The Chancellor, Rishi Sunak, has just announced that the furlough scheme will be extended from the end of June until the end of October.

Until the end of July there will be no changes, but there will be "greater flexibility" from then until the end of October. This will include allowing employers to bring back staff part time, possibly on a rota.

With 7.5 million workers now covered by the scheme, the Chancellor needs to balance the enormous costs of paying their wages against the need to prevent thousands of redundancies. It had been rumoured that the amount paid under the scheme would be reduced from 80% to 60% of earnings but that doesn’t appear to be the case, at least not yet.

It makes sense to extend the scheme. Even if sectors such as the hospitality industry are able to resume business in July, it will be at a much lower level due to the need to maintain social distancing measures.  Shops and restaurants won’t need their full quota of staff for some months, so redundancies will remain a risk.  Part time working will allow a gradual return to work.

 We are expecting more detail on this shortly