The Chancellor Rishi Sunak is set to extend the furlough scheme for workers who are temporarily laid off due to the pandemic.
The furlough scheme is costing the taxpayer £8bn as around 6.3m people are currently receiving up to 80% of their salaries.
Last week the Chancellor warned that the furlough scheme is not “sustainable” and said there will be no “cliff edge” cut off.
Torsten Bell, chief executive of the Resolution Foundation think tank and an early advocate of the scheme, said, “Moving too quickly could spark a huge second surge in job losses at a time when unemployment already looks set to be at the highest level for a quarter of a century.
“This policy has made a huge difference in this crisis. It now needs careful and gradual change to ensure the benefits it has provided are secured rather than squandered.”
The managing director of leisure operator GLL Mark Sesnan warned, “Industries such as leisure and hospitality [must be] protected.
“This is because, in order to adhere to social distancing guidelines, we will have to operate at a significantly reduced capacity.
“In turn, this will have a major impact on the number of staff able to return to work fully.”
Lord Mervyn King, the former governor of the Bank of England, told BBC Radio 4’s Today programme, “The real cost of this shutdown is not measured by the impact on the public finances but by the lost incomes and outputs in the economy, a cost which is likely to end up as an order of magnitude (though no one can really know this) of several hundred billion pounds.”