There are obviously no quick fixes to Covid, but hopefully the extension of the furlough scheme might help in the retention of jobs.
Workers across the United Kingdom will receive increased support with a five-month extension of the furlough scheme into Spring 2021, the Chancellor announced today.
The Coronavirus Job Retention Scheme (CJRS) will now run until the end of March with employees receiving 80% of their current salary for hours not worked.
Similarly, support for millions more workers through the Self-Employment Income Support Scheme (SEISS) will be increased, with the third grant covering November to January calculated at 80% of average trading profits, up to a maximum of £7,500.
The Chancellor of the Exchequer Rishi Sunak said:
I’ve always said I would do whatever it takes to protect jobs and livelihoods across the UK – and that has meant adapting our support as the path of the virus has changed.
It’s clear the economic effects are much longer lasting for businesses than the duration of any restrictions, which is why we have decided to go further with our support.
Extending furlough and increasing our support for the self-employed will protect millions of jobs and give people and businesses the certainty they need over what will be a difficult winter.
The Chancellor also announced today an increase in the upfront guarantee of funding for the devolved administrations from £14 billion to £16 billion. This uplift will continue to support workers, business and individuals in Scotland, Wales and Northern Ireland.
The furlough scheme was initially extended until 2 December. But the government is now going further so that support can be put in place for long enough to help businesses recover and get back on their feet – as well as giving them the certainty they need in coming months. Evidence from the first lockdown showed that the economic effects are much longer lasting for businesses than the duration of restrictions.
There are currently no employer contribution to wages for hours not worked. Employers will only be asked to cover National Insurance and employer pension contributions for hours not worked. For an average claim, this accounts for just 5% of total employment costs or £70 per employee per month. The CJRS extension will be reviewed in January to examine whether the economic circumstances are improving enough for employers to be asked to increase contributions.
On top of this, the government has announced:
- cash grants of up to £3,000 per month for businesses which are closed worth more than £1 billion every month
- £1.1 billion is being given to Local Authorities, distributed on the basis of £20 per head, for one-off payments to enable them to support businesses more broadly
- plans to extend existing government-backed loan schemes and the Future Fund to the end of January, and an ability to top-up Bounce Back Loans
- an extension to the mortgage payment holiday for homeowners
- up to £500 million of funding for councils to support the local public health response.
- Citizens Advice said:
Alistair Cromwell, Acting Chief Executive of Citizens Advice, says:
“Today’s announcement is hugely welcome and will help provide both employees and employers with some certainty through the turmoil of the next five months.
“We’ve seen how important the safety net of the furlough scheme has been in protecting jobs, ensuring those workers who are most vulnerable aren’t put at unnecessary risk, and safeguarding viable businesses.
“The government was right to introduce it back in March and it is right to extend now.”