Furlough scheme to be ‘wound down’ as costs are ‘not sustainable’

The coronavirus furlough scheme will be "wound down" as the government says the cost of it is no longer sustainable.

Chancellor Rishi Sunak told ITV News, that the scheme has cost £8billion so far as millions of workers have been given the majority of their pay.

But Mr Sunak said that the government couldn't continue the process in the long term.

The furloughing scheme was brought in to help companies who would struggle during the pandemic.

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It was decided in March that 80% of salaries would be supplied to workers who had been furloughed by their employers.

Mr Sunak also stressed however that there would be no "cliff-edge" cut off to the furlough scheme.

He said that ministers were looking at ways to wind down the scheme – which is currently due to run to the end of June.

People would be eased back into work in a "measured way", he said, and added: "To anyone anxious about this, I want to reassure that there will be no cliff-edge to the furlough scheme.

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Chancellor Rishi Sunak said the furlough scheme has cost £8 billion pound so far

"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.

"As some scenarios have suggested, we are potentially spending as much on the furlough scheme as we do on the NHS for example.

"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 and the economy fired up again."

According to the Liberal Democrats there should be a "tapered" end to the programme, with the Treasury paying 50% of salaries for the first month after people return to work, falling to 30% after the third month, with employers picking up the full bill after the fourth.

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Sir Ed Davey, Acting leader, said: "The Government furlough scheme has done a good job at helping thousands of businesses through the lockdown, but the shadow of lockdown will be long, and the 'new normal' will be extremely challenging.

"Businesses and their staff need time to plan, and confidence the Government will be there, ready to support."