RISHI FURLOUGH UNTIL OCTOBER
He pledges to do ‘whatever it takes’ to rescue the economy Move takes £5bn-a-month policy beyond end of lockdown
the furlough scheme that has cost Britain £53billion will be extended to the end of September as Rishi Sunak vows to do ‘whatever it takes’ to help the economy recover.
In today’s Budget, the Chancellor will extend the job protection scheme for an extra five months beyond the current deadline at the end of April.
the move takes the scheme, which has cost almost £5 billion a month, well beyond the official target for ending lockdown on June 21, and raises questions about whether ministers expect to lift all restrictions at that point.
Self-employed workers will also benefit from another round of support paying them 80 per cent of profits. In a surprise move, the scheme will be extended to cover 600,000 ‘excluded’ workers who did not qualify before because they did not begin trading until 2019.
the Chancellor is also expected to extend the £20-a-month top-up to Universal Credit for another six months.
the current VAt cut for hospitality and tourism firms will also be extended, probably until the end of the summer. And a business rates holiday for hard-hit sectors will continue beyond the current deadline at the end of this month.
Mr Sunak is also launching a £100million taskforce to tackle furlough fraud, estimated to have cost up to £5billion.
the Queen last night spoke with Mr Sunak by phone instead of the traditional audience on the eve of the Budget. the treasury shared a photograph of the chancellor during the call.
the Chancellor said last night that support schemes, whose total cost is near £300billion, had been ‘ a lifeline to millions’. today he will vow to use the state’s full ‘fiscal firepower’ to protect jobs and livelihoods. ‘We will continue doing whatever it takes to support the British people and businesses through this moment of crisis,’ he added.
Government sources indicated only last week that the furlough scheme and other support measures would carry on until at least the end of June. Mr Sunak’s decision to push on until the end of September, three months after all restrictions are due to be lifted, will raise eyebrows. treasury sources said the move was to avoid a ‘cut- off ’ as some firms resume trading for the first time in more than a year .
‘they don’t want a cliff edge and we have listened,’ said a source. But the treasury also acknowledged the extension would be a ‘cushion’ if reopening is delayed. the cost of the scheme is due to be curbed after the economy is reopened. Furloughed staff now get 80 per cent of pay from the state, up to £2,500 month, with employers paying only national insurance and pension contributions. From July forms will also have to pay 10 per cent of wages as the state share shrinks to 70 per cent – and in August the figures will change again, to 20 per cent and 60 per cent respectively.
Almost five million people were furloughed at the end of January - double the number in October, but well below the peak of almost nine million last May. Up to last week the scheme had cost £53.4billion. Business leaders welcomed the new support last night. Kate Nicholls of UK hospitality called it ‘a very positive move. And CBI chief economist Rain NewtonSmith said: ‘extending the scheme will keep millions more in work and give businesses the chance to catch their breath as we carefully exit lockdown.’