More flexibility for part-time work could be part of moves to wind down the government’s furlough scheme.
Chancellor Rishi Sunak is set to reveal the future of job retention scheme later today amid growing calls for an extension for hard-hit sectors such as travel and hospitality.
Long-term support for sectors such as aviation and hospitality, which will effectively be shut down for more months, is expected to be announced.
Update: UK government extends furlough Job Retention Scheme to October
An unnamed senior minister told The Times: “Sectors like aviation and restaurants are going to rightly need our support for a long time to come.
“But the post-coronavirus economy is going to look very different from what it was before. We have to accept that not all firms are going to be able to survive.”
Furloughed staff able to return to work on a part-time basis could have their salaries “topped-up’ by government.
More than six million people are having 80% of their wages paid – up to £2,500 a month – by the government at a cost of £14 billion a month while they are temporarily on leave from their jobs.
Sunak has previously warned the scheme, previously extended until June 30, was not “sustainable” at its current rate.
Expected changes to the scheme come as the government tries to get more people to return to work as it gradually eases the lockdown to prevent the spread of Covid-19.
The government published guidance to employers on Monday night on making workplaces safe during the pandemic. The eight guides covered a range of different types of work, from offices and contact centres to shops and factories.
Almost a quarter of the UK’s workforce has been furloughed, with 80% of employee’s wages being paid by the government.
Firms could be encouraged to bring furloughed staff back to work gradually while maintaining social distancing.
Prime minister Boris Johnson described the furlough initiative on Monday as “one of the most remarkable features of the government’s response” to the pandemic and “unlike anything seen internationally”.
“Six-and-a-half million people currently are being supported. It is absolutely right that we should do it.”
He added he did not want to steal his chancellor’s thunder but said Sunak would update MPs on Tuesday.
Sunak last week promised there would be no “cliff edge” cut-off.
Torsten Bell, chief executive of the Resolution Foundation think tank and an early advocate of the scheme, warned against it being removed too quickly.
“Moving too quickly could spark a huge second surge in job losses at a time when unemployment already looks set to be at the highest level for a quarter of a century,” he said.
“This policy has made a huge difference in this crisis. It now needs careful and gradual change to ensure the benefits it has provided are secured rather than squandered.”
Update: UK government extends furlough Job Retention Scheme to October