The UK Government’s Furlough Scheme (officially the Job Retention Scheme) has been extended until the end of March 2021, the Chancellor Rishi Sunak has announced.
In a statement to MPs on Thursday lunchtime, Mr Sunak said;
“We can announce today that the Furlough Scheme will not be extended for one month, it will be extended until the end of March. The Government will continue to help pay people’s wages up to 80% of the normal amount – all employers will have to pay for hours not worked is the cost of employer NICs and pension contributions. We’ll review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.”
Mr Sunak added that this means the Job Retention Bonus will no longer be paid in February, but that it will be ‘redeployed at an appropriate time’.
The Chancellor said that he wanted to give certainty to businesses and people across the UK over the winter months by providing the new support.
Support has also been increased for millions of people who are self-employed. The next Self Employment Income Support Scheme grant will increase from 55% to 80% of average profits, up to £7,500.
The new support follows previously announced measures including business rates relief, reduced VAT for hospitality, accommodation and attractions, plus grant schemes and tax deferrals for other sectors and businesses.
The extension of the Job Retention Scheme and other measures have been endorsed by the Managing Director of the International Monetary Fund, Kristalina Georgieva who said:
“The unprecedented package of fiscal, monetary, and financial sector support measures has helped to sustain incomes, keep unemployment down, and curb corporate insolvencies. It is one of the best examples of coordinated action that we have seen globally. We welcome the continuing efforts the government has made to refine its support measures”
Labour’s Shadow Chancellor Anneliese Dodds criticised the government for changing their plans frequently and making new plans at the ‘last minute’, saying;
“The Chancellor can change his mind at the last minute but businesses can’t. We need a Chancellor who is in front of the problems we face, not one who is always a step behind”.