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Britain says around a quarter of workers furloughed

Outbreak of the coronavirus disease (COVID-19) in London

By Andy Bruce

LONDON (Reuters) - Around a quarter of employees in Britain have been furloughed and companies have claimed 8 billion pounds ($9.9 billion) from the government to sustain their wage bills during the coronavirus lockdown, tax authorities said on Monday.

HM Revenue and Customs said on Twitter that 6.3 million workers from 800,000 employers had been furloughed, citing figures up to midnight (2300 GMT) on Sunday.

That accounts for 23% of Britain's 27.5 million private sector workers, according to the most recent labour market data, and underlines how heavily the world's fifth-largest economy is leaning on the state during the coronavirus pandemic.

Under the Coronavirus Job Retention Scheme, which is central to efforts to stop companies laying off workers during a forced shutdown of much of the economy, the state pays 80% of workers' pay up to 2,500 pounds a month.

The scheme is due to run until the end of June, but finance minister Rishi Sunak said on Monday there would be "no cliff edge".

"I am working as we speak to figure out the most effective way to wind down the scheme and ease people back into work in a measured way," Sunak said in an ITV News interview.

"But as some scenarios have suggested we are potentially spending as much on the furlough scheme as we do on the NHS (National Health System) for example. Now, clearly that is not a sustainable situation."

The scheme is likely to cost the public finances around 39 billion pounds, based on an assumption that 30% of employees are enrolled, Britain's official budget forecasters have said.

The figures came as pensions minister Therese Coffey said the government received 1.8 million claims for welfare payments between March 16 and the end of April via its 'Universal Credit' benefits system.

Universal Credit benefits are paid to people in work as well as those who have lost their jobs.

Coffey said that overall, the volume of welfare claims had been six times bigger than pre-coronavirus during that period, and that in one particular week the increase had been tenfold.

Last week an official survey showed two thirds of British firms had asked for public money to pay staff they have temporarily laid off, pointing to a strong take-up for a key part of the government's plan to soften the economic impact of the coronavirus.

Another part of the government's strategy - offering state-backed loans to companies - has made less progress.

Data from a finance industry group showed government-backed bank lending to small and medium-sized businesses rose to 4.1 billion pounds by April 28, up from 2.8 billion pounds the previous week.

(Reporting by Andy Bruce; editing by William James and Alistair Smout)