Rishi Sunak set to block furlough extension despite delay to lockdown easing

Government set to push ahead with cut to support while extending forced closures of businesses

Jon Stone
Policy Correspondent
Monday 14 June 2021 11:12
<p>Chancellor Rishi Sunak holds the purse strings</p>

Chancellor Rishi Sunak holds the purse strings

Rishi Sunak will not extend the furlough scheme despite a likely delay to the lifting of the last lockdown regulations, it has been reported.

The temporary social security scheme is set to begin phasing out from July 1 and end on September 30 – only partially covering the expected new longer unlocking.

Boris Johnson this evening is expected to confirm on Monday evening that the last restrictions will be extended for another four weeks into late July.

But despite the planned delay the Chancellor is not expected to extend the scheme to cover the longer lockdown - which seems some businesses remain shut by government order.

Business groups including the British Chamber of Commerce have reportedly urged the chancellor Mr Sunak to extend the support to prevent job losses in sectors like hospitality. The Treasury has not denied the claims.

Asked about furlough on Monday morning ahead of the announcement, Health minister Edward Argar told Sky News: "I know that when he addresses his decision, sets out what he intends to do around the easing on the 21st, he will address those points as well.

"I think he is very mindful of the need for businesses and others to get the support they need if they continue to be locked down or unable to open.

"But I don't want to pre-empt what he will say, but I know he is very sensitive to those factors."

Mr Argar said that delaying the June 21 lockdown easing for one month would allow another 10 million second coronavirus vaccine doses to be delivered.

"Were there to be a delay, were that to be what the Prime Minister announces, we will see what he says and he will make a judgment if he were to delay it on how long by," he told BBC Breakfast.

"If we are going at a run rate of about 250,000 to 300,000 second jabs being done each day, a month gives you roughly that 10 million, which closes the gap... 10 million you have got to do to get from 29 million to 40 million, so that all 40 million have had their second jabs."

The government currently pays 80 per cent of wages up to £2,500. Month for people on the Coronavirus Job Retention Scheme, colloquially known as furlough.

But from July those contributions will fall to 70 per cent, up to £2,187.50, with employers having to pick up a further 10 per cent or let the employee go.

In August and September the government will further cut its support to 60 per cent up to £1,875 and employers will be asked to up their contributions to 20 per cent. After September the scheme is planned to end altogether.

Kate Nicholls, chief executive of trade body UKHospitality said: "We recognise that the Chancellor has provided long-term support for the sector which extends into the recovery period, but there is no doubt that any extension to the restrictions will be challenging for sectors yet to open and those still trading at a loss to navigate.

"Businesses need a swift, publicly-stated commitment that such support will be in place in the event of any delays, giving them much-needed reassurance after more than 15 months of closure and severely disrupted trading.

"Hospitality is desperate to get back to what it does best and can play a key role in the economic recovery of the UK – but only if it is given the proper support."

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