Budget 2021: Rishi Sunak extends furlough until September

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·2-min read

Watch: Chancellor Rishi Sunak will extend furlough scheme until end of September

UK chancellor Rishi Sunak has handed a vital lifeline to millions of workers by extending the government's furlough scheme until September and expanding support for the self-employed.

The Treasury on Tuesday night said the coronavirus job support scheme would be extended until the end of September. The scheme was due to finish at the end of April.

Business groups had urged the chancellor to extend furlough after the government last week announced its roadmap for reopening the economy. Some businesses would still face restrictions until June under the timetable set out by prime minister Boris Johnson.

The Chancellor Rishi Sunak appears on Sky TV's Sophy Ridge on Sunday show and the BBC TV's Marr Show with only three days before he delivers the budget. Photo: HM Treasury/Flickr
UK's chancellor of the exchequer Rishi Sunak. Photo: HM Treasury/Flickr

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"Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK," Sunak said in a statement.

“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.”

Terms of the programme will remain unchanged until June, with the government paying 80% of furloughed staff's wages up to a maximum of £2,500. Employers will be asked to contribute 10% of costs from July and 20% of costs from August, similar to the tapering of furlough last summer.

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More than 11 million people have been furloughed at some point since the coronavirus job support scheme was first set up last March — around a third of the UK workforce. An estimated 4.7 million people were on furlough at the end of January, according to the Treasury. The scheme has cost the government over £50bn ($69bn) to date.

The chancellor will on Wednesday also expand the government's self-employed income support scheme, offering grants to an estimated 600,000 people who became self-employed in 2019/20 and were previously not covered by the scheme. The government has been heavily criticised for gaps in its support schemes that excluded over 1 million of self-employed and company directors.

Self-employed workers can claim a fourth grant under the income support scheme from next month, worth up to £7,500. Details of a fifth grant will be announced in the budget.

The chancellor is expected to say he will do "whatever it takes" to support jobs and businesses through this "moment of crisis".

“We’re using the full measure of our fiscal firepower to protect the jobs and livelihoods of the British people," Sunak will say in his budget statement.

The chancellor will deliver the budget in parliament at around 12.30pm on Wednesday.

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