‘Deadline’ looms for jobs protected by furlough

Jobs could be cut if the government pay scheme for workers is not extended this weekend, a business group has warned.

More than nine million workers are expected to be furloughed, or put on state-paid leave, under the government’s job retention scheme.

But the Confederation of British Industry says that if support is not extended beyond May, notice of redundancies could start now.

It says the Treasury has until Saturday to let employers know its plans.

How the scheme works

Under the Coronavirus Job Retention Scheme, the government will cover 80% of workers’ wages for March, April and May if they are put on leave.

Employers will pay workers and reclaim the money from HM Revenue and Customs (HMRC) at the end of April. They can apply to join the scheme from Monday.

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Figures from the British Chambers of Commerce (BCC) suggest nearly a fifth of smaller firms and half of companies will access the help.

But the CBI has repeatedly warned that many firms could start to cut staff unless the government clarifies whether the scheme will be extended beyond the end of May.

This is because they would have to start redundancy procedures next week to comply with the minimum 45-day consultation period.

However, these consultations could be halted if the Treasury promised to extend the support.

“This is quite urgent,” CBI director general Carolyn Fairbairn told BBC Breakfast.

She said the government scheme offered “fantastic support” and “was one of the best in the world”. But she said there was a real risk that some could “unnecessarily” lose their jobs if it wasn’t extended beyond three months.

The Treasury has previously suggested it is open to an extension, but is yet to confirm its plans.

It is currently expected to spend £30bn-£40bn on the job retention scheme.

On Wednesday a Treasury spokesman said: “The scheme is open for an initial three months and we hope conditions will improve sufficiently during this period. However, the chancellor has been clear he will review extending it for longer if necessary.”