Chancellor: No 'cliff-edge' to the furlough scheme

Chancellor Rishi Sunak has said that there will be no "cliff-edge" to the furlough scheme and that he is exploring the most effective way to wind it down.

Speaking on ITV's News at Ten on Monday night, the chancellor said: "To anyone who is anxious about this I want to give them reassurance today that there will be no cliff-edge to the furlough scheme."

However he said the scheme was established as a temporary solution and that the government was making plans to wind it up: "I am working as we speak to figure out the most effective way to wind down the scheme and ease people back into work in a measured way."

"We are potentially spending as much on the furlough scheme as we do on the NHS – clearly that is not a sustainable situation, which is why as soon as the time is right we want to get people back to work again and get our economy fired up again."

He said the furlough scheme was to provide "that bridge, that lifeline, to get through this temporary period and we can bounce back to normal thereafter."

The chancellor said he believed the furlough scheme was working and that it was "critical" to provide that support through a "temporary disruption to our economy". He stressed it was a severe situation and recognised that "lots of jobs are at risk, lots of businesses are suffering".

More than six million people who may otherwise have lost their jobs have been furloughed under the Coronavirus Job Retention Scheme (CJRS). The scheme, which pays 80% of an employee's wages, went live two weeks ago and is due to finish at the end of June.

On Monday the chancellor launched "quick and easy-to-access" Bounce Back Loans of up to £50,000 for small businesses, saying that SMEs were "the lifeline of our economy". By lunchtime there had already been "tens of thousands of applications" and the chancellor said some businesses will have money in their accounts from as early as Tuesday.