Coronavirus: Chancellor expected to extend furlough scheme to September, but cut it to 60% of earnings

The chancellor is expected to extend the government’s furlough scheme – currently paying 6.5 million laid off workers 80% of their earnings – from June to September.

But Rishi Sunak is expected to cut the payments to 60% of earnings, although he will pledge to continue to top up the wage packets of laid off staff if they return to work part time.

The move, which the Chancellor insists will avoid the “cliff-edge” cut-off of the scheme feared by Tory MPs and business leaders, is aimed at preventing an estimated 1.2 million redundancies.

The Treasury believes firms such as retailers are unlikely to need all of their staff when they first reopen, because social distancing rules mean shops will have to be less crowded.

A part-time furloughing scheme, therefore, could allow companies to bring back more staff on a rota and prevent steep cuts, ministers believe.

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