Reports this morning suggest that the Chancellor Rishi Sunak has begun planning a way to ‘wind down’ the employee support scheme.
The scheme under which the Government pays 80 per cent of furloughed workers wages is costing up to £8 billion pounds a month and there are concerns that employees and employers need to be weaned off the scheme to get the country back to work.
The Chancellor has already commented on the fact that the scheme was becoming unsustainable.
He met officials yesterday to discuss the options, which include cutting the 80 per cent wage subsidy to 60 per cent and lowering the £2,500 cap on monthly payments.
The Treasury is also considering plans to bar self-employed workers with trading profits of more than £30,000 from claiming government grants. At present the threshold is £50,000.
Mr Sunak has reassured workers and businesses that there will be no ‘cliff-edge’ with subsidies immediately withdrawn.
A report in the Times suggests that taxpayer support could be withdrawn from different sectors at different times as the lockdown is slowly eased.
“The first phase will involve small shops reopening alongside outdoor workplaces,” he writes. “The second will involve large shopping centers reopening, with more people encouraged to go into work, while pubs, restaurants, hotels and leisure centers will be among the last to open. They are likely to be able to continue to access the furloughing scheme for a prolonged period.”
Decisions on how the government will proceed are reportedly set to be made at the Treasury this week, before the prime minister announces the government’s plan to ease the UK lockdown on Sunday.
