Furlough: Rishi Sunak urged to make scheme permanent to protect jobs and finances | Personal Finance | Finance


Furlough was first established by the Government back in 2020 as many businesses were forced to close their doors due to COVID-19. The measure allowed individuals to keep their jobs while still being paid a proportion of their salary. The Coronavirus Job Retention Scheme (CJRS) as it is more formally known, is intended to be a temporary measure, but has been extended a number of times due to the ongoing impacts of the pandemic.

It is hoped such a policy would automatically protect those who lose their jobs if there were to be any future downturns.

This would also mean unemployed individuals would not have to wait for the Government to redesign support measure in every downturn.

Mike Brewer, Chief Economist at the Resolution Foundation, commented on the issue.

He said: “After a decade of cuts and reinvention via Universal Credit, the UK’s welfare system has been upended again by the COVID-19 pandemic.

“But the safety net that millions of new welfare recipients have relied upon, from furloughed workers to first-time UC claimants, has been very different.

“It has been far more generous than the system the UK had in place pre-Covid.

“The big challenge now is whether the UK’s post-pandemic welfare system should retain welcome new elements such as earnings insurance, and address key problems such as the low level of the basic safety net and sick pay.

“Simply returning to the old system is not good enough after what the country has gone through.”

Other suggestions made by the Resolution Foundation include providing further support for under 25s on Universal Credit, and increasing the child element of the benefit by £5 per week.

However, the biggest crisis welfare change has been furlough and SEISS, and the Government has been urged to recognise this going forward.

Recently, furlough alongside SEISS, was provided with an additional extension, in a move which the Government stated would protect people beyond the end of nationwide restrictions. 

The Chancellor Rishi Sunak commented on the extension to furlough within his most recent Budget speech, closely watched by the UK. 

He said: “The furlough scheme will be extended until the end of September. For employees, there will be no change to the terms and they will continue to receive 80 percent of their salary for hours not worked until the scheme ends.

“As businesses reopen we’ll ask them to contribute alongside the taxpayer to the cost of paying their employees. Nothing will change until July, when we will ask for a small contribution of just 10 percent, and 20 percent in August and September.

“The Government is proud of the furlough, one of the most generous schemes in the world, effectively protecting millions of people’s jobs and incomes.”

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