Furlough scheme extended until end of March

Rishi Sunak (Credit: Flickr / HM Treasury)

Chancellor Rishi Sunak has extended the Government’s furlough scheme until the end of March 2021.

In a statement in the House of Commons, Sunak said: Our highest priority remains the same; to protect jobs and livelihoods. Given the significant economic uncertainty, we can announce today that the furlough scheme will be extended until the end of March.”

The Government will continue to pay 80% of the wages of furloughed staff and review the measures in January.

Sunak also said because of the new measures, the Government’s Job Retention Scheme has been postponed.

There was also good news for the self-employed, with the Chancellor announcing that the Government will pay 80% of average profits for the period November to January.

Paul Cherpeau, chief executive of Liverpool Chamber of Commerce, said: “We welcome the extension of the furlough and self-employment schemes to March.

“Businesses need ongoing and sustained support – however, there is still a gap around limited company directors which particularly affects small businesses across our membership, and we will continue to push for further support.”

Richard Hepburn, operations manager at Bolton-based Gorilla Accounting, said: “Today’s government announcement has offered a lot of reassurance to millions of people across the UK, as the furlough scheme had been due to end in December.

“The extension until the end of March is welcome news, as the end of furlough would have no doubt affected millions of employees, the self-employed and businesses across the country.

“With 80% of income continued to be covered by the Government, there is some breathing space for employees and businesses, despite the stress the second lockdown is set to put on the UK economy.

“It was hugely important to people across the country that the Government provided an adequate level of support, and through this extension they have gone some way to achieving that.”

Michael Kill, chief executive of the Night Time Industries Association, said: “While the crisis deepens and we move into a national lockdown for 28 days, we welcome the somewhat belated furlough update until March next year.

“The furlough scheme will absolutely help preserve jobs within the sector, but the challenge still remains, where there is still a considerable void in financial support for night time economy businesses, will there be jobs to go back to?

“Commercial rents are also a big concern for our sector, where the Government has decided to push the issue further down the line with the forfeiture moratorium running until the 31st December, but business suffering under thousands of pounds of rent arrears.”

He added: “We appreciate that safety is paramount, but at some point we’ve got to consider the human element here and the immense pressure that individuals, venues owners, staff and freelancers are under at the moment given the current financial, economic, cultural and social wellbeing environments that are being presented by government, particularly around our sector.”

Subrahmaniam Krishnan-Harihara, head of research at Greater Manchester Chamber of Commerce, said: “We welcome today’s announcements. Along with the enhanced income support grant for the self-employed, today’s package is an important step in providing certainty to business, not just for the duration of the second lockdown, but through the festive trading period and into 2021.

“Greater Manchester Chamber’s sixth GM COVID-19 Recovery Tracker survey, covering the first three weeks of October, found that customer demand has decreased since September.

“There was an associated worsening in cash positions for many businesses. Diminished cash reserves and poor business confidence will likely thwart any expansion in productive capacity, so investment prospects are likely to be subdued. Under these circumstances, the business community needs clarity and assurance that the Government will provide support to avert business failure and unemployment.

“Since August, Greater Manchester Chamber has consistently called for support to be commensurate with the restrictions imposed on businesses.

“We have also had reservations about piecemeal extensions to support measures and urged the Government to chart a longer-term recovery plan.

“That plan should include concrete steps to prevent further spread of COVID-19, which might necessitate yet another lockdown.

“That means the Government should utilise the four-week lockdown period as an opportunity to radically improve the Test, Track and Isolate system. Let us be clear: there is no substitute for a fully functioning economy.

“It is certain that COVID-19 will remain unpropitious to the economy, business growth and employment for many more months.

“Today’s intervention by the Chancellor, the seventh since March, may not be the last. Had the extension to the furlough scheme been made in September, it is likely that some jobs would have been saved.

“Yet, late as it may be, we know that businesses across the country will have sighed a breath of relief this afternoon. Better early than late but better now than later, or never.”

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