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The scheme, under which the government pays furloughed workers 80% of their salary up to £2,500 per month, was extended until the end of October by chancellor Rishi Sunak today (12 May). The government will continue to pay the 80% until July, but employers will be expected to share the cost after that. Companies will also be able to bring furloughed workers back on a part-time basis from August.
“I applaud this announcement, which avoids a looming cliff edge triggering significant redundancies for many companies and recognises the need for greater flexibility as the economy fires up,” said Make UK chief executive Stephen Phipson.
“Government has been very supportive of business since the start of the crisis and it's encouraging that it stands ready to stand behind industry to protect jobs and key skills over the summer and autumn. Along with other business groups, we have called for these enhancements to the scheme and are very pleased the chancellor has responded so positively.”
The organisation, which represents UK manufacturers, previously said manufacturing is forecast to contract by 2.1% in 2020. Exports were already hit by Brexit uncertainty before the Covid-19 pandemic took hold, and companies expect volatility for months to come.
Phipson added: “There is no silver bullet to any of this and both government and industry are going to have to be adaptive, creative and flexible through what is likely to be a bumpy and turbulent flight into the future from now on. This is going to require a range of policies, starting with today's extension of the Job Retention Scheme, followed by a three-stage plan to get the economy up to full speed by later in the year.
“We will continue to work in partnership with the chancellor as we navigate these unprecedented challenges.”
The job retention scheme has paid 7.5m workers, the government said.
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