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Furlough scheme extended to end of March 2021




Chancellor Rishi Sunak
Chancellor Rishi Sunak

The jobs furlough scheme set up in the wake of the coronavirus outbreak is to be extended until the end of March, Rishi Sunak has told the Commons.

In a major U-turn by the Government, the Chancellor said the move is needed because of the economic situation caused by the Covid-19 pandemic.

Mr Sunak said the Government’s highest priority remains “to protect jobs and livelihoods”.

He had previously extended the furlough throughout November due to the second national lockdown in England.

The Chancellor told the Commons: “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 per cent of the normal amount.

“All employers will have to pay for hours not worked is the cost of employer NICs and pension contributions.

“We will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.”

John Bridge, chief executive of the Cambridgeshire Chambers of Commerce , said: “A further extension of the furlough scheme and more generous grants for the self-employed are important steps in protecting jobs and providing certainty for our business communities beyond the immediate shock of a four-week lockdown.

“These changes give businesses significant reassurance over an uncertain winter, but many will understandably still wish for the government to give a clearer view of the road ahead. Government must set out longer-term measures over the next 12 months to give firms greater certainty and confidence to plan proactively, rather than to react to changes in support from week to week.

John Bridge OBE, chief executive of Cambridgeshire Chambers of Commerce
John Bridge OBE, chief executive of Cambridgeshire Chambers of Commerce

“As well as support on jobs, reduced demand will impact firms’ cashflow across the country, not just those placed under the toughest restrictions. More generous grants will be required if those businesses are to weather a difficult winter ahead .

“Despite the Chancellor’s announcement, there are still many businesses and individuals who have, through no fault of their own, been unable to access any government support since the start of the pandemic and will require support if we are to avoid significant increases in unemployment and business failures.

“Ultimately, there can be no substitute for a fully functioning economy. Fundamentally, that means the government using the time afforded to them through another lockdown to significantly improve the Test, Track and Isolate system , which remains key to keeping the economy open.”

Mr Bridge added: “Obviously the government is now not going to pay the £1,000 furlough bonus of delayed.”

In July the government announced that it was to pay employers a £1,000 bonus for every furloughed employee they bring back to work and keep on until January 2021. This was due to replace the furlough scheme.”

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