Almost a quarter of all British employees have been ‘furloughed’ in two weeks, meaning over half of the British adult population is now being paid by the government, possibly the highest proportion ever.
The UK government announced the coronavirus job retention scheme, a state-funded programme where businesses slowing or suspending operations during the national lockdown could avoid firing their staff, in March. Rather than employees being laid off and shuffled onto the government’s unemployed claimant count, the government would instead pay employers to keep paying wages even though the furloughed staff were not doing any actual work.
Uptake of the programme was enormous, and perhaps greater than expected, with 800,000 employers nationwide signing up to the scheme, placing 6.3 million people onto the government payroll at a cost of around £8 billion, the Treasury said. The bill for keeping essentially unemployed people in their jobs was so large, it is now costing the British taxpayer the same amount that it spends on the NHS, the chancellor revealed.
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