The Chancellor is preparing to wind down the government’s furlough scheme but promises there will be “no cliff edge”.
In an interview with ITV News yesterday, Rishi Sunak said he is preparing to phase out the scheme as the economy begins to get back on its feet.
He said: ”To anyone anxious about this I want to give them reassurance that there will be no cliff-edge to the furlough scheme.”
He went on to say: "I’m working, as we speak, to figure out the most effective way to wind down the scheme and ease people back into work in a measured way.
“But, as some scenarios have suggested, we are potentially spending as much on the furlough scheme as we do on the NHS, for example. Now clearly that is not a sustainable situation, which is why, as soon as the time is right, we want to get people back to work, get our economy fired up again.”
According to the Office of National Statistics, 6.3 million employees in the UK have been furloughed since the scheme went live two weeks ago.
Although there is pressure for some sectors, particularly the hospitality industry, to extend the scheme, there is also concern that it offers little incentive for businesses to reopen.
The government has introduced a raft of additional measures to help small businesses, the latest being its Bounce Back Loans launched yesterday, enabling small businesses to borrow up to £50,000 with a 100% government guarantee.
By mid-day yesterday it had received tens of thousands of applicants, said the Chancellor.