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Boris Johnson Doubles Down on Ending U.K. Furlough in October

Boris Johnson Doubles Down on Ending U.K. Furlough in October

Boris Johnson doubled down on ending the U.K.’s furlough program at the end of October, saying keeping it running isn’t the answer to revitalizing the economy.

The program, which has supported more than 9 million jobs through the coronavirus pandemic and lockdown, is due to end on Oct. 31, prompting warnings from economists of a wave of unemployment as businesses remain shuttered or are forced to cut staff.

Asked repeatedly in Parliament on Wednesday about extending the program, Johnson pushed back, saying he won’t keep people in “suspended animation.”

“Indefinite furlough is just not the answer,” Johnson said at the first weekly session of prime minister’s questions since Parliament returned from summer recess. “There will always be those who argue for an infinite extension of the furlough scheme and who want to keep people off work, unemployed, being paid very substantial sums for a very long time. I don’t think that’s the right thing.”

Instead, Johnson said the “best way forward” is to get people back into work and referred to the government’s 2 billion-pound ($2.7 billion) program to fund to fund 6-month work placements for young people, which was announced in July and started on Wednesday.

‘Languishing’

“How much better is that than languishing out of work?” Johnson asked.

The furlough program has paid as much as 80% of the wages for more than 9 million jobs, at a cost to the taxpayer of 35 billion pounds through mid-August. But as of Tuesday, employers began paying 10% of wages for furloughed employees, a level which rises to 20% on Oct. 1. The government support ends on Oct. 31.

The National Institute of Economic and Social Research predicted in July that the “premature” end of the plan would push unemployment above 3 million before the end of 2020, up from about 1.3 million.

©2020 Bloomberg L.P.