Chancellor Rishi Sunak announced the move in the House of Commons earlier today.
With a second lockdown now in effect and thousands of people expected to be out of work in the coming weeks, Chancellor Rishi Sunak has confirmed that the government’s furlough scheme will now be extended until March 2021. The scheme, which had run successfully through the first lockdown and was recently extended through November, protects employees from job losses by allowing the government to step in and pay 80% of a person’s wages, up to £2500 per month.
The furlough scheme has been a welcome lifeline for companies and workers alike, so its continuation is likely to ease some of the financial burdens on the nation’s workforce during the second wave. Critics of the government had pleaded with Sunak and Prime Minister Boris Johnson to prolong the furlough scheme beyond the previously-announced one month extension, and today the government acquiesced. Announcing the extension, Sunak declared that it would “protect millions of jobs”, and noted that he had had to make swift adjustments to UK economic policy in the face of the new lockdown, which came into effect early this morning.
Employers will still need to pay National Insurance and pension contributions to their workers, but until March, the government will be footing the bill for the wages of any employees on furlough. The scheme will remain unchanged until January, when Sunak vowed to review the process and financial landscape in order to decide whether to ask employers to contribute more. He also revealed a new income support for freelancers: from November to January, the government will cover up to 80% of average profits, to a maximum of £7500 a month. It’s estimated that almost 10 million people have benefitted from the furlough scheme this year, and that number is only likely to grow as the November lockdown begins.