Furlough scheme could be 'cut to 60% of workers' salary' from July

There are concerns over the cost of the programme, with latest Government figures showing 6.3 million people are having up to 80 per cent of their salaries paid by the Treasury at a price of £8 billion.

The Times reported that Mr Sunak will announce plans next week to wind down the scheme from July, with options including cutting the subsidy level to 60 per cent and lowering the £2,500 cap on monthly payments.

But Treasury sources insisted ‘no decisions have yet been taken’ over the scheme which was introduced to prevent firms from laying off thousands of workers during the lockdown.

Health Secretary Matt Hancock had said the Government must ‘wean’ businesses off the scheme ‘as the economy gets back on its feet’.

A senior Government source told the Times that ‘people are addicted to the scheme’, adding: ‘We're not talking about a cliff-edge but we have to get people back to work.’

Angela Rayner, Labour's deputy leader, criticised Mr Hancock and the source for using ‘dreadful terms’ against ‘workers who through no fault of their own have been told to stay away from work’ during the pandemic.

Labour leader Sir Keir Starmer is calling for the Government to set out the next steps for the scheme, which it described as ‘a lifeline’.

‘It's important that that scheme is in place. The Government does need to provide clarity about the future status of that scheme,’ Sir Keir's spokesman said.

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‘What we've said is that the Government should allow for greater flexibility for businesses with some staff able to semi-furlough to ensure that they do not face a cliff-edge when the scheme comes to an end.’

Mr Sunak has acknowledged the current level of expenditure is not ‘sustainable’ in the long term but promised there will be no ‘cliff-edge’ cut-off.

Speaking to ITV News, he said ministers were investigating ways to wind down the scheme, due to run to the end of June, in a ‘measured way’.

The Liberal Democrats have called for a ‘tapered’ end to the programme, with the Treasury paying 50 per cent of salaries for the first month after people return to work, falling to 30 per cent after the third month, with employers picking up the full bill after the fourth.

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