Coronavirus UK: Rishi Sunak extends ‘furlough’ scheme to June

The Government’s coronavirus furlough scheme has been extended by another month in the wake of the lockdown decision, it was announced today.

Chancellor Rishi Sunak said the scheme will now run until the end of June, rather than stopping at the end of May as originally planned.

Mr Sunak said the ‘unprecedented action’ would stay in place in light of the continued social distancing measures, which have been wreaking havoc on the economy.

The scheme, which allows firms to furlough employees with the government paying cash grants of 80 per cent of their wages up to a maximum of £2,500 a month, was originally open for three months and backdated from March 1 to the end of May.

Mr Sunak, said: ‘We’ve taken unprecedented action to support jobs and businesses through this period of uncertainty, including the UK-wide Job Retention Scheme. 

‘With the extension of the coronavirus lockdown measures yesterday, it is the right decision to extend the furlough scheme for a month to the end of June to provide clarity.

‘It is vital for people’s livelihoods that the UK economy gets up and running again when it is safe to do so, and I will continue to review the scheme so it is supporting our recovery.’

The government’s spending watchdog, the Office for Budget Responsibility, warned earlier this week that if the lockdown lasts three months, and then is partially lifted for three months, it is likely to wipe a third off of the nation’s GDP.

Unemployment is also set to rise by two million as the effort to combat the virus lays waste to vast swathes of UK plc.

There has been alarm in the Treasury at the scale of the take-up of the furlough scheme, which has been far higher than initially anticipated. 

Mr Sunak announced on Wednesday that the cut-off date for people to be eligible to benefit from furlough had been extended from February 28 to March 19. 

That extension should mean that more than 200,000 more employees could benefit than under the scheme as originally set out.

The aim of the furlough scheme is to maintain the link between employers and employees during the coronavirus crisis so that when lockdown is lifted businesses can get back up to speed quickly. 

Furloughed workers are not allowed to work for their employer but they can engage in training or work for someone else.    

British Chambers of Commerce director general Adam Marshall said businesses ‘will be pleased’ that the scheme has been extended to the end of June. 

‘This common sense move will provide many with the support they need to protect livelihoods as lockdown continues,’ he said.  

Concerns are growing that there is no ‘exit strategy’ from the lockdown, with claims Boris Johnson’s absence as he recovers from coronavirus has left a power vacuum in Downing Street.  

Transport Secretary Grant Shapps revealed earlier that medical and scientific advisers will not present their options to Cabinet for easing the social distancing measures for another fortnight.  

Labour leader Sir Keir Starmer accused Foreign Secretary Dominic Raab of being ‘reluctant’ to sign off a plan while Mr Johnson is still recuperating from his own infection at Chequers.  

Meanwhile, Nicola Sturgeon fuelled the row by insisting she is ‘treating the public like grown ups’ by unveiling her own ‘framework’ next week for how lockdown could be phased out.  

Mr Shapps told LBC radio: ‘We’ve said now that this three-week period will contain a review by the scientists at the end of this month, so that’s actually only two weeks away, whilst they’ll be reviewing this.

‘And I hope we’ll be in a position to provide, well I know we’ll be in a position to provide, greater clarity.’