Rishi Sunak extends UK’s furlough and loan schemes for COVID-hit economy

The furlough scheme launched in Britain to save jobs during the coronavirus lockdown has been extended for an extra month until the end of April 2021, with the government continuing to contribute 80 percent towards wages, Chancellor of the Exchequer Rishi Sunak announced on Thursday.

The finance minister, who has been leading the country's economic response to the pandemic, also confirmed that he would be extending the government-guaranteed COVID-19 business loan schemes until the end of March, from the current deadline of January, with a Budget set to be tabled on March 3, 2021.

A Budget had been expected a few months ago, but this was scrapped due to the uncertainties mounting due to the continuing cycle of lockdowns.

"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," said Sunak.

We know the premium businesses place on certainty, so it is right that we enable businesses to plan ahead regardless of the path the virus takes, which is why we’re providing certainty and clarity by extending this support, as well as implementing our Plan for Jobs, he said.

The minister said his Budget next year will deliver the next phase of the plan to tackle the virus and protect jobs and that the Coronavirus Job Retention Scheme (CJRS) scheme, or furlough, has so far protected 9.6 million jobs across the UK, with more than 1 million businesses accessing loans to help them through the crisis.

"While our loan schemes have provided a vital lifeline to millions of firms across the country, we know that business owners need additional certainty as we head into the New Year," said UK Business Secretary Alok Sharma.

Extending government-backed loan schemes will give companies right across the UK the finance they need to support, protect, and create jobs as we build back better from the pandemic, he said.

As part of the plans in place, the government will continue to pay 80 percent of the salary of employees for hours not worked until the end of April. Employers will only be required to pay wages, National Insurance Contributions (NICS) and pensions for hours worked; and NICS and pensions for hours not worked.

Businesses will also be given until the end of March to access the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme. These had been due to close at the end of January.

The UK’s Treasury Department said the schemes have already provided over 68 billion pounds in guaranteed loans and helped to keep afloat business in all sectors of the UK economy that have been impacted by a coronavirus.

“We are extending the schemes now, ahead of Christmas and further into the New Year, to ensure that businesses can continue to access the support they need to grow and recover,” the Treasury said.

It has previously announced that more support will be available beyond March, through a successor loan scheme. 

(IMAGE CREDITS:AP)