The United Kingdom scheme to pay salaries of workers on leave because of coronavirus will be extended to October, Chancellor Rishi Sunak said.
He said the government backed workers and companies going into the lockdown and would support them coming out.
Sunak confirmed that employees will continue to receive 80% of their monthly wages up to £2,500. He,however, noted that government will ask companies to “start sharing” the cost of the scheme from August.
“Some 7.5 million workers are now covered by the scheme, up from 6.3 million last week,” he said.
The chancellor told the parliament that from August, the scheme would continue for all sectors and regions of the country but with greater flexibility to support the transition back to work, adding that employers currently using the scheme would be able to bring employees on leave of absence back on part-time.
“I’m extending the scheme because I won’t give up on the people who rely on it. Our message today is simple: we stood behind Britain’s workers and businesses as we came into this crisis, and we will stand behind them as we come through the other side,” the Chancellor said.
He also rejected suggestions some people might get addicted to leave of absence if it was extended.
“Nobody who is on the furlough scheme wants to be on this scheme.
“People up and down this country believe in the dignity of their work, going to work, providing for their families, it’s not their fault their business has been asked to close or asked to stay at home,” Sunak stated.
Shadow Chancellor, Anneliese Dodds, said she had only learned of the changes and would examine them “very, very carefully.”
She added that it was “critically important” that workers who had to continue on leave if absence “are not penalised for that choice.”
Businesses in the UK welcomed the extension, with the British Chambers of Commerce saying the move would bring “significant relief” to employers and workers.
Stephen Phipson, chief executive of manufacturing group Make UK, said it would avoid “a looming cliff edge triggering significant redundancies for many companies and recognises the need for greater flexibility as the economy fires up.”
However, he warned that there was no “silver bullet” and that both government and industry would have to be flexible.
There was also support from the TUC, with General Secretary, Frances O’Grady saying the extension “will be a big relief for millions.”
“As the economic consequences of COVID-19 become clear, unions will keep pushing for a job guarantee scheme to make sure everyone has a decent job,” O’Grady said.