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Furlough scheme could be cut, newspapers report

The government is said to be considering cutting the proportion of workers' wages it pays under its Covid-19 furlough scheme to 60% from 80%, reports the Evening Standard.

The scheme now supports the wages of 6.3m employees, almost a quarter of the UK’s private-sector workforce, who have temporarily stopped work at a cost of around £8bn.

The support is due to stop at the end of June, after being extended by a month.

If it does proceed, it will come as a huge blow to the events industry, as events businesses won’t be seeing any income until lockdown restrictions are lifted. Many redundancies would be expected as a result. The events industry's trade associations, led by the Business Visits and Events Partnership, have called for extended measures to protect businesses until cashflow resumes.

Chancellor of the exchequer Rishi Sunak said, 5 May, that there would be no sudden cliff edge in June but that he was looking at the best way to phase the scheme out and ease people back to work “in a measured way”.

According to the Evening Standard, a leading option is to lower the proportion of furloughed staff's wages that the government pays to employers to 60% from 80%.

Employers are encouraged to make up the difference, however are not obliged to. Another approach would be to allow some furloughed staff to work, but with a smaller taxpayer subsidy.

The Treasury declined to comment on the possible options for winding down the scheme.

The government is due to review the lockdown on 7 May, and prime minister Boris Johnson is expected to give more details of his approach on 10 May.