Major furlough update as employers to pay ‘up to 30% of wages from August’



Employers will have to pay at least a fifth of the wages of furloughed workers from August as the scheme is wound down, it has  been reported.

Bosses at businesses across Stoke-on-Trent and the rest of the country currently signed up to the furlough  programme set up by the government in March face having to make up between 20 per cent and 30 per cent of their employees’ pay packets.

Companies will begin to share the cost from August, after Chancellor Rishi Sunak announced an extension until October.

Under new terms being drafted up, employers will be allowed to take furloughed workers back part-time, and all firms using the coronavirus job retention scheme will be required to make the payments, even if they remain closed.

An announcement is due to be made in the coming days.

Mr Sunak has already voiced concern over companies becoming too reliant on it.

The scheme – which is costing the government billions – has acted as a source of much-needed relief for under-pressure businesses.

It currently has  7.5million jobs signed up as businesses faltered under coronavirus lockdown, with every sector from hospitality to travel and tourism impacted in a major way.

Big employers in North Staffordshire to have used furlough include JCB, Churchill China and Steelite International.

A Treasury source told The Times: “We’ve got two full months of support left and afterwards the government will help to pay people’s wages, but it’s fair to everyone that businesses contribute as they get back to work.”

The current furlough scheme pays 80 per cent of a worker’s salary up to £2,500 a month, and is supporting about 7.5million jobs, representing about a third of the private-sector workforce.

The Office for Budget Responsibility has already warned the scheme could cost up to £80billion.

Latest retail figures on Friday showed that retail sales dropped a record 18.1 per cent in April on the back of hundreds of thousands of branch closures.

An estimated 20,000 stores will be lost by the end of the year, according to figures from the Centre for Retail Research, a massive jump on the 4,547 that shut in 2019.

The research suggests the effect of the pandemic on Britain’s town and city centres will hit the industry for the rest of the year.

Speaking in the House of Commons earlier in May, Mr Sunak said: “Until the end of July there will be no changes whatsoever. Then from August to October, the scheme will continue for all sectors and regions of the UK but with greater flexibility to support the transition back to work.

“Employers currently using the scheme will be able to bring furloughed employees back part-time. And we will ask employers to start sharing with the government the cost of paying people’s salaries.

“Full details will follow by the end of May, but I want to assure people today of one thing that won’t change: workers will through the combined efforts of Government and employers continue to receive the same level of overall support as they do now at 80% of their current salary up to £2,500 a month.”





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