Chancellor Rishi Sunak is drawing up plans for a new wage subsidy programme to replace the Jobs Retention Scheme next month, the Financial Times reports.

With the onset of tighter restrictions, calls for continued furlough support has increased in the past few weeks, and Sunak is said to be considering a scheme whereby the Treasury and companies could share the cost of topping up part-time wages.

According to the FT, a range of support measures are on the table, and although no decisions have been taken the Treasury is said to be looking at schemes in France, Germany and Spain that help businesses unable to bring back employees on a full time basis because of the ongoing crisis.

Sunak met Trades Union Congress leaders and the CBI employers’ group last week, who have outlined a new scheme, to be put in place on 1 November, that would involve a state subsidy if an employer was able to offer workers at least 50% of their normal hours.

The company would pay the wages for hours worked, whilst the burden for non-working hours would be shared in thirds – split between the company, the Treasury, and the employee.

Having made clear that he believes the furlough scheme is keeping people in “suspended animation,” Sunak recently rejected Labour’s calls for a new sector-specific furlough for the parts of the economy most affected by ongoing restrictions.

The Financial Times estimated that if 3m people joined a CBI-style work subsidy scheme it could cost the Treasury about £500m each month.

Topics