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Government Will Extend Furlough Scheme Until The End Of September

Government Will Extend Furlough Scheme Until The End Of September
3 min read

Chancellor Rishi Sunak will announce that he is extending the furlough scheme until the beginning of the autumn to support people out of work because of Covid-19 through the UK's recovery.

Speaking before he delivers the Budget on Wednesday afternoon, Sunak said: “Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK.

“There’s now light at the end of the tunnel with a roadmap for reopening, so it’s only right that we continue to help business and individuals through the challenging months ahead — and beyond".

The furlough scheme — or Coronavirus Job Retention Scheme — has contributed to the wages of over 11m workers since it was first rolled out at the beginning of the coronavirus pandemic.

However, opposition parties and business groups have in recent weeks warned Sunak that millions nationwide faced a cliff-edge at the end of April when the scheme was set to expire.

The Confederation of British Industry (CBI) had urged the Chancellor to withdraw financial support for workers "gradually" and not in a way that outstrips the removal of lockdown restrictions.

The government expects to be able to reopen all sections of the economy at the end of June.

Non-essential businesses will not re-open until mid-April at the earliest, according to the government's roadmap for easing lockdown restrictions in England, while indoor hospitality businesses like pubs and restaurants will not be allowed to open their doors until May 17th.

Furloughed workers will continue to receive 80% of their wages as part of the scheme, the Treasury said on Tuesday night, with companies asked to contribute 10% to unworked hours of their employees from July, and then 20% from August. 

Sunak will also announce that he is expanding the Self-Employment Income Support Scheme to include people have recently become self-employed. The scheme was previously available only to self-employed people who could provide tax returns for 2018-2019, meaning many missed out.

Around 600,000 more self-employed people will be eligable for government support as a result.

They will be able to apply for funds covering three months' average trading profits up to £7,500.

The CBI's Chief Economist Rain Newton-Smith said extending furlough "quite simply" would "keep millions more in work and give businesses the chance to catch their breath as we carefully exit lockdown".

She said: “The furlough scheme has been a stand-out success throughout the crisis. It’s common-sense to keep the scheme going while business resilience remains fragile for some months yet.

“As we make progress into the summer, it’s right that businesses start contributing a little more as revenues start to recover. Meanwhile it’s great to see more support for the newly self-employed, who have missed out over the last year.”

Kate Nicholls, CEO of Hospitality UK, said the move would "help keep businesses afloat and more jobs secure as they trade their way back to prosperity in the months and years to come".

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