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Furlough scheme extended until end of March, Chancellor Rishi Sunak announces

Written by on 5th November 2020

The furlough scheme will be extended until the end of March, the chancellor has announced.

The scheme, in which employees receive four-fifths of their current salary up to a maximum of £2,500 of hours not worked, was originally scheduled to end last month.
But it was extended when Prime Minister Boris Johnson announced a new four-week lockdown in England last weekend.
Addressing MPs in the Commons on Thursday, Rishi Sunak announced a further extension into next year.
He confirmed the payments would remain at 80% of people’s wages, with a review of the policy in January.
This would “decide whether economic circumstances are improving enough to ask employers to contribute more”, Mr Sunak said.
The chancellor also announced support for the self-employed, with the next income support grant for November to January increasing to 80% of average profits up to £7,500.
“Our highest priority remains the same: to protect jobs and livelihoods,” he told MPs.
Mr Sunak said that “upfront guaranteed funding” for the devolved administrations will be increased by £2bn.
“The furlough scheme was designed and delivered by the government of the United Kingdom on behalf of all the people of the United Kingdom, wherever they live,” he said.
“That has been the case since March, it is the case now and will remain the case until next March.”
And in an attempt to pre-empt criticism over another U-turn, Mr Sunak said he needed to make “rapid adjustments” to the government’s economic response to the COVID-19 pandemic because of how the virus has spread.
“I know that people watching at home will have been frustrated by the changes the government has brought in during the past few weeks,” he said.
“I have had to make rapid adjustments to our economic plans as the spread of the virus has accelerated.”
The chancellor said the second lockdown – which was the “only viable solution left to protect our NHS” – had necessitated a change in approach.
He told MPs: “And so given these changed public health restrictions and the economic trauma they would cause in job losses and business closures, I felt it best to extend the furlough scheme rather than transition at that precise moment to the new job support scheme.
“Political opponents have chosen to attack the government for trying to keep the economy functioning and to make sure the support we provide encourages people to keep working.
“And they will now no doubt criticise the government on the basis that we have had to change our approach. But to anyone in the real world that’s just the thing you have to do when the circumstances change.
“We all hope for the best but make sure we plan for any eventuality.”
Mr Sunak said he would “leave it to the people” to decide whether the government’s actions were right.
“What I know is the support we’re providing will protect millions of jobs,” he added.
“What I know is that it’s never wrong to convey confidence in this country and our economy through our words and actions, and what I know is today’s announcement will give people and businesses up and down our country immense comfort over what will be a difficult winter.”

Secretary of State for Wales Simon Hart said:

“We have supported more than half a million livelihoods in Wales so far during  the pandemic and the package announced today provides people and businesses with the certainty they need in the months ahead.

“As well as tackling the coronavirus, the UK Government’s priority has been to protect jobs across Wales and the rest of the UK. We will also continue to provide an unprecedented level of financial support for the devolved administration in Wales with an extra £5 billion this year now guaranteed to ensure it can plan its response in the coming months.

“We are tackling the pandemic as one United Kingdom and workers, families and businesses across Wales will continue to have full access to our unprecedented UK-wide financial support.”