Extending UK Furlough Would Trap People in False Hope, Finance Minister Says

LONDON—Extending Britains furlough scheme would leave some workers trapped in false hope that they could return to their jobs after the coronavirus pandemic, British finance minister Rishi Sunak said on Friday.

With redundancies mounting, opposition politicians and think tanks have said Sunak should extend the Coronavirus Job Retention Scheme—due to expire at the end of October—until the economy is strong enough to support more at-risk workers.

Sunak has said there is no question of a wholesale extension of the programme and he was backed up by Bank of England Governor Andrew Bailey on Thursday.

“Its wrong to keep people trapped in a situation and pretend that there is always a job that they can go back to,” Sunak told BBC Radio Scotland.

He said the government had taken action to provide people with new opportunities, including apprenticeships and training during what “is unquestionably going to be a difficult time”.

Last week the National Institute of Economic and Social Research, a major think tank, said closing the furlough scheme early would be a “mistake” that would cause surging unemployment.

Extending the scheme would largely pay for itself by averting job cuts, NIESR said.

The BoE said it estimated 7.5 million workers had benefited from the furlough scheme at its peak, and that 4 million had now returned to work, while 3.5 million were still on furlough.

Governor Bailey said on Thursday that some parts of the economy would no longer be viable once the fallout of the pandemic clears—with hospitality and leisure looking especially vulnerable.

Lay-offs Surging

Major British companies have already announced tens of thousands of redundancies.

Bailey said on Thursday that the centraRead More – Source