Rishi Sunak extends UK's furlough wage support scheme until March 2021

Aditi Khanna
·3-min read

London, Nov 5 (PTI) UK Chancellor Rishi Sunak on Thursday extended the furlough, or taxpayer-funded wage support scheme, until the end of March next year as England entered its second coronavirus lockdown to last at least until December 2.

Sunak, who has been leading the UK's economic response to the pandemic, made a statement in Parliament to confirm that the scheme will pay up to 80 per cent of employee wages up to GBP 2,500 a month, with a review of the policy scheduled for January next year.

The revised version of the furlough or forced leave scheme, which is designed for employees to hold on to their jobs through lockdown, will mean that anyone made redundant after September 23 can be re-hired and put back on furlough.

“I’ve always said I would do whatever it takes to protect jobs and livelihoods across the UK – and that has meant adapting our support as the path of the virus has changed,” he said.

“It’s clear the economic effects are much longer lasting for businesses than the duration of any restrictions, which is why we have decided to go further with our support. Extending furlough and increasing our support for the self-employed will protect millions of jobs and give people and businesses the certainty they need over what will be a difficult winter,” he said.

Opposition Labour's Shadow Chancellor Anneliese Dodds accused Sunak of ignoring objections to the government's measures 'until the last possible moment' and reminded him of his reluctance to extend the furlough scheme.

But Sunak defended his policy stance, saying: 'It is not a weakness to be fast-moving in a crisis, but rather a strength.' Under the revised plans, the Coronavirus Job Retention Scheme (CJRS), launched earlier in the year, will now run until the end of March next year with employees receiving 80 per cent of their current salary for hours not worked.

The Self-Employment Income Support Scheme (SEISS) will also be revised, with the third grant covering November to January 2021 calculated at 80 per cent of average trading profits, up to a maximum of GBP 7,500.

Sunak also announced an increase in the upfront guarantee of funding for the devolved administrations from GBP 14 billion to GBP 16 billion to support workers and business in Scotland, Wales and Northern Ireland.

The furlough scheme was initially extended until December 2. But the UK Treasury department said it is now going further so that support can be put in place for long enough to help businesses “recover and get back on their feet”.

Evidence from the first lockdown showed that the economic effects are much longer lasting for businesses than the duration of restrictions, the Treasury said.

Under the extended furlough scheme, employers will only be asked to cover National Insurance and employer pension contributions for hours not worked by an employee.

It is intended to keep people in jobs while there may be disruption to the business due to the coronavirus lockdown.

“The CJRS extension will be reviewed in January to examine whether the economic circumstances are improving enough for employers to be asked to increase contributions,” the Treasury said.

It claimed that the furlough scheme has already protected over nine million jobs across the UK, and self-employed people have already received over GBP 13 billion in support.

This is in addition to billions of pounds in tax deferrals and grants for businesses.

Besides, there are also cash grants in place of up to GBP 3,000 per month for businesses which are closed, worth more than GBP 1 billion every month.

The Treasury said that GBP 1.1 billion is being given to local authorities, distributed on the basis of GBP 20 per head, for one-off payments to enable them to support businesses more broadly.

Also, the existing government-backed loan schemes and the Future Fund have also been extended to the end of January alongside the offer for businesses to top-up Bounce Back Loans as part of efforts to support companies struggling due to the lockdown. PTI AK IND