Furloughed workers set to be allowed back part-time

Furloughed staff who go back to work part-time may have their wages subsidised by the taxpayer as ministers battle to prevent as many as 1.2m redundancies when the economy reopens.

Chancellor Rishi Sunak is under pressure to set out plans to extend the taxpayer-backed furlough scheme and make it more flexible amid bleak forecasts suggesting that many workers hoping to head back in will be laid off due to the economic downturn.

He is on Tuesday expected to confirm that the furlough programme will be extended beyond its current July cut-off date until September, but with a lower level of support. It is expected that taxpayers will in future cover 60pc of wages for staff who have temporarily been laid off rather than the current 80pc.

Backing is also being examined for previously full-time workers who are returning for just a few days a week, with the state picking up the tab for days when they are not in. The plans were still being finalised on Monday night.

Caroline Fairbairn, director general of the Confederation of British Industry, said businesses are lobbying hard for changes to limit unemployment.

She said: “We would like to see it extended through the end of September, we have made that very clear. Particularly as we are seeing the very cautious approach to re-opening the economy, the last thing we want is unnecessary redundancies.”

Firms such as retailers are unlikely to need all of their staff when they first reopen, because social distancing rules mean shops have to be less crowded. A part-time furloughing scheme could allow companies to bring back more staff on a rota and prevent steep cuts.

Ms Fairbairn said: “That will encourage opening. The idea of a furlough scheme that runs alongside partial opening is a very powerful one.”

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