A fifth of Britain’s workforce has gone on furlough – at a staggering cost of £8billion.
Downing Street yesterday revealed that the Government is now paying the wages of 6.3million workers under the scheme. Employers impacted by the coronavirus are entitled to claim taxpayer money to pay 80 per cent of each staff member’s wages – capped at £2,500 a month.
The scheme is designed to save companies from having to lay off staff permanently as business grinds to a halt because of the pandemic.
High streets around the country, including Worcester’s, remain empty as closed shops leave millions either furloughed or out of work
Work and Pensions Secretary Therese Coffey, pictured in Downing Street in March, said the number of Universal Credit claims between March 16 and April 30 was six times higher than normal
The Prime Minister’s official spokesman said: ‘Since the launch [on April 20], 800,000 employers have used the job retention scheme to furlough 6.3million jobs. That’s a total value of £8billion.’
The scheme was originally set to cover the wages of staff laid-off temporarily until the end of May but was later extended by a month.
Meanwhile, it was revealed that more than 1.8million claims for Universal Credit have been received.
Work and Pensions Secretary Therese Coffey said: ‘Since March 16 to the end of April we have received over 1.8million claims for Universal Credit, over 250,000 claims for Jobseeker’s Allowance and over 20,000 claims for Employment And Support Allowance.
Overall, this is six times the volume that we would typically experience and in one week we had a tenfold increase.
The rate for UC claims appears to have stabilised at about 20,000 to 25,000 per day, which is double that of a standard week pre-Covid-19.’
The minister said her department had issued almost 700,000 advances to claimants who felt that they could not wait for their routine payment.
She said the vast majority of these received money within 72 hours. Benefit and UC claimants were told in March they will not face sanctions for three months if they fail to look for work because of the crisis.
Chancellor Rishi Sunak promised there will be no ‘cliff edge’ cut-off to the scheme, but he acknowledged such a level of expenditure was not ‘sustainable’ in the longer term
But Miss Coffey yesterday urged them to ‘continue to look for work wherever they are able to do so’.
A new website had been set up to advertise job opportunities – jobhelp.dwp.gov.uk.
It currently has 58,200 vacancies. The astonishing cost of the furlough scheme and the extra UC claims show just how far the economy has been pummelled by the coronavirus crisis.
Tough social distancing rules have meant most shops have been forced to close, along with pubs and restaurants.
Many other businesses have been affected, forcing employers to apply for Government bailouts to prevent making workers redundant.
Last night Chancellor Rishi Sunak promised there will be no ‘cliff edge’ cut-off to the scheme, but he acknowledged such a level of expenditure was not ‘sustainable’ in the longer term.
Mr Sunak told ITV News ministers were looking at ways to wind down the scheme – which is due to run to the end of June – and ease people back into work in a ‘measured way’.
He stressed: ‘To anyone anxious about this, I want to reassure them that there will be no cliff edge to the furlough scheme.
I’m working as we speak to figure out the most effective way to wind down the scheme and ease people back into work in a measured way.
As some scenarios have suggested, we are potentially spending as much on the furlough scheme as we do on the NHS, for example.
‘Clearly, that is not a sustainable situation which is why, as soon as the time is right, we want to get people back to work and the economy fired up again.’
The vast cost of the scheme raises the prospect of higher taxes after the crisis. Labour has warned the richest will have to face most of the burden.
Lord Lamont, pictured in January 2019, has said it is ‘not practical and not affordable for the state to pay people not work’
Pressure is growing on the Government to find a way out of lockdown, after analysis in The Daily Telegraph claimed around 27million are being funded by the Government.
The figure is made up of furloughed workers, people claiming benefits, pensioners and public sector workers.
Former Tory chancellor Lord Lamont of Lerwick told The Daily Telegraph: ‘It is not practical and not affordable for the state to pay people not to work – ultimately the Government only has the money it gets from taxation from people who create the wealth.
‘It is not a sustainable position except in the short term. It illustrates the danger and precariousness of our situation.’