UK's COVID19 Job Saving Scheme to Tapper Off from August as Economy Begins to Open: Rishi Sunak

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UK's COVID19 Job Saving Scheme to Tapper Off from August as Economy Begins to Open: Rishi Sunak

United Kingdom Chancellor Rishi Sunak has set out the United Kingdom government's plans to tapper off the COVID19 job retention scheme from August as the economy gradually opens up from the COVID19 lockdown.

The Finance Minister on Friday said the furlough, or forced leave, scheme, under which the United Kingdom taxpayer covered 80 percent of the wages of nearly a million jobs, will begin to wind down with employers asked to contribute a modest proportion of those costs from August before it ends in October.

The furlough scheme can not continue indefinitely. Employers will be asked to contribute, alongside the taxpayer, to pay the wages of theur employees, said Sunak, as he highlighted that no british government in history had undertaken a scheme at such a scale.

From July 1, a flexible furlough will be in place. Employers will have maximum flexibility to decide to bring back employees for a number of days per week, he said.

As part of the changes, in June and July, the scheme will continue as before with the government covering 80 percent of wages up to GBP 2,500 with no employer contribution.

In the month of August, the taxpayer contribution will stay at 80 per cent, with employers asked to pay National Insurance and Employer Pension Contributions, which are about 5 per cent of employment costs.

By September, employers will be asked to start paying towards people's wages, with taxpayer contribution dropping to 70 per cent of the furlough grant and employers covering 10 per cent. By October, taxpayer contribution will fall to 60 per cent and emloyers will pay 20 per cent before the scheme closes at the end of the month.

I have aimed to make the scheme as flexible and generous as possible. But there will be hardship ahead for many and I will work very hard to get peple back into jobs, he said, when asked about looming unemployment as the lockdown is lifted.

The minister, who has been at the forefront of the United Kingdom's economic response to the COVID19 pandemic, also confirmed that a tax payer funded grant for self-employed workers has also been extended for another three months, with a second payment of upto GBP 6,500 available undr the Self-Employment Income Scheme. At the end of October, all such schemes will be wound down to focus on opening up the economy.

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Not everything look the same as before. We won't be able to put out the key into lock and step into the world as it was in January. But the government will do that it can to help people thrive in the post Coronavirus world, Sunak added.

The Minister who was addressing the daily Downing Street briefing, revealed that a further 324 fatalities over the previous day meant that the United Kingdom COVID19 death toll now stands at 38,161.