Chancellor Rishi Sunak has extended the furlough scheme for one month until the end of April next year, contributing 80% of wages (or up to the £2500 cap) until the end of the furlough scheme. Mr Sunak was originally going to review furlough in January, but in his statement yesterday afternoon, the Chancellor said he decided to bring his review forward to give businesses certainty going into the new year.
The scheme was originally due to expire at the end of March but the announcement suggests the Treasury believes the economy will still be struggling to cope with the impact of coronavirus further into the year and silences speculation that employers would have to make contributions from the end of January.
“Our package of support for businesses and workers continues to be one of the most generous and effective in the world – helping our economy to recover and protecting livelihoods across the country,” said Sunak.
“We know the premium businesses place on certainty, so it is right that we enable them to plan ahead regardless of the path the virus takes, which is why we’re providing certainty and clarity by extending this support.”
The Government says its scheme has protected 9.6 million jobs across the UK. This will be a welcomed update to many struggling businesses at such an uncertain time as redundancies also reached a record high in the three months to October, with the unemployment rate at 4.9%. The chancellor also confirmed an extension to the Government-guaranteed Covid-19 business loan schemes until the end of March.