Chancellor Rishi Sunak is to tell employers they must contribute to the salaries of furloughed workers, in a move that may put some jobs at risk.
The Government currently pays salaries in full, with furloughed staff getting 80% of their usual pay up to £2,500-a-month. Firms are free to top this up themselves, but they don't have to.
Mr Sunak is now set to announce that the Government will only pay around 60% of salaries, with employers required to provide the rest themselves. If firms fail to top up salaries to at least 80% then they won't be eligible to take part in the scheme at all.
It's likely to mean that some of the 8.4 million people currently on furlough are simply made redundant, as some businesses will argue they cannot afford to make even a small contribution to wages.
It's been reported that the changes will come into effect in August. The details will be confirmed officially by Mr Sunak at the daily Downing Street press conference this afternoon.
The Government has paid out £15bn in furlough payments so far, and Mr Sunak is expected to say this cannot last forever.
Firms will also be asked to pay National Insurance and pension contributions for furloughed staff. The good news for employers is that they will also be allowed to ask furloughed staff to return to work on a part-time basis. At the moment, anyone on furlough is barred from doing any work for their employer at all.
Meanwhile Mr Sunak is facing calls, including from a cross-party group of 113 MPs, to extend the scheme supporting self-employed workers past Sunday or risk leaving many “without work and without support”.
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It comes after Boris Johnson announced a gradual easing of the lockdown in England, with friends and families able to meet in parks and gardens in socially distanced groups of six from Monday.
The Prime Minister said all five of his tests to move into the next phase had been met, allowing schools to begin reopening and greater contact to be permitted from Monday.
Mr Johnson on Thursday confirmed people will be able to see “both parents at once, or both grandparents at once”, in what he said will be a “long-awaited and joyful moment” for many.
But the PM continues to be dogged by questions over his top aide Dominic Cummings after Durham police said he may have committed “a minor breach” of lockdown rules.
In Scotland, a gradual relaxation of lockdown begins on Friday with a similar plan to allow outside gatherings, though First Minister Nicola Sturgeon is permitting groups of up to eight people.
Her Welsh counterpart Mark Drakeford is set to announce that outdoor meet-ups can resume from Monday, but he will unveil new “stay local” guidance not to travel more than five miles.
The easing of restrictions also means the gradual reopening of the economy, with outdoor retail and car showrooms opening in England from Monday ahead of a greater opening of non-essential shops.