News, Culture & Society

Employers will have to pay a quarter of furloughed staff’s wages from August

A quarter of the wages of furloughed staff will be paid by employers from August, Rishi Sunak is expected to announce imminently. 

The Chancellor will ask businesses to contribute 25 per cent of the wages paid through the government’s furlough scheme unveiled in March. 

He will also explain how people will be able to work part-time while still having their wages part-paid by his Job Retention Scheme.

Mr Sunak is expected to make the announcement either today or over the weekend as the government seeks to restart the engines of UK plc.

It comes as 8.4 million workers are now furloughed to a cost of £15billion to date, according to data provided by HM Revenue & Customs. 

A quarter of the wages of furloughed staff will be paid by employers from August (pictured, closed shops in a deserted Carnaby Street in central London)

Chancellor Rishi Sunak will ask businesses to contribute 25 per cent of the government's furlough scheme unveiled at the start of lockdown

Chancellor Rishi Sunak will ask businesses to contribute 25 per cent of the government’s furlough scheme unveiled at the start of lockdown 

From August, employers must contribute one quarter of the furlough scheme, in which 80 per cent of wages for workers are paid by the state. 

Mr Sunak’s radical scheme will be closed to new entrants from the end of June, according to Treasury plans seen by The Daily Telegraph. 

All employers will be required to make the payments if they continue to furlough their staff, regardless of whether their business has been allowed to open. 

Over two million self-employed workers are also receiving grants to cover income lost through the disruption caused by the pandemic.

Derek Cribb, CEO of the Association of Independent Professionals and the Self-Employed (IPSE), has said it would be “perverse” for the Government to not offer continued financial support for the self-employed.

Speaking on BBC Radio 4’s Today programme, Mr Cribb said: “I think it would be quite unusual and quite perverse actually if the Government don’t extend the scheme.

“We’ve got five million self-employed out there, which, over two million have drawn on the scheme to date. They’re looking at support coming to an end on Sunday and yet the Job Retention Scheme, for those in employed roles, has been extended until October – so there seems to be quite a substantial disconnect in support there.”

He added: “I think it’s absolutely reasonable that we’d expect to see some sort of taper, as it were, on the support given to the self-employed over the period. But again, mirroring the offer to those who are employed to the self-employed and potentially extending it as well.” 

Mr Sunak is expected to make the announcement either today or over the weekend as the government seeks to restart the engines of UK plc (pictured, shops in Slough)

Mr Sunak is expected to make the announcement either today or over the weekend as the government seeks to restart the engines of UK plc (pictured, shops in Slough)

The Office for National Statistics said borrowing was up £51.1billion on the same month in 2019

The Office for National Statistics said borrowing was up £51.1billion on the same month in 2019

All employers will be required to make the payments if they continue to furlough their staff, regardless of whether their business has been allowed to open

All employers will be required to make the payments if they continue to furlough their staff, regardless of whether their business has been allowed to open

More than one in three private sector workers are now being paid by the state.

The Chancellor recently warned that Britain is facing a ‘severe recession’ and warned that lockdown is having a ‘severe impact’ on the economy. 

His claims have been echoed by economic analysts who in early April estimated that lockdown has costed Britain around £2.4billion per day.

The Bank of England forecast this month a 30 per cent contraction of GDP in the next quarter before potentially rising by 15 per cent by late 2020.

Bank staff believe this would represent the biggest nosedive of the industrial period, equivalent to the agrarian Great Frost crisis 300 years ago. 

Mr Sunak has extended the Job Retention Scheme until the end of October, though he said it would be altered in August to encourage people to return to work. 

Over two million self-employed workers are also receiving grants to cover income lost through the disruption caused by the pandemic

Over two million self-employed workers are also receiving grants to cover income lost through the disruption caused by the pandemic

The figures appear to be even worse than the doomladen estimates produced by the independent OBR watchdog last week

The figures appear to be even worse than the doomladen estimates produced by the independent OBR watchdog last week

The Chancellor told MPs: ‘We are in deep consultation with both unions and business groups to make sure we get the design of the second part of this scheme right.

‘I think it is right both for the economy and, indeed, for the taxpayer to ask employers to make a contribution.

‘They will have the benefit of flexible furloughing to help offset that.’ 

This week, the government vowed not to increase income tax, VAT or national insurance despite coronavirus wreaking havoc on the public finances. 

Boris Johnson also promised that the triple lock on state pensions – which means they rise by the highest of inflation, earnings, or 2.5 per cent – would be maintained. 

Read more at DailyMail.co.uk