UK considers wage cut for furloughed workers: report

Post by **TrueBlueTerrier** » 06 May 2020, 07:09

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More than six million furloughed workers could face a drop to 60 per cent of their wages under-reported plans.

The British government's scheme to pay a big chunk of furloughed employees' wages has been a lifeline to many workers and businesses alike. But they could be left facing an additional shortfall under plans reportedly under consideration.

Around a quarter of the United Kingdom's private sector workforce, some 6.3 million people, are currently having 80 percent of their wages paid by the government, at a cost to the public purse - so far - of around eight billion pounds ($10bn), tax officials said on Monday.

But the scheme has already been extended once, and is due to be winding down at the end of June, leaving finance ministry officials working out how to avoid a "cliff edge" for workers.

About a quarter of the United Kingdom's private sector workers are currently being paid 80 percent of their wages to stay at home [Toby Melville/Reuters]

The British government's scheme to pay a big chunk of furloughed employees' wages has been a lifeline to many workers and businesses alike. But they could be left facing an additional shortfall under plans reportedly under consideration.

Around a quarter of the United Kingdom's private sector workforce, some 6.3 million people, are currently having 80 percent of their wages paid by the government, at a cost to the public purse - so far - of around eight billion pounds ($10bn), tax officials said on Monday.

But the scheme has already been extended once, and is due to be winding down at the end of June, leaving finance ministry officials working out how to avoid a "cliff edge" for workers.

One option being considered is for the government to cut the proportion of workers' wages it pays to 60 percent, London's Evening Standard newspaper - edited by former Conservative UK finance minister George Osborne - reported on Tuesday.

But the report faced an immediate backlash.

"Reducing the 80 percent guarantee is the wrong move, for the wrong reasons, at the wrong time," Alfie Stirling, head of economics at the New Economics Foundation, told Al Jazeera.

"With the overall cost of debt at record lows, there is currently no need for the government to be finding ways to cut back. Even if the government did need to save money, it would be far fairer, and better for the economy, to reduce the 2,500-pound ($3,100) per month cap on income protection schemes, which disproportionately benefits the richest 15 percent of taxpayers.

"But the truth is that now is the wrong time for government to be pulling back at all. As the economy begins to be taken out of hibernation, we need more pounds in people's pockets, not less, to ensure that the recovery is as full and as wide-ranging as possible."

The UK government's treasury department had not responded to a request for comment by the time of publication.

Borrowing free money
Meanwhile, the UK borrowed 3.25 billion pounds ($4.05bn) on Tuesday at a rate that was practically free money, according to analysts.

The UK sold a tranche of five-year government bonds at a record-low yield of less than 0.02 percent on Tuesday - raising the prospect that markets could soon pay the government to borrow money.

Unlike in Japan, Germany and some other parts of Europe, British government bond yields have never traded for a prolonged period with a yield below zero.

But in March, the Bank of England cut its main interest rate to a record low 0.1 percent, and announced a record 200 billion pounds ($248bn) in extra bond purchases that have kept a firm lid on bond yields and government borrowing costs.

Since then, the UK has massively stepped up its borrowing plans to fund government efforts to lessen the impact of the coronavirus, but its cost of borrowing has fallen, not risen.

Post by **britwrit** » 06 May 2020, 18:05

That's interesting. The US version of this - paid on top of existing unemployment benefits - ends on 31 July.

hero22 · Post by **hero22** » 06 May 2020, 22:33

Its a joke really. People are getting 80% to stay home so no travel costs, lunch costs and the mortgage holidays etc. Rest of us are busting are balls and paying the extra tax, travel costs etc and being exposed to the virus. I'm glad of the furlough as my missus is on it and its a one less thing to worry about if she is isn't going out in the morning but it should never have been as high as that. Maybe if it hadn't been the amount of parcels coming through Wouldn't be as crazy.

Jpro747 · Post by **Jpro747** » 06 May 2020, 22:51

All this furlough pay (up to £2500/month which is a f**king farce), is just getting spent on all this s**t we’re delivering.

Post by **aiden01** » 06 May 2020, 23:04

hero22 wrote:Its a joke really. People are getting 80% to stay home so no travel costs, lunch costs and the mortgage holidays etc. Rest of us are busting are balls and paying the extra tax, travel costs etc and being exposed to the virus. I'm glad of the furlough as my missus is on it and its a one less thing to worry about if she is isn't going out in the morning but it should never have been as high as that. Maybe if it hadn't been the amount of parcels coming through Wouldn't be as crazy.

Surely you cant say its a joke then say your glad of it cause your missus is on it.

Post by **aiden01** » 06 May 2020, 23:06

Jpro747 wrote:All this furlough pay (up to £2500/month which is a f**king farce), is just getting spent on all this s**t we’re delivering.

