As England entered a second lockdown, the Chancellor Rishi Sunak again appeared in the House of Commons to announce he would be extending the furlough scheme until March 2021 – which is well after the current lockdown is due to end at the start of December. He told the Commons that the government will review the policy in January.
The scheme will pay up to 80% of a worker’s wages up to a maximum of £2,500 a month. Employers will be asked to cover National Insurance and employer pension contributions for hours not worked.
He also announced the government would be increasing support for millions more workers through the Self-Employment Income Support Scheme. The third grant, which will cover November to January will now be calculated at 80% of average trading profits, up to a maximum of £7,500. A further grant will follow to cover February to April.
About £40 billion has been spent on the furlough scheme since it was first introduced in March. Today Mr Sunak said he wanted to “give businesses security through the winter” and protect millions of jobs.
The latest announcement comes after it was confirmed that England was to go into full lockdown at the weekend. Following criticism from politicians in Wales and Scotland Mr Sunak stressed the scheme would apply throughout the UK, saying the country had “a Treasury for the whole of the United Kingdom”.
It’s a huge announcement and the fourth by the Treasury in just six weeks. Mr Sunak acknowledged that the public will be frustrated by the changes the government has made in the past few weeks but said he was having to react to rapidly changing conditions. Things are changing quickly but at IAB we are endeavouring to keep you up to date with the changes as and when they happen so you, in turn, can keep your clients informed and offer them the best advice.