announcing that employers must start contributing towards the furlough scheme from August.
He announced that the Coronavirus Job Retention Scheme (CJRS) cannot go on forever and laid out several adaptations to the current operation of the scheme, as well as information regarding the gradual winding down of it later in the year.
In June and July the scheme will continue as usual and employers won’t have to contribute.
From August, a Guardian live blog explained that employers will only have to pay national insurance and employer pension contributions and that the taxpayer will continue to pay 80% of the wages.
Employers will be expected to start contributing towards wages from September – 70% will come from taxpayer money and ten per cent from businesses.
By October, Sunak plans to wind down the scheme and employers will be responsible for contributing 20% towards staff wages with taxpayers making up the remaining 60%. After this the scheme will close.
As part of the Government’s plan to take businesses off the scheme, and gradually return staff to work, flexible arrangements to the furlough scheme will come into play from July 1 which will allow businesses to bring back staff for a few days per week.
8.5million workers are currently furloughed under this scheme and Metro reported that it has cost £15billion so far.
Updated at 11:30am
Chancellor of the Exchequer, Rishi Sunak, is expected to make an announcement regarding changes to the Coronavirus Job Retention Scheme (CJRS) which could be as soon as today.
According to the Express, Sunak is finalising changes to the CJRS which has cost the UK economy £15billion so far.
It has also been revealed that employers are set to be asked to contribute 20% towards the wages of furlough staff.
In addition, employers will likely be asked to keep paying into employees’ pension funds from August. As well as paying this, firms will likely be told to cover National Insurance.
While the furlough scheme has proved to be a lifeline for businesses across the UK, The Office for Budget Responsibility estimates that the bill for it, coupled with the cost of coronavirus, will leave the UK with its highest peacetime deficit.
As part of the furlough scheme, the Government currently contributes 80% of the salaries of workers whose jobs have been put on hold following the imposed lockdown measures, which has halted the economy.
Subscribe now to myGrapevine+ and get access to exclusive new content, and the full content archive.