Boris Johnson signals that targeted furlough extension is on the cards
Boris Johnson has given the clearest indication yet that the government is considering extending the furlough scheme for some sectors beyond next month.
When asked about an extension of the scheme for sectors unable to function due to coronavirus restrictions, the Prime Minister said today that that the government “will continue to show great creativity and flexibility” and that “we are going to fight for every sector of the economy”.
Johnson’s comments to Westminster’s Liaison Committee come just a day after chancellor Rishi Sunak made a similar promise yesterday, when he told MPs that the government would “act in a creative and effective ways to support jobs and employment”.
The furlough scheme – officially known as the Job Retention Scheme – has seen £35bn paid out to 9.6m workers across the UK since it began in May.
The wage subsidy scheme is due to end at the end of next month, with the Treasury reducing its payments to 60 per cent of normal wages, up to £1,875 a month, from 1 October.
Employers are supposed to top up the government’s furlough payment to ensure workers get 80 per cent of their wages, up to £2,500 a month.
However, there have been calls from a number of business lobby groups, and Labour leader Sir Keir Starmer, to extend the scheme for industries that cannot function at full capacity due to Covid restrictions.
CBI boss Dame Carolyn Fairbairn told the Financial Times that it should be extended to stop mass unemployment for sectors such as retail, hospitality and aviation.
When asked if the government would extend the scheme for some sectors, Johnson said: “We will continue to show great creativity and flexibility, which the chancellor has shown, to try to look after every sector of the economy.
“I don’t believe that anybody on this committee seriously imagined the government of this country would come up with something imaginative as the furlough scheme six months ago and we will continue to apply the same levels of imagination.”
It comes as new Office for National Statistics (ONS) figures, released yesterday, show the unemployment rate has jumped to 4.1 per cent.
That was after 48,000 jobs were lost compared to the previous quarter, the biggest quarterly increase since the financial crisis in 2009.