Rishi Sunak confirms furlough scheme until March in wake of second coronavirus lockdown

Chancellor Rishi Sunak has announced the furlough scheme will be extended to the end of March in a bid to “protect millions of jobs” during the coronavirus second wave.

Explaining the significant reversal in Government policy, Mr Sunak said he had to make “rapid adjustments” to the economic response to Covid-19 pandemic, owing to how the virus has spread.

He told the Commons: “I know that people watching at home will have been frustrated by the changes the Government has brought in during the past few weeks.

“I have had to make rapid adjustments to our economic plans as the spread of the virus has accelerated.”

The announcement came on the day England entered a second national lockdown in the face of surging Covid-19 cases.

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 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.”

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

He also outlined support for those who are self-employed, telling MPs: “For self-employed people, I can confirm the next income support grant which covers the period November to January will now increase to 80 per cent of average profits up to £7,500.”

“Our highest priority remains the same: to protect jobs and livelihoods.”

Rishi Sunak concluded his Commons statement by giving a lengthy justification for the furlough extension, claiming the second lockdown in England was the “only viable solution left to protect our NHS”.

He told MPs: “And so given these changed public health restrictions and the economic trauma they would cause in job losses and business closures, I felt it best to extend the furlough scheme rather than transition at that precise moment to the new job support scheme.

“Political opponents have chosen to attack the Government for trying to keep the economy functioning and to make sure the support we provide encourages people to keep working.

“And they will now no doubt criticise the Government on the basis that we have had to change our approach. But to anyone in the real world that’s just the thing you have to do when the circumstances change.

“We all hope for the best but make sure we plan for any eventuality.”

The Chancellor added he would “leave it to the people” to decide whether the Government’s actions were right, adding: “What I know is the support we’re providing will protect millions of jobs. What I know is that it’s never wrong to convey confidence in this country and our economy through our words and actions, and what I know is today’s announcement will give people and businesses up and down our country immense comfort over what will be a difficult winter.”

Responding to the statement, Shadow chancellor Anneliese Dodds said the Chancellor is “always a step behind”.

Ms Dodds told MPs: “Businesses and workers have been pleading for certainty from this Government, but the Chancellor keeps ignoring them until the last possible moment after jobs have been lost and businesses have gone bust.”

She added: “Now when the lockdown was announced, the Prime Minister said furlough would be extended for a month – five hours before that scheme was due to end. “Two days later, realising the self-employed had been forgotten, there was a last-minute change to the self-employed scheme. And now, further changes.

“The Chancellor’s fourth version of his winter economy plan in just six weeks. 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.”

With additional reporting by PA

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