Could furlough be extended again? Government urged to continue scheme or risk mass unemployment

Chancellor Rishi Sunak is being urged by MPs and key members of British industry to extend the furlough scheme or risk ‘mass unemployment’ in the UK.

The Government’s job retention programme – which allows businesses to claim back 80% of their employees’ wages – was launched during lockdown and has supported more than 9.6 million workers in the UK.

Headed by Sunak, the furlough scheme was originally due to run into the summer, but was extended by a further four months in May.

The Chancellor has insisted the scheme will not stretch any further, but failing to take action could lead to millions of people being left out of work according the Treasury Select Committee.

Chairman, Mel Stride, said a “targeted” approach ought to be considered.

“The key will be assisting those businesses who, with additional support, can come through the crisis as sustainable enterprises, rather than focusing on those that will unfortunately just not be viable in the changed post-crisis economy.”

The Guardian also reports that Make UK, which represents 20,000 companies in engineering, manufacturing, technology and the industrial sector, were fearing a ‘fresh wave of redundancies’ in autumn if the scheme ends as planned.

Chief Executive Stephen Phipson said: “The protection of key skills should be a strategic national priority as this will be the first building block in getting the economy up and running.

“Ensuring that those sectors which are at the forefront of technology and will provide the growth sectors and high-skill jobs in recovery should receive the greatest support possible.”

Steve Turner, Assistant General Secretary of trade union Unite, also campaigned for an extension, claiming: “Hundreds of thousands of workers could face a desperate future” unless the government moves “swiftly to modify the Job Retention Scheme.”

Thousands of jobs have already been lost as the UK economy entered a recession earlier this year.

Manchester City Council leader, Sir Richard Leese, has called getting the country back on track the “greatest challenge we have faced in our lifetimes.”

However, the national economy did see some improvement in summer – growing by 6.6% in July.