Rishi Sunak will not extend the furlough scheme despite the likely delay of lockdown easing, according to reports.
The lifeline for many struggling workers is set to be phased out from July 1, when the Government’s share of contributions begins to gradually fall.
It is currently expected to end altogether in September, with many businesses still struggling to get back on their feet following more than a year of the pandemic.
Boris Johnson is set to give an update on the final phase in the roadmap out of lockdown on Monday evening.
While no formal announcement has yet been made he is widely expected to declare that there will be a delay to the final stage of easing restrictions, by four weeks.
The Daily Mail reports that despite the looming delay the Chancellor has thrown out demands from business bodies to extend the financial aid scheme.
The British Chamber of Commerce was said to have urged the Chancellor to halt the winding down of the scheme if lockdown was extended.
Hospitality chiefs claimed as many as 200,000 jobs could be at risk.
The paper claims sources close to Mr Sunak insisted the furlough scheme timetable would stay unchanged.
They said that by extending support to the end of September the Treasury had already ‘gone long’ in case there was any delay to reopening.
Trade body UKHospitality called for Mr Sunak to keep the full relief programme in place for another three months until early October.
Chief executive Kate Nicholls said: “We recognise that the Chancellor has provided long-term support for the sector which extends into the recovery period, but there is no doubt that any extension to the restrictions will be challenging for sectors yet to open and those still trading at a loss to navigate.
“Businesses need a swift, publicly-stated commitment that such support will be in place in the event of any delays, giving them much-needed reassurance after more than 15 months of closure and severely disrupted trading.
“Hospitality is desperate to get back to what it does best and can play a key role in the economic recovery of the UK – but only if it is given the proper support.”
Currently the government is paying 80 per cent of wages up to £2,500 as part of the Coronavirus Job Retention Scheme.
From July government contributions will fall to 70 per cent up to £2,187.50, and then 60 per cent up to £1,875 in August and September.
It is then set to end altogether.
On Monday Boris Johnson is set to give an update on plans for the next and final phase of easing lockdown restrictions.
It has been widely reported that he is expected to announce a four-week delay for ending lockdown.