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Furlough latest - 3 announcements we're expecting from Chancellor Rishi Sunak today

On Friday, the Chancellor is expected to announce a raft of changes to the furlough scheme as the state subsidy is wound down for more than 8.4million workers

More responsibility will be handed to employers from August as the Government's flagship wage scheme is wound down for workers.

Firms will be asked to increase their furlough contributions at the end of summer, as the scheme, which has so far cost the Treasury £150billion, slowly closes to new applicants.

It comes as the Government revealed 8.4million are now on furlough, an initiative that was introduced in early April to help cover the wages of those who faced redundancy on the back of coronavirus pandemic.

Currently, it pays 80% of wages, with employers asked to contribute the remaining 20%. It's paid up to a maximum of £2,500 a month, equivalent to the UK's average salary of £30,000.

Over the past month, it's had huge pick up from thousands of small independent chains amid the high street lockdown.

Billionaires including Acradia boss Philip Green and Richard Branson have also applied for financial help, drawing huge criticism from the public.

Today, Chancellor Rishi Sunak is expected to announce a raft of new changes as the Government looks to close the scheme and get Britain back to work.

Scheme to change to 60%

Sunak is today expected to announce that employers will have to pay a fifth of the wages of furloughed staff, as well as national insurance and pension contributions, from August. This will equate to around 25% per personn.

Under the changes, it is understood that the government will pay 60% of each wage up to a cap of £2,500 a month, according to The Guardian.

Asked about the furlough scheme, environment secretary, George Eustice said the Treasury could not subsidise people’s wages "indefinitely".

"Now I don’t know what Rishi Sunak, the Chancellor, will say later in terms of self-employed and the furlough scheme for them, but I think there is a general overarching message here that we’ve had a very generous furlough scheme in place to help people through these extraordinary times and to ensure that businesses’ overheads could be covered," he said.

Chancellor Rishi Sunak has already confirmed that the scheme will continue until October, but by gradually lowering pay, the government will avoid a "cliff edge" cut off.

You'll be allowed to start work part time

Under new terms being drafted up, employers will also be allowed to take furloughed workers back part-time.

A Treasury source said: "We’ve got two full months of support left and afterwards the government will help to pay people’s wages, but it’s fair to everyone that businesses contribute as they get back to work."

Scheme to close to new workers

Elsewhere, the Chancellor is also said to be in talks to close the scheme to new applicants at the end of July.

All high street businesses were ordered to close on March 23 after the UK went into lockdown following a surge in coronavirus cases.

Employees across the UK were told to work from home where possible, leading employers who were facing significant losses to apply for help via the Chancellor's salary scheme.

Now, people are being phased back to work, which means fewer people should be joining it.

Speaking in the House of Commons earlier in May, Rishi Sunak said: "Until the end of July there will be no changes whatsoever. Then from August to October, the scheme will continue for all sectors and regions of the UK but with greater flexibility to support the transition back to work.

"Employers currently using the scheme will be able to bring furloughed employees back part-time. And we will ask employers to start sharing with the government the cost of paying people’s salaries.

"Full details will follow by the end of May, but I want to assure people today of one thing that won’t change: workers will through the combined efforts of Government and employers continue to receive the same level of overall support as they do now at 80% of their current salary up to £2,500 a month.


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