Extending the government’s furlough scheme beyond October would keep people in “suspended animation”, Boris Johnson has said.
Speaking to the Evening Standard the prime minister made clear that the multi-billion-pound wage guarantee will not be given a new lease of life.
And he said letting the state pay the wages of millions of employees — a move aimed at preventing a wave of redundancies amid the coronavirus shutdown — was not “healthy either for the economy or for you as an employee”.
The Treasury has previously confirmed that Job Retention Scheme will keep paying 80% of people’s wages - up to £2,500 per month - as they stay at home during the pandemic until the end of July.
From 1 July, staff can return to work part time, with employers covering their wages when they work and the furlough scheme doing so when they are not. The from August, firms will be asked to pay national insurance and pensions contributions, before being asked to foot 10% of a furloughed employees’ pay from September and then 20% in October.
The scheme will then be brought to a close as October ends.
Johnson said: “We’ve spent £120bn supporting people, it’s a huge commitment and we have put our arms around people.”
But he added: “The best way forward for us now is to work together to beat the virus and get the economy back on its feet.
"We’re going to do amazing things; we’re going to build, build, build, invest massively in our country.
“But I think people need to recognise that the particular restrictions that furlough places on you are not, in the long term, healthy either for the economy or for you as an employee.”
The PM said: “You are keeping people in suspended animation. You are stopping them from actually working.
"I am being absolutely frank with you, we are pushing it out until October but in the end you have got to get the economy moving.”
Since announcing the changes in May, the Treasury has faced calls to extend the furlough scheme to hard-hit sectors including tourism, hospitality and retail.
There have also been demands for targeted financial support to areas facing a local lockdown after Leicester saw the imposition of a string of restrictions including the re-closure of non-essential retail.
Matt Honeycombe-Foster is the acting editor of CSW's sister site Politics Home, where a version of this story first appreared.