Sunak extends furlough scheme ‘lifeline’ until end of September

RISHI Sunak will today extend the “lifeline” of the furlough scheme for another five months to help protect millions of British jobs as the country begins to look towards recovery from the pandemic.

Amid an unprecedented economic background, the Chancellor will, in his Budget statement to the Commons, again pledge to do “whatever it takes to support the British people and businesses through this moment of crisis”.

The Job Retention Scheme, which began last March and was due to close on April 30, has protected 11.2 million jobs since the start of the pandemic at a cost of £54 billion to the taxpayer. The furlough scheme will now run until the end of September.

Under this, the sixth extension, employees will continue to receive 80 per cent of current salary until the scheme ends, with employers asked – as restrictions are eased and the economy begins to reopen – to contribute 10% of wages in July and 20% in August and September towards the hours their staff do not work.

In what the Treasury billed as a “major improvement in access to the self-employed scheme,” Mr Sunak, right, will announce more than 600,000 people, many of whom became self-employed in 2019/20, will now be able to claim direct cash grants under the Selfemployment Income Support Scheme. The Chancellor 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.”

Last month, Boris Johnson made clear the UK Government would not “pull the rug” on support for businesses and families during the pandemic and expectations are high that the Chancellor will not only extend the furlough scheme but also extend the reduced VAT rate, the stamp duty holiday in England and the extension to £20 weekly rise in Universal Credit until the summer at least.

But as Mr Sunak pledged to use the Treasury’s

“full fiscal firepower” to protect jobs, he also said he wanted to be “honest” and warned: “Once we are on the way to recovery, we will need to begin fixing the public finances.” This is code for tax rises, which are likely to mainly come in another Budget expected in November.

Kate Forbes, the Scottish Government’s Finance Secretary, insisted the Budget must provide adequate funding for Scotland and respect the devolution settlement.

“The Chancellor must not turn this into a Budget that centralises resources and decision-making at Westminster. We are still in the throes of a national emergency and it is vital we receive the funds needed to continue to support Scottish businesses and livelihoods,” she declared.

Responding to the extension to the furlough and self-employed support schemes, Labour’s Bridget Phillipson chided the Chancellor for delaying the announcements until the eve of the Budget, which, she said showed the “focus is on Rishi Sunak getting his moment in the sun rather than protecting jobs and livelihoods”.

Adam Marshall, Director General of the British Chambers of Commerce, said many firms would be “breathing a huge sigh of relief at the furlough scheme extension. It gives firms much more clarity on the way ahead and will allow many to plan with greater optimism and confidence as they look to restart and rebuild over coming months.”