Furlough support extended until March

Hospitality workers can breathe a sigh of relief as the Chancellor of the Exchequer Rishi Sunak gave a speech to the Commons today, announcing that the furlough scheme will be extended until the end of March. 

Succumbing to pressure from the hospitality sector, ministers and local authorities in locations where restrictions have been in place for weeks or months prior to the lockdown, 80% of a employee's salary will be covered up to £2,500.

In his announcement, Rishi Sunak said: "On Monday the Prime Minister set out the action we need to take between now and the start of December to control the spread of coronavirus." 

"In response, we're providing significant extra support to protect jobs and livelihoods in every region and nation of the United Kingdom," naming the furlough scheme, extended support for self-employed workers, cash grants for businesses and extra funding for local councils, the extension of government-backed loans and bounce-back loan top-ups and an extension of the mortgage payment holiday, "all on top of more than £200 billion of fiscal support since March."

He added: "Our highest priority remains the same, to protect jobs and livelihoods. 

Citing predictions from the IMF and the Bank of England that the UK's economic recovery is likely to be hit even harder than expected due to the amplitude of the second wave of coronavirus, he said: "Given this significant uncertainty and the worsening economic backdrop, we need to give people and businesses security through the winter. I believe it is right to go further." 

The government will continue to pay people's wages up to 80% of the normal amount, he said, and will review the UK's economic situation in January to decide whether or not to ask firms to contribute to the scheme. 

"I also want to reassure the people of Scotland, Wales and Northern Ireland," he said, as the furlough scheme was delivered by the UK government which will, he said, continue to do so. 

Under the government’s tiered approach, workers in areas subject to the most stringent measures are entitled to receive 67 per cent of their normal salary, up to a maximum of £2,100 per month.

The extension applies to all devolved nations, where governance on healthcare is independent. While England has today entered a national lockdown, Wales is reaching the end of a 17-day firebreak, Scotland recently introduced a 5-tier alert system, and Northern Ireland is three weeks into a four-week partial lockdown. 

It will go some lengths to attenuate tensions that have built up between Whitehall and Northern MPs, who have raised concerns that a return to a tiered system could see their constituencies remain under strict restrictions, leading to more hardship should there be no further financial support. 

Recent negotiations on support for Greater Manchester fell through when the minimum threshold  requested by Mayor Andy Burnham was turned down. 

Under this month's scheme, it is expected that the number of furloughed workers in the UK will more than double to almost 5.5 million people. Altogether, approximately 9.6 million people have benefited from the scheme at one time or another.