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Politics Explained

How is the furlough scheme being withdrawn – and what are the risks?

There are warnings of mass redundancies as support for employment is phased out over the coming months, writes Andrew Woodcock

Saturday 01 August 2020 17:48 BST
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Sunak’s measures have helped 9.5 million workers
Sunak’s measures have helped 9.5 million workers

Businesses are now having to contribute towards the cost of keeping inactive workers in jobs during the coronavirus crisis, as chancellor Rishi Sunak’s furlough scheme begins a gradual rollback leading to its closure at the start of November.

The change has sparked warnings of waves of redundancies as employers are faced with growing costs to retain staff who cannot work as normal because of social-distancing rules.

Ministers say Mr Sunak’s job retention scheme provided an income for millions of workers – and maintained their links with employers – during the worst months of the first Covid-19 wave. But Labour says his “one size fits all” approach to winding it down risks mass job losses, which could be avoided if it was extended for the worst-hit sectors.

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