UK unveils plan to wind down COVID-19 furlough scheme

UK Chancellor Rishi Sunak has announced a plan to wind down the coronavirus furlough scheme as the country seeks to reopen its economy.

Chairing the Downing Street’s daily briefing, Sunak on Friday unveiled a series of changes to the Coronavirus Job Retention Scheme, which he said has so far covered the wages of 8.4 million staff unable to work during lockdown, reports Xinhua news agency.

“As we reopen the economy, there is broad consensus across the political and economic spectrum, the furlough scheme cannot continue indefinitely,” he told reporters.

According to Sunak, employers will be asked to contribute, alongside the taxpayers, to pay the wages of their staff.

In August, the taxpayer contribution will stay at 80 per cent.

Employers will only be asked to pay National Insurance and employer pension contributions.

They will be asked to pay 10 per cent of people’s wages in September and 20 per cent in October respectively, said the chancellor.

In March, Sunak had launched the Scheme, under which the government covers 80 per cent of wages for employees who are unable to work due to coronavirus pandemic, up to 2,500 pounds ($3,076) a month.

During the briefing, Sunak also extended the Self-employment Income Support Scheme, which has so far seen 2.3 million claims.

Applications will open in August for a second and final grant, which will be paid out in a single instalment, covering three months’ worth of average monthly trading profits, said the chancellor.

But despite the government’s intervention to protect as many jobs as possible, it can’t protect every job, he noted.

Despite the collective effort to reopen the country, Sunak warned that “not everything will look the same as before”.

“It won’t be the case that we can simply put the key in the lock, open the door and step into the world as it was in January,” he added.