The UK’s furlough scheme will be extended until September in tomorrow’s Budget, ensuring the government will pay millions of people’s wages past when Covid restrictions are set to end.
The chancellor said tonight that it was “only right” that the government continued to help businesses and pay workers’ wages as the UK looks to lift all Covid restrictions permanently over the next four months.
The scheme currently sees the government pay 80 per cent of employees’ wages, up to £2,500 a month, for hours not worked due to the Covid lockdown.
Sunak’s extension will see the same terms until the end of June, with employers then asked to pay 10 per cent of wages paid out through the scheme in July and 20 per cent in August and September.
The chancellor will also announce further support for self-employed workers, with grants worth 80 per cent of three months’ average trading profits, up to £7,500, made available.
Boris Johnson’s lockdown roadmap sees non-essential retail and outside hospitality open no earlier than 12 April, while indoors hospitality, cinemas and theatres will open no earlier than 17 May.
The government is hoping it can lift all restrictions on 21 June.
“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,” Sunak said.
The furlough scheme has been running for almost one year now and is estimated to cost around £6bn a month.
It has supported 11.2 million jobs since the start of the pandemic.
The British Chambers of Commerce director general Dr Adam Marshall said many businesses would be “breathing a huge sigh of relief”.
“The furlough scheme has been a lifeline for companies all across the UK,” he said.
“This extension 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 the coming months.”
UKHospitality chief executive Kate Nicholls said the extension would “help keep businesses afloat and more jobs secure as they trade their way back to prosperity”.