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by Kate Proctor and Eleanor Langford
06 November 2020
Furlough scheme extended until March


Furlough scheme extended until March

Chancellor Rishi Sunak has announced the furlough scheme will continue until March 2021 amid damning criticism from Labour that jobs have already been lost and businesses folded.

Sunak's latest intervention, which effectively re-writes his entire Winter Economy Plan, comes amid a worsening economic outlook for the country with the Bank of England announcing a further £150bn in quantitative easing.

Furlough, known officially as the Job Retention Scheme, will be extended until the end of March 2021 at 80 percent of a staffer's wages, with employers expected to pay National Insurance and pension contributions.

It will be reviewed in January and businesses may be asked to increase their contribution, as happened between July and October this year.

On Monday, Sunak extended furlough by one month, until December 2, to cover the period of lockdown restrictions in England.

For self-employed people the Chancellor announced today that their next income support grant for November to January will be 80 percent of average profit up to £7500.

Scotland, Wales and Northern Ireland will also get access to these measures if they need them should they go into a similar lockdown to England.

He said this measure demonstrated the "strength of the union" and the Treasury is for the entire UK.

Measures announced today are the fourth update to the Winter Economy Plan in a matter of weeks, and Sunak said he knew the public would be frustrated.

"I've had to make rapid adjustments to our economic plans as the spread of the virus accelerated," he told the Commons.

He said they thought the government would be able to "stay ahead" of the virus but it had continued to spread and the NHS was at risk of being overrun in a matter of weeks.

In September he announced the furlough would be replaced with a Job Support Scheme from November.  It was for those who could work a third of their hours; the government would pay a third of their wages, and their employer would pay a third.

After significant criticism this would not be enough support, the Chancellor then switched to a far more generous scheme where an employer only had to contribute five percent of an employee's wages and the government would pay two-thirds of wages. They also cut the number of hours an employee must work to get the financial support, from 33 percent of hours to 20 percent.

The Job Retention Bonus' designed to encourage employers to keep on staff will now no longer be paid to firms as it is superseded by furlough.

Labour's shadow chancellor Anneliese Dodds, said the Chancellor has ignored businesses until the "last possible moment" after "jobs have been lost and businesses have gone bust".

She also claimed he knew that the NHS was at risk of being overwhelmed when Sage scientists presented that evidence on 21 September.

"That delay in implementing those measures, we know, has cost livelihood and lives.

"The chancellor can change his mind at the last minute, but businesses can't. We need a chancellor who's in front of the problems we face, not one who's always a step behind."

"How many jobs could have been saved. If this government had recognised reality and let businesses plan for the future? Will the Chancellor apologise to those who've already been made redundant, because of this last minute approach?"

Sunak said there was no perfect moment to enact measures and you only do so when they become "truly unavoidable".

He criticised Labour's policy for a "circuit-breaker" which he said had been unclear and would not support businesses.




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