RISHI KEEPING FURLOUGH UP TILL OCTOBER
■ EMPLOYEES STILL GET 80% OF WAGES AFTER LOCKDOWN LIFTED TO WARD OFF HUGE JOB LOSSES ■ ‘LIGHT IS AT THE END OF THE TUNNEL,’ SAYS CHANCELLOR AS UK ON ROAD MAP TO RECOVERY
RISHI SUNAK is to extend the furlough scheme for millions of workers until October – to avoid catastrophic job losses after Britain leaves lockdown in June.
The chancellor – unveiling his second budget today – said: ‘There’s light at the end of the tunnel with a road map for reopening – it’s only right we continue to help business and individuals through the challenging months ahead and beyond.’
The furlough scheme – brought in as the first lockdown began last year – will run until September 30 instead of ending on April 30.
But firms will now cover ten per cent of furlough pay from July and 20 per cent in August and September. It also means more than 600,000 people – many who
had to go self-employed – can claim direct cash grants. It added to speculation the £20 per week universal credit boost would be extended by six months.
The costly plan to continue furlough for three months after lockdown is due to end on June 21 and comes with the UK in record peacetime deficit.
The chancellor, said to be working 24/7 for today’s speech, faces a record net public sector debt of £2.1trillion – up £316.4billion since last April.
Government figures suggest 726,000 fewer people are in jobs than a year ago, with more redundancies feared when furlough finally ends. Industry welcomed the steps – accidentally revealed by business secretary Kwasi Kwarteng.
CBI chief economist Rain NewtonSmith called furlough ‘a stand-out success’, adding: ‘Extending it will keep millions more in work and let businesses catch their breath as we carefully exit lockdown.’ But shadow chief treasury secretary Bridget Phillipson said: ‘Announcing it the night before shows the focus is on Rishi Sunak getting his moment in the sun rather than protecting jobs and livelihoods.’
Other likely announcements include a continued freeze on fuel duty, a £300million summer sports recovery package and a £150million fund to save community assets such as pubs.
His party pledged in 2019 not to raise income tax, National Insurance or VAT but Mr Sunak may claw back money by freezing thresholds to haul more into higher categories as wages rise.