UK Chancellor Sunak Unveils New COVID Furlough Scheme for Local Lockdowns

Under the chancellor's new measures, staff must be working at least one-third of their regular hours to prove their job is 'viable' in order to qualify for government payments to top up their reduced wages.

British Chancellor of the Exchequer Rishi Sunak has unveiled a new furlough scheme for workers working shorter hours under local COVID-19 lockdowns.

Sunak announced an "expansion" of the Job Support Scheme (JSS), which will replace the national Coronavirus Job Retention Scheme at the end of this month.

"I hope this provides reassurance and a safety net for people and businesses in advance of what may be a difficult winter," he told reporters on Friday.

But he denied the new programme was just a rebranding of the furlough scheme announced this spring, insisting it was "fundamentally wrong" keep workers in jobs that only now existed thanks to the government payments. 

"This is a very different scheme to what we've had before," The chancellor insisted "This is not a universal approach, this is an expansion of the Jobs Support Scheme specifically for those people who are in businesses that will be formally or legally asked to close."

A treasury source told the Daily Mail it was hard to predict how much the new programme would cost, but "under most scenarios we're looking at hundreds of millions a month."

The JSS will see the government and employers each pay for one third of wages lost by staff who have their hours cut under the new 'three-tier' system of area-by area restrictions - set to be announced by Prime Minister Boris Johnson on Monday.

To qualify, staff must still be working a third of their normal hours to prove that their job is still "viable". A worker doing one third of their hours will get 77 per cent of their pre-lockdown wages until the restrictions are lifted - and less if their monthly salary is more than the £2,100 cap set by the Treasury. 

Those in the low-paying hospitality sector - including pubs, cafes and restaurants - is expected to be especially hard-hit. On Thursday Scottish First Minister Nicola Sturgeon ordered a two-week ban on serving alcohol in indoor settings and a total closure of pubs and bars in coronavirus hotspots.

Labour's Shadow Chancellor Anneliese Dodds said the Conservative government was "forcing businesses to flip a coin over who stays and who goes," arguing it would be cheaper to employ one staff member full-time than two-part time.  

​She accused Sunak of pulling the rug from under millions of staff in a tweet on Friday

— Anneliese Dodds (@AnnelieseDodds) October 9, 2020

Earlier, Labour mayor of Greater Manchester Andy Burnham blamed the government's closure of the existing furlough plan for the loss of 465 jobs at Manchester Airport in an angry tweet.

— Andy Burnham (@AndyBurnhamGM) October 9, 2020

Hospital admissions with COVID-19 hit 609 on Thursday, with the north of England seeing a particular surge in cases.