Relief for millions of workers and heartburn for millions of employers as Chancellor Rishi amended rules to protect staff and businesses from the Covid-19 pandemic.
The chancellor said the UK scheme to pay wages of workers on leave because of coronavirus will be extended to October, BBC reported. But he said the government will ask companies to “start sharing” the cost of the scheme from August.
A quarter of the workforce, some 7.5 million people, are now covered by the scheme, which has cost £14bn a month. Employees are getting 80% of their monthly wages up to £2,500.
The chancellor said that from August, the scheme would continue for all sectors and regions of the country but with greater flexibility to support the transition back to work.
Employers currently using the scheme will then be able to bring furloughed employees back part-time.
Mr Sunak will attempt slowly to reduce the cost to the taxpayer of the subsidy scheme, but full details are still to be worked out.
However, sources have told the BBC the Treasury stills expects to be paying more than half the costs between August and October.
Businesses largely welcomed the extension, with business group the British Chambers of Commerce saying the move would bring “significant relief” to employers and workers,
Stephen Phipson, chief executive of manufacturing group Make UK, said it would avoid “a looming cliff edge triggering significant redundancies for many companies and recognises the need for greater flexibility as the economy fires up.”
However, he warned that there was no “silver bullet” and that both government and industry would have to be flexible.
There was also support from the TUC, with general secretary Frances O’Grady saying the extension “will be a big relief for millions”.
But she added: “As the economic consequences of Covid-19 become clear, unions will keep pushing for a job guarantee scheme to make sure everyone has a decent job.”
Paul Johnson, director of the Institute of Fiscal Studies economic think tank, estimates the scheme will have cost nearly £100bn by October. It is thought that about 935,000 businesses signed up for the scheme in total.
Plan to Rebuild
The government on Monday published a detailed document of the long-expected COVID-19 recovery plan, hoping to gradually ease the lockdown measures while at the same time getting the pandemic under control.
Named as “Our Plan to Rebuild: The UK Government’s COVID-19 recovery strategy”, the document published on Monday sets out the three-phase approach, starting this week with further lockdown easing at the start of June and further changes potentially from July 4.
According to the 50-page document, those with jobs in food production, construction, manufacturing, logistics, distribution and scientific research in laboratories should return to the workplace from this week.
People should aim to wear a face-covering in enclosed spaces where social distancing is not always possible and they come into contact with others that they do not normally meet, for example on public transport or in some shops, according to the document.
For students, the government wants children of key workers and those who are vulnerable to go back to school at once and all English primary school children to have at least a month’s teaching before the summer holidays.
Homemade cloth face-coverings can help reduce the risk of transmission in some circumstances, said the government.
People can exercise outside as many times each day as they wish from Wednesday instead of just once a day, according to the government.
Depending on the situation, the government is also planning to allow cultural and sporting events to take place behind closed-doors for broadcast from June.
The third phase, starting at the earliest by July, may see government reopen some of the hospitality industry and other public places.
Those measures will for now be carried out in England only.
And when travelling to outdoor spaces, the document said it is important that people respect the rules in Scotland, Wales and Northern Ireland and do not travel to different parts of the UK where it would be inconsistent with guidance or regulations issued by the relevant devolved administrations.
As of Tuesday morning, there were 224,332 COVID-19 cases in the UK with 32,141 deaths.
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