Rishi Sunak is considering whether to replace the furlough scheme in Britain with a wage subsidies programme, according to The Guardian.
The government’s job retention scheme is set to end in October, leaving the 9.6 million who have depended on the programme at risk of “mass unemployment.”
However, new reports have suggested that the Chancellor is looking to fill the furlough void with a wage subsidy programme instead; whereby the Treasury and companies share the cost of topping up staff wages.
The imminent conclusion of the furlough scheme had set alarm bells ringing even before COVID cases had begun to climb.
On Tuesday, Prime Minister Boris Johnson warned that the UK had reached a “perilous turning point” in the fight against the virus, before laying out a raft of new restrictions and regulations designed to flatten the second curve.
The hospitality sector, once again, has been hit hard by tightened rules – with bars, cafes, restaurants and pubs now required to shut no later than 10pm (with table service only).
According to the Financial Times, a variety of new support measures for staff could be on the table.
However, it is believed the Chancellor is favouring a German-style ‘short work’ system.
This would see employers pay staff when they’re on shift, whilst the Treasury would bump up wages during periods of no work.
An announcement on the scheme is expected within a week.
The governor of the Bank of England has admitted it might be time for a “rethink” as the furlough end date fast approaches.
Currently, the job retention programme wraps up on 31 October.
With a “tough winter” ahead, surely some other support scheme will need to take its place.