image PA Media has the copyright to this image. The government has promised to subsidize the pay of employees affected by the coronavirus outbreak for nearly 15 months. Chancellor Rishi Sunak’s “unique” furlough policy has remained in effect since March 20, 2020, despite a lot of changes. However, once the full impact of Covid on the UK economy became obvious, it was extended four times. The policy, which was drafted after extensive consultations with business and labor leaders, first committed the government to paying 80 percent of the salary of employees who were kept on by their employers while unable to work, up to £2,500 per month. The furlough program will now expire on September 30, although there will be some changes as it concludes. Employers will be required to contribute to furlough pay for hours not worked beginning in July, with a 10% contribution in July and increasing to 20% in August and September. As a result, the government’s contribution will be reduced to 70%, then 60%. Approximately 11.5 million employment have been supported at some point over the scheme’s lifespan, with a high take-up in the initial few months. However, this does not imply that the government has ever paid so many people’s wages at one time. What is the current state of furlough? What does Covid cost, and how will we pay for it? The number of jobs furloughed reached at 8.9 million on 8 May last year, according to figures from HM Revenue & Customs (HMRC). It then steadily declined until late last year, when it began to rise again, never reaching the heights of the first shutdown. It has since fallen to over 3.4 million people, although that still accounts for 12% of the UK employment. Those who stayed at work saw their hours shrink dramatically, though there has been a notable recovery since then. The chancellor expressed sympathy to individuals worried about losing their jobs in his March 2020 statement. “I say this to all those at home right now, worried about the days ahead: you will not confront this alone,” he stated. Mr Sunak was relatively new in his role at the time, despite being one of the country’s most well-known leaders and currently enjoying one of the highest net approval ratings in opinion polls. He had pledged a £30 billion package to strengthen the economy and get the country through the Ebola outbreak a week and a half earlier in his maiden Budget. That seemed like a lot at first. However, the chancellor’s Job Retention Scheme, as well as other support measures, would result in a significantly larger bill. The government had only a hazy idea of how huge the scheme would grow when it was first established. According to the National Audit Office, coronavirus has cost the government more than £370 billion so far, with £64 billion spent on the furlough scheme alone. As a result, government borrowing has risen significantly to fund the expense of economic assistance. Both Prime Minister Boris Johnson and Mr Sunak have recently stated that they do not want the furlough to be extended again. Since March 2020, more women have been furloughed than men. Younger people have made up a major share of those on furlough, as they are more likely to work in the areas of the economy hardest harmed by the coronavirus lockdown measures. Clearly, some sectors of the economy took advantage of the furlough program more than others. The hospitality industry witnessed a large number of workers furloughed, with pubs and restaurants being particularly hard hit by coronavirus restrictions. Furthermore, because non-essential stores were closed during the lockdown, businesses placed a large demand on the government’s resources. However, some significant employers in that sector, especially supermarkets, have now reimbursed the money. Furloughs were also more common among people working in the arts, entertainment, and other leisure activities than in other professions. The strategy, however, was designed to keep people tied to occupations that would return once the pandemic had gone, according to analysts. And many jobs in such fields have either not returned or are currently in jeopardy as a result of ongoing coronavirus restrictions. There was a noticeable surge in the number of workers laid off late last year, when it appeared that the furlough program was coming to an end. However, as the economy reopens, the number of layoffs has decreased in recent months. The furlough system has been regarded as “a very successful and well-implemented policy intervention” by the Resolution Foundation, a powerful think tank. The foundation continued, “It has preserved household incomes in the face of unparalleled shock and maintained the important bond between employees and their company.” However, as the project draws to a close, it remains to be seen how history will see it. The Commons Public Accounts Committee has slammed it, demanding that all corporations who gain from the plan be named publicly for the sake of openness. The committee also slammed “hurriedly drafted economic support plans” for allowing “unacceptable potential for fraud against taxpayers.” HMRC, which oversaw the furlough scheme, estimates that up to 10% of the £3.5 billion distributed by the scheme until mid-August 2020 may have been paid out in error or fraud. Aside from that, there’s the question of whether it truly protected viable employment or simply postponed the eventual loss of unviable ones. The chancellor has stated that not all jobs can be spared and has advised those who are affected to retrain, stating that “everyone is having to find methods to adapt and adjust to the new reality.” The number of job openings dropped dramatically during the early phases of the pandemic, but they are now significantly higher than last year. Indeed, many firms are having difficulty recruiting qualified employees, prompting some experts to refer to the UK’s “missing workers.” Finally, the outcome of the furlough system may have to wait until the pandemic has passed, which is unlikely to happen anytime soon with instances on the rise again. Are you nearing the end of your sabbatical? Have your say by sending an email to haveyoursay@bbc.co.uk. If you are willing to speak with a BBC journalist, please include your phone number. You can also contact us using the following methods: +44 7756 165803 (WhatsApp) Have your say on Twitter: @BBC HaveYourSay Please read our terms and conditions as well as our privacy statement. If you can’t see the form on this page, go to the BBC’s mobile website to submit your question or remark, or email us at HaveYourSay@bbc.co.uk. Any entry should include your name, age, and location. Rishi Sunak is an economist in the United Kingdom. Lockdown measures for the Coronavirus Pandemic of Coronavirus Employment/n
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