News Britain extends its coronavirus wage subsidy scheme by four months

Britain extends its coronavirus wage subsidy scheme by four months

Twitter Facebook Reddit Pinterest Email

Britain has extended its job retention scheme – the costly centrepiece of attempts to mitigate the economic impact of coronavirus – by four more months but has told employers they will soon have to help meet the cost.

Finance Minister Rishi Sunak told Britain’s parliament on Tuesday there would be no changes to the scheme until the end of July.

The subsidy pays 80 per cent of the wages of 7.5 million workers temporarily laid off up to £2500 ($A4750) a month.

From August, the scheme will continue with greater flexibility to support transitions back to work, allowing employers to bring furloughed employees back on a part-time basis.

“We will ask employers to start sharing with the government the cost of paying people’s salaries,” Mr Sunak said.

The Coronavirus Job Retention Scheme is expected to limit the rise in unemployment in Britain because of the economic fallout from the pandemic.

But at £10 billion ($19 billion) a month, its cost is approaching the amount of money Britain spends on its public health services.

Mr Sunak has previously said such levels of spending are unsustainable.

An employers’ group said including part-time workers in the furlough scheme would help companies to get back up to speed. But it said it needed more information on how companies would be asked to contribute.

“Many firms that would normally be on strong footing are still in dire straits,” said Edwin Morgan, director of policy at the Institute of Directors.

Mr Sunak said he would provide further details by the end of May.