Labour wanted it to be 90%.

Post by **aiden01** » 06 May 2020, 23:13

hero22 wrote:Its a joke really. People are getting 80% to stay home so no travel costs, lunch costs and the mortgage holidays etc. Rest of us are busting are balls and paying the extra tax, travel costs etc and being exposed to the virus. I'm glad of the furlough as my missus is on it and its a one less thing to worry about if she is isn't going out in the morning but it should never have been as high as that. Maybe if it hadn't been the amount of parcels coming through Wouldn't be as crazy.

And in another thread your saying you cant wait for furlough to end what if your missus has no job to go back to.

LouBarlow · Post by **LouBarlow** » 07 May 2020, 05:09

Yeah I'd rather people be paid to stay at home and not starve to death thanks. Also we should be pleased that people are buying as much as they can as it stimulates the economy, which will ultimately make our jobs more secure. If people aren't buying, we ain't delivering.

Instead of being envious of people sat at home, be thankful you have a job that looks about as secure as any right now.

Woody Guthrie · Post by **Woody Guthrie** » 07 May 2020, 06:40

The reason for furlough was to try to avoid complete breakdown in the benefits system as a couple of million people tried to make a claim at once.

It was also designed to stop employers using the pandemic as an excuse to close down businesses, sack their staff and then after the lockdown re-employing on even poorer terms and conditions.

I can't believe that any half decent human being especially trade union members would have a problem with keeping people in a job and protecting their terms and conditions.

Tman · Post by **Tman** » 07 May 2020, 08:20

Union members or not, it seems like the good old "he's getting more than me" attitude is alive and kicking, even in a situation as serious as we currently have.

TheStrangler · Post by **TheStrangler** » 07 May 2020, 10:47

Do Royal mail pay the other 20% or do people just get the 80% from the government and that's it?

hero22 · Post by **hero22** » 07 May 2020, 23:20

aiden01 wrote:
hero22 wrote:Its a joke really. People are getting 80% to stay home so no travel costs, lunch costs and the mortgage holidays etc. Rest of us are busting are balls and paying the extra tax, travel costs etc and being exposed to the virus. I'm glad of the furlough as my missus is on it and its a one less thing to worry about if she is isn't going out in the morning but it should never have been as high as that. Maybe if it hadn't been the amount of parcels coming through Wouldn't be as crazy.

I'm glad your taking a keen interest in my posts. If you take an even keener interest in the above one, my issue with the furlough is that it was set too high, maybe if it had been 60% people may not have been as keen to purchase everything that amazon has for sale. Am I glad of furlough for personal peace of mind yep, do I agree with its current format nope. Am I hypocrite most definitely.

hero22 · Post by **hero22** » 07 May 2020, 23:29

Woody Guthrie wrote:The reason for furlough was to try to avoid complete breakdown in the benefits system as a couple of million people tried to make a claim at once.

It was also designed to stop employers using the pandemic as an excuse to close down businesses, sack their staff and then after the lockdown re-employing on even poorer terms and conditions.

I can't believe that any half decent human being especially trade union members would have a problem with keeping people in a job and protecting their terms and conditions.

These people being kept in a job are the same people that are showing us feck all respect by continuing to purchase incredible amounts of junk online. Two crates of iron bru I delivered today simply because the chap didn't fancy going to Tesco to get it himself. Does it matter about our health, not a chance. I'm all for protecting jobs but maybe a little bit of respect towards the essential items policy when buying online would be appreciated.

Woody Guthrie · Post by **Woody Guthrie** » 08 May 2020, 00:41

These people being kept in a job are the same people that are showing us feck all respect by continuing to purchase incredible amounts of junk online.

They are showing me the best kind of respect, they are helping to keep me in a job.

It beats the s**t out of hand clapping and rainbows.

Post by **aiden01** » 08 May 2020, 08:11

hero22 wrote:
aiden01 wrote:
hero22 wrote:Its a joke really. People are getting 80% to stay home so no travel costs, lunch costs and the mortgage holidays etc. Rest of us are busting are balls and paying the extra tax, travel costs etc and being exposed to the virus. I'm glad of the furlough as my missus is on it and its a one less thing to worry about if she is isn't going out in the morning but it should never have been as high as that. Maybe if it hadn't been the amount of parcels coming through Wouldn't be as crazy.

I'm glad your taking a keen interest in my posts. If you take an even keener interest in the above one, my issue with the furlough is that it was set too high, maybe if it had been 60% people may not have been as keen to purchase everything that amazon has for sale. Am I glad of furlough for personal peace of mind yep, do I agree with its current format nope. Am I hypocrite most definitely.

Hypocrite you definitely are and the more people buy an post packets or whatever else the safer i will feel im my job long term