The government is looking at the return of some furloughed workers on a part-time basis beyond June as Boris Johnson prepares to announce a road map this weekend to get Britain back to work.
The prime minister is under pressure to ease restrictions and start to unlock parts of the economy amid dire warnings that the UK faces its worst recession in three centuries.
Ministers have signalled to business leaders that the furlough scheme could be phased out gradually over the summer rather than end abruptly in June as planned, while also bringing in greater flexibility to allow some workers to return part-time initially.
Businesses have warned that millions of jobs would be at risk in a “cliff-edge” end to the job retention scheme if companies were forced to open during weakened economic conditions after the lockdown ends.
The furlough scheme has proven a core part in the government’s economic bailout, helping pay the wages of more than 6m workers at a vast cost to the public purse.
Business secretary Alok Sharma told business groups on a call on Friday that the plans to extend the scheme were being considered by the Treasury. But he also said no final decision had been made, according to several people with knowledge of the conversation.
“There were positive signals around flexibility of the scheme,” said one person with knowledge of the call, such as “applying to part-time workers and extended by taper”.
Officials say discussions will take place this weekend, when a final decision will be taken on how to phase out the costly programme of support. The chancellor could announce his plans for the scheme as early as Tuesday, said one.
Craig Beaumont, director of external affairs at the Federation of Small Businesses, said: “We really hope to see progress made on a part-time furlough because smaller businesses in particular benefit from being able to quote for new work, keep in touch with employees and pay their invoices.”
The talks come ahead of a televised address by Mr Johnson on Sunday, in which the UK prime minister will map out a gradual exit from the lockdown.
He is also expected to allow unlimited exercise outside people’s homes from Monday, and enable some businesses to ramp up operations where social distancing can be observed.
The daily UK death toll from the virus rose by 626 on Friday, taking the total to 31,241, although official figures suggest that the number of deaths is significantly higher.
The first minister of Wales on Friday gave the clearest insight yet into the limited easing of social distancing measures that could be brought in across the UK next week. Officially extending lockdown for another three-week period, Mark Drakeford announced that from Monday exercise would be allowed more than once a day in Wales.
Garden centres will be allowed to open if they can impose two-metre social distancing rules, and councils will be asked to plan for the reopening of libraries and waste centres.
Mr Drakeford said the changes in Wales would be introduced from Monday “so Wales moves in step with the rest of the UK”. He added: “I don’t believe you will see anywhere in the UK anything other than the most modest of immediate changes broadly of the sort I have proposed in Wales.”
Downing Street would not confirm whether the changes in Wales would also apply to England, but said the UK government remained committed to a four-nation approach “wherever possible”.
During Friday’s daily press conference, George Eustice, environment secretary, said that it was “quite possible” for fast-food restaurants to reopen safely, adding the government had never mandated them to close.
“While clearly restaurants and pubs had to close, we were quite keen to keep that capacity to be able to do takeaway food for people,” he said. “A McDonald’s drive-through is made for the social distancing situation that we are in.”
Nicola Sturgeon, Scotland’s first minister, has made clear that she is also close to approving the easing of measures around the taking of exercise more than once a day, saying on Friday that she would give more detail of her plans over the weekend.
But Ms Sturgeon ruled out other potential relaxation of the curbs, such as reopening garden centres, saying the exercise extension was the only thing she was looking at “in the immediate term”.
Additional reporting by Jim Pickard