Rishi Sunak refuses to rule out extending furlough scheme if second coronavirus wave hits

Rishi Sunak has not ruled out extending the furlough scheme in the event of a second wave of coronavirus.

However the Chancellor said the support system, due to end in October, cannot go on "indefinitely" and keeping it in the long run is "not sustainable".

He has previously repeatedly ruled out extending the scheme, which has helped 9.5 million workers and cost the taxpayer £33.8 billion to date.

Asked on Friday whether the furlough scheme would be extended if a second wave resulted in another national lockdown, Mr Sunak appeared to soften his position and did not rule it out.

He told the BBC: "I don't think it's helpful to sit here and speculate on every potential situation that might arise. It's not something that we want to see happen, and we're doing everything we can ... to stop that from happening."

The Chancellor urged more people to return to the office, adding it would be "good for businesses and good for people". He said it was hard to tell what the "long-term structural impact" of large numbers working from home would be and told LBC radio: "We need to get back to most people being in the office again."

The Treasury has faced warnings that ending the furlough scheme in October (see video below) could see unemployment rising to nearly 10 per cent.

Meanwhile, Labour called for the Government to extend the scheme for the hardest-hit sectors and those who remain under local lockdown.

Mr Sunak later warned on a visit to Scotland that there is "hardship ahead for many people" and, speaking about the decision to end the furlough scheme in October, he told Sky News: "It's one of the most difficult decisions I've had to make in this job.

"I don't think it's fair to extend this indefinitely, it's not fair to the people on it. We shouldn't pretend there is, in every case, a job to go back to. Eight months of support from start to finish is a considerable period of time for the Government to be helping to pay people's wages."

The Job Retention Scheme allows the Government to pay 80 per cent of workers' wages up to a maximum of £2,500 a month.

Fewer than 4.5 million workers are currently furloughed, analysis of Office for National Statistics (ONS) data by economic think tank the Resolution Foundation has shown.

Mr Sunak was in Glasgow (see video below) to highlight the benefits of the scheme, as well as the Government-backed loans that have assisted about 65,000 businesses across Scotland.

Ian Blackford, the SNP's Westminster leader, warned: "Cutting the furlough scheme prematurely is a grave mistake."

On Friday, Mr Sunak pointed out that other support measures, such as changes to universal credit, business rates grants and council tax discounts, would continue after the furlough scheme is due to end. He also said there would be no return to austerity on his watch, adding that public service funding would rise in line with inflation.

The consumer prices index measure of inflation was 0.8 per cent in June, according to the ONS.

Mr Sunak stressed that he was prepared to take "difficult decisions" to restore the public finances to a sustainable footing.

Asked by Times Radio whether his work during the crisis had "dampened" his desire to be Prime Minister, Mr Sunak said: "I don't have that desire."

It comes as a report found that outer London boroughs are likely to be hardest hit by unemployment and poverty after the coronavirus pandemic.

Brent, Barking and Dagenham and Newham are the local authorities that will feel "the full force of the surge in unemployment and poverty", according to charity the Joseph Rowntree Foundation. Significant area of the west Midlands and pockets in the north-east and north-west are also at risk.