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Business

PM refuses to be drawn on furlough extension

Prime Minister Boris Johnson has pledged to continue supporting businesses and workers during the ongoing novel coronavirus (Covid-19) crisis, but refused to commit to extending the government’s Coronavirus Job Retention Scheme.

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The current furlough scheme is due to end on October 31st, with no sign of an extension

Launched in March, the scheme has seen the government pay most of furloughed staff’s wages, with the aim of keeping as many people in work as possible amid the Covid-19 pandemic.

However, the scheme began to wind down in August, with employers having to pay national insurance and pension contributions, while September saw firms also began to pay 10% of furloughed staff’s wages.

The scheme is currently set to end on October 31st – with companies paying 20% of wages during the month – but several organisations have called for it to be extended, including the CBI and the Governor of the Bank of England.

When drawn on the issue during Prime Minister’s Questions, Johnson would not commit to extending the scheme, despite 24 hours earlier announcing a number of new measures following an increase in Covid-19 cases across the UK.

Labour party leader Sir Keir Starmer asked when the Prime Minster when he is going to act to help save jobs and businesses, and though Johnson said that he understand it is “tough times” and the government will do its “best to protect them”, would not commit to an extension.

Johnson also faced criticism from SNP Westminster leader Ian Blackford, who warned around one million jobs could go if the furlough scheme were to finish next month

Johnson also faced criticism from SNP Westminster leader Ian Blackford, who warned around one million jobs could go if the furlough scheme were to finish next month.

The Prime Minister responded by saying the government “will come up with the appropriate and imaginative schemes to keep the economy moving” in due course.

However, despite Johnson’s refusal to commit to an extension, new reports have emerged that suggest Chancellor Rishi Sunak is considering an alternative to the furlough scheme to help protect people when the original initiative ends in October.

Though the Treasury is yet to comment on the plans, the BBC reported that the new scheme could see companies allowed to reduce employees’ hours while keeping them in a job, with the government to pay part of lost wages.

Similar schemes are running in France and Germany, with both countries having established such support initiatives before the Covid-19 pandemic began.

The Chancellor has since posted on Twitter to say he will update the House on the government's plans on Thursday.

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