Friday 29 May 2020 10:38 am

Sunak set to tell employers to contribute to furlough scheme payments

Save our SMEs

Chancellor Rishi Sunak is expected to tell employers today that they will have to start contributing to the government’s massive furlough scheme which is paying the wages of millions of UK workers.

Sunak will say companies must pay between 20 per cent and 30 per cent of the costs of the programme – the centrepiece of his attempts to protect the economy from the coronavirus shutdown – according to media reports.

Read more: UK firms face ‘difficult decisions’ when furlough scheme winds down

He is also expected to say when workers on the scheme, which is due to run until the end of October, can return on a part-time basis, something many firms want as they build up operations gradually.

Around 8.4m workers, or about one in three private sector employees, are covered. The cost to the public finances so far is £15bn.

Under the scheme employees are unable to work for their company and the government pays 80 per cent of their monthly wages up to £2,500 until the end of October.

Some employers worry that they will not afford to cover a slice of staff wages with the economy still in the doldrums.

The Institute of Directors said this week that a quarter of its member firms using the scheme would struggle to pay a share of the costs, raising the risk of job losses.

Sunak has previously said the scheme is too expensive to continue indefinitely.

Read more: Treasury: Furlough scheme now covers 8.4m workers

Britain’s borrowing in April alone of over £60bn was equivalent to almost all of the previous financial year.

About 2.3m claims totalling £6.8bn have been made for a similar programme for self-employed people. That scheme is due to close this weekend.

Benefit claims have also spiked with 1.8m claims for Universal Credit claims between 16 March and the end of April.

Universal Credit is paid to people in work as well as those who have lost their jobs.

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