Employers will contribute 10% towards furlough scheme from September

There will be ‘careful but deliberate steps to reopen our economy over the coming weeks’ announced the chancellor at today’s Coronavirus press briefing.

As Britain returns to work, he explained that the emergency programmes put in place to ‘bridge through the crisis’ would need to adapt. The job retention scheme has now supported more than a million jobs and over a million businesses.

The chancellor said: “Becaiuse of those programmes our economic prospects are better than they would have been and we have provided tens of billions of pounds of tax cuts, tax deferrals, cash grants and discounted loans for businesses.

“No British government ever done anything like this.”

He added: “As we reopen the economy the furlough scheme cannot continue indefinitely.

“I believe it is fair to ask employers to contribute alongside the taxpayer to the wage of their staff, I understand too that businesses and employers have been through an incredibly difficult time.”

Employers will be asked to pay a ‘modest’ contribution introduced slowly over the coming months. In August the taxpayers contribution will stay at 80% and employers will only be asked to pay national insurance and employer pension contributions – just 5% of average employment costs. From September they will be asked to pay 10% towards wages and in October they will contribute 20%.

The furlough job retention scheme will close at the end of October. The chancellor explained the government will be Introducing a new more flexible furlough from July 1, ‘a critical part of our plan to kickstart the economy’.

He said: “The financial security of the furlough scheme has been a relief for many but at the same time people want to work.”

The new scheme allows employers the flexibility to decide how quickly they return staff to work, if they bring back someone for two days for example they will be paid as normal for those days and the furlough scheme will make up the other three days. The old scheme will be closed to new entrants on June 30.

The self-employment income scheme will also be extended. The next round will be open for applicants in August providing a three month payment at the reduced level of 70% in line with the changes to the Job Retention Scheme.

He added: “Not everything will look the same as before – we will develop new measures to grow the economy, to back business, to boost skills and to help people thrive in the new post covid world.”