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Coronavirus: Millions of furloughed workers set for extra month's pay

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·Finance and policy reporter
·2-min read
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Chancellor of the Exchequer Rishi Sunak clapping outside the Foreign and Commonwealth Office in London to salute local heroes during Thursday's nationwide Clap for Carers initiative to recognise and support NHS workers and carers fighting the coronavirus pandemic.
Chancellor of the Exchequer Rishi Sunak. (PA)

The UK government has extended its job protection scheme for another month, giving furloughed workers another month’s pay during the coronavirus outbreak.

The Treasury announced on Friday 17 April workers put on the scheme by struggling employers during the pandemic can be kept on with state-funded leave pay until at least the end of June.

The coronavirus job retention scheme (CJRS) had previously only covered wages for staff at risk of redundancy until the end of May.

A survey published last week showed more than one in three UK firms plan to furlough at least three-quarters of their staff. As many as 11 million workers could eventually be furloughed, according to one analysis.

READ MORE: UK braces for economic hit as coronavirus lockdown extended by three weeks

The survey suggests take-up for the government’s job retention scheme could be higher than expected by officials, costing between £30bn and £40bn ($49.3bn).

The data is based on a business poll by the British Chambers of Commerce (BCC), with analysis by the Resolution Foundation think tank.

Chancellor Rishi Sunak announced the “unprecedented” subsidies to workers’ wages last month.

Employers can seek refunds for 80% of pay, up to a £2,500-a-month cap, for workers who would otherwise be laid off. They cannot work while receiving the payments, but remain employed.

The government hopes to prevent job losses on the scale of the global financial crisis and ensure a faster recovery. Unions, firms and economists have welcomed the scheme.

READ MORE: Firms stop hiring at fastest pace since financial crisis in 2009

Sunak said in a Treasury press release: “With the extension of the coronavirus lockdown measures yesterday, it is the right decision to extend the furlough scheme for a month to the end of June to provide clarity.”

It is not clear what will happen to workers after June, with fears firms will have to make large-scale redundancies if it is not extended further if the lockdown continues.

The Treasury said the scheme may be extended further if necessary. “Future decisions on the scheme will take into account further developments on the wider measures to reduce the spread of coronavirus, as well as the responsible management of the public finances,” added the press release.

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