Sadiq Khan urges furlough extension to avoid mass unemployment

28 August 2020, 12:18

Sadiq Khan has urged the Chancellor to extend the furlough scheme, saying that companies will go bust if he doesn't.

Rishi Sunak's furlough scheme is due to come to an end on 31st October and the Mayor of London said he is worried that companies will not be able to afford to pay those staff.

He said it would be better to give those companies and employees a helping hand now, rather than a handout later.

Speaking to James O'Brien, he said: "23% of the businesses that we've spoken to, particularly in accommodation, food and culture sectors, are moderately or severely worried about becoming insolvent over the short-to-medium term. 23%.

"Bear in mind that in London, we have 1.39 million Londoners who are currently furloughed, the problem is this.

"At the moment, employers are having to pay National Insurance and pension contribution. From 1st September, they will be required to pay 10% of salary. From 1st October, 20% of salary. From November, all of it.

"They have not got the money to do so.

"The worst case scenario is those 1.39 million Londoners on furlough could be transitioned to be made redundant/unemployed.

"Germany and France have extended their equivalent of the furlough schemes. France until the end of 2021, Germany til 2022. Belgium to the end of 2020.

"My concern is that if the government lift their support prematurely, they will end up paying the bill for insolvency and unemployment benefits.

"Give a helping hand now, rather than a handout later."