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furloughs (1)

Gold Level Contributor

Image: Getty Images

Chancellor Rishi Sunak has extended the furlough scheme for one month until the end of April next year.

He said the move would provide "certainty for millions of jobs and businesses".

It means the government will continue to pay up to 80% of the wages of workers who have been furloughed.

Mr Sunak also confirmed he would be extending the government-guaranteed Covid-19 business loan schemes until the end of March.

These changes come in the run-up to the next Budget, which the chancellor confirmed would take place on 3 March 2021.

The roll-out of vaccinations has provided hope for businesses struggling to get through a winter of stop-start measures to control the virus. But it is likely to be several months before enough of the population has been covered to allow for anything like business as usual.

"Our package of support for businesses and workers continues to be one of the most generous and effective in the world - helping our economy to recover and protecting livelihoods across the country," Mr Sunak said.

"We know the premium businesses place on certainty, so it is right that we enable them to plan ahead regardless of the path the virus takes, which is why we're providing certainty and clarity by extending this support."

The move drew criticism from the opposition. Shadow chancellor Anneliese Dodds said Mr Sunak had "waited until the last possible minute to act, leaving businesses in the dark with less than 24 hours before they have to issue redundancy notices".

She added: "Rishi Sunak's irresponsible, last-minute decision-making has left the UK with the worst recession of any major economy."

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But CBI chief economist Rain Newton-Smith said the package would "bring some much-needed certainty and respite" for businesses.

"Stable employer contributions and an extension to the Job Retention Scheme until the end of April will mean the scheme continues to protect people's livelihoods," she added.

"And with cashflow difficulties still at the forefront of the minds of many business owners, continued access to government-backed loans through to spring will bring great comfort."

Criteria unchanged

The government will continue to pay up to 80% of the salary of employees for hours not worked until the end of April, with a cap of £2,500 a month.

Employers will only be required to pay the wages, National Insurance (NI) contributions and pensions for hours worked, as well as NI contributions and pensions for hours not worked.

The eligibility criteria for the UK-wide scheme will remain unchanged and these changes will continue to apply to all devolved administrations, the government said.

Originally published by
BBC News | December 17, 2020

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