Furlough extension: Will furlough be extended beyond October?

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Furlough extension: Will furlough be extended beyond October?

The furlough scheme was introduced in a bid to preserve jobs and stop people being fired when the coronavirus lockdown began. Under the scheme, wor

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The furlough scheme was introduced in a bid to preserve jobs and stop people being fired when the coronavirus lockdown began. Under the scheme, workers continued to be paid up to 80 percent of their wages up to £2,500 a month. Anyone working in a full time position on March 19 was able to be furloughed, including people on zero hours’ contracts or those working flexibly. The scheme saved millions of jobs in the UK as the country entered a challenging and unprecedented event. But, the furlough scheme is due to wind down in October, prompting many to wonder if it will be extended.

Will the furlough scheme be extended past October?

As it stand, the Government has given no indication the scheme will last past October.

Furlough has already been extended twice, once to June, then again into October.

The Government has announced a £1,000 retention bonus to employers willing to bring back furloughed employees to work, in what is hoped will be an incentive for companies.

In his Summer Statement, the Chancellor dismissed any speculation that the scheme would run past October.

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The National Institute of Economic and Social Research (NIESR) has said ending the scheme, which supports about 9.5million people, would be a “mistake”.

Garry Young, deputy director of NIESR said: “The planned closure of the furlough scheme seems to be a mistake, motivated by an understandable desire to limit spending.

“The scheme was intended by the Chancellor to be a bridge through the crisis and there is a risk that it is coming to an end prematurely and this increases the probability of economic scarring.”

Manufacturing body Make UK also agreed the scheme should last past October for hard-hit sectors that are already liquidating jobs.

Stephen Phipson, chief executive of Make UK noted that Germany, Belgium, Australia and France had all extended or launched new wage support schemes which will last into next year.

Mr Phipson said: “The protection of key sills should be a strategic national priority as this will be the first building block in getting the economy up and running.

“The starting point for this should be an extension of the Job Retention Scheme to those sectors which are not just our mot important, but who have been hit hardest.

“Failure to do so will leave us out of step with major competitors and risk a loss of key skills when we can least afford to do so.”



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