Chancellor Rishi Sunak has promised there will not be a “cliff-edge” end to the Government’s furlough scheme.
Speaking to ITV News, Sunak attempted to reassure a number of business groups who warned of the potential of mass redundancies if the scheme was to suddenly end and not be extended in some way past June.
Sunak said: “To anyone anxious about this I want to reassure them that there will be no cliff-edge to the furlough scheme.”
Currently there are around 6.3 million people who have been placed on the scheme, which sees the government pay 80% of employees wages up to £2500 a month, with the figure closing in on the 8.3 million that was predicted by the Office for Budget Responsibly. If that figure is to be reached it would cost the government around £42bn over three months.
As such the chancellor added that he is looking to “wind down” the scheme stating that the current situation is “not sustainable”.
The news comes after thousands of small firms and sole traders became eligible for a new 100% government-backed ‘Bounce Back Loans’ to help them make it through the coronavirus outbreak.
From yesterday (4 May), small business owners can apply to accredited lenders by filling out a simple online form, with only seven questions.
The government has also agreed with lenders that an affordable flat rate of 2.5% interest will be charged on these loans. And any business that has already taken out a Coronavirus Business Interruption Loan of £50,000 or less can apply to have these switched over to this generous new scheme.