Rishi Sunak faces pressure to extend furlough scheme
Chancellor Rishi Sunak is facing mounting pressure to extend the furlough scheme in some form, amid fears of a wave of unemployment later in the year.
Opposition political parties and business groups are increasingly worried that plans to wind down the furlough scheme in October are premature. The Bank of England yesterday said 2.5m people were likely to lose their jobs by the end of the year.
The chancellor travelled to Scotland to highlight the financial support the UK government is providing to the four nations.
But Scottish National Party shadow chancellor Alison Thewliss today told Sky News “the best way” to support jobs “would be to extend the furlough scheme”.
She said: “10s of thousands of jobs are either being lost or on the verge of being lost. The chancellor really should take heed of this and extend the furlough scheme until at the very least the end of the year.”
Sunak today did not completely rule out an extension in any form. But he said: “If you look at it from start to finish, through the furlough scheme the government will have been stepping in to help pay people’s wages for eight months.
“I think most reasonable people looking at that will say gosh that’s not something that can carry on forever.”
Business groups call for targeted support
Business groups are nervous about firms failing when help is withdrawn.
Although it did not call for an extension of the furlough scheme, the CBI today said the government “must get the building blocks in place to protect jobs, as well as lives”. It said local lockdowns posed a further threat to the economy.
The Federation of Small Businesses has called for “further targeted support” to help companies and workers as government support is wound down.
Sunak plans to wind down the job retention scheme by October. It has supported more than 9m jobs at a cost to the government of more than £33bn. It pays 80 per cent of the wages of workers who may otherwise be laid off.
The chancellor gained an ally in the Bank of England governor Andrew Bailey yesterday.
He said: “I think the chancellor has set out a very clear path for [the end of furlough]. And I think it is good that he set out a very clear path. It’s been a very successful scheme.”
“But he’s right to say we have to we have to look forwards now and move forward.”