10:17 GMT24 January 2021
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    The furlough scheme, which began in March, costs British taxpayers about £14 billion per month, and is being used by about one million companies. Chancellor Rishi Sunak announced at the end of May the Treasury would slowly taper the scheme.

    The outlook for UK jobs is at its gloomiest in almost three decades, according to a survey published by recruitment firm ManpowerGroup.

    The organisation found companies in all major sectors are more likely to cut jobs than to hire people July - September, the weakest forecast since records began in 1992. The survey comes as companies prepare to start amending, or indeed significantly winding down, their involvement with the government’s furlough scheme, which covers pays 80 percent of almost nine million workers’ wages.

    Businesses may well announce significant redundancies in coming weeks, as the state gradually reduces support available through the scheme. Firms have to decide whether they can afford to keep staff on furlough when they begin contributing towards the cost of the government scheme, or choose to make workers redundant.

    ​Businesses will initially have to pay employer national insurance and pension contributions for workers kept on furlough, equal to about five percent of gross employment costs before the scheme started.

    However, from October the government will be paying only 60 percent of wages, up to a cap of £1,875, while employers will have to contribute 20 percent plus national insurance and pension contributions – equal to about 23 percent of gross employment costs pre-furlough.

    If firms don’t believe they’ll have the income to begin paying towards the scheme from August, as well as covering holiday pay, they may be compelled to make workers redundant.

    A number of other changes will also impact employers’ decisions - furloughed staff can be brought back to work part-time from 1st July, with employers paying wages in proportion to hours worked, but only staff who have been furloughed for three weeks before 30th June can join the scheme, so companies must decide by 10th June. In addition, from 1st July companies aren’t allowed to have more employees on furlough than they had earlier in the year.


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    taxpayers, COVID-19, unemployment, UK economy, United Kingdom
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