Furlough scheme extended until end of September
The scheme was due to expire at the end of April, but calls grew for it to be further extended to help protect jobs.
Chancellor Rishi Sunak said the Coronavirus Job Retention Scheme (JRS) will be extended until the end of September in his Budget.
The JRS will continue in its current form, paying 80% of employee wages up to £2,500 a month, with employers covering the costs of pension and National Insurance contributions, until the end of June.
In July, employers will be expected to pay 10% towards the hours their staff do not work, increasing to 20% in August and September. Additional support will also be announced for self-employed workers, with more than 600,000 people becoming eligible for cash grants.
The scheme was due to expire at the end of April, but calls grew for it to be further extended to help protect jobs as restrictions are set to be gradually lifted in the months ahead.
Trade body UKHospitality welcomed the decision to extend the scheme, but had reservations about the Government's decision to continue demanding employers cover the costs for NI and pension contributions.
“Extending the full scheme up to and beyond the point of full reopening of the sector is a welcome move," says UKHospitality chief executive Kate Nicholls.
"It will help keep businesses afloat and more jobs secure as they trade their way back to prosperity in the years to come. This means it is more important than ever that the Government sticks to its plan to allow full reopening of venues on the 21 June.”
“Expecting businesses to contribute to the scheme from the end of July is a worry, though. It will place unnecessary pressure on fragile businesses just as they are beginning to get back to their feet,” she added.
"It is also very disappointing not to have employer National Insurance contributions removed from the scheme. Businesses are burning through their cash reserves and many will have exhausted them before they have a chance to reopen. Not all businesses are going to be out of the traps instantly. It will take time for them to reopen and they will be racking up costs in the meantime."
