Rishi Sunak plans to extend furlough scheme to OCTOBER in his Budget as he vows to do ‘whatever it takes’ to rescue the economy after a year of lockdown pain
- The furlough scheme will be extended to the end of September, Rishi Sunak said
- Sunak vowed to do ‘whatever it takes’ to help the economy recover from Covid
- Move takes scheme well beyond official target for ending lockdown on June 21
The furlough scheme that has cost Britain £53billion will be extended to the end of September as Rishi Sunak vows to do ‘whatever it takes’ to help the economy recover.
In today’s Budget, the Chancellor will extend the job protection scheme for an extra five months beyond the current deadline at the end of April.
The move takes the scheme, which has cost almost £5 billion a month, well beyond the official target for ending lockdown on June 21, and raises questions about whether ministers expect to lift all restrictions at that point.
Self-employed workers will also benefit from another round of support paying them 80 per cent of profits. In a surprise move, the scheme will be extended to cover 600,000 ‘excluded’ workers who did not qualify before because they did not begin trading until 2019.
The furlough scheme that has cost Britain £53billion will be extended to the end of September as Rishi Sunak vows to do ‘whatever it takes’ to help the economy recover. Pictured: Rishi Sunak calls The Queen on 2 March ahead of the budget
In today’s Budget, the Chancellor will extend the job protection scheme for an extra five months beyond the current deadline at the end of April
The Chancellor is also expected to extend the £20-a-month top-up to Universal Credit for another six months.
The current VAT cut for hospitality and tourism firms will also be extended, probably until the end of the summer. And a business rates holiday for hard-hit sectors will continue beyond the current deadline at the end of this month.
Mr Sunak is also launching a £100million taskforce to tackle furlough fraud, estimated to have cost up to £5billion.
The Queen last night spoke with Mr Sunak by phone instead of the traditional audience on the eve of the Budget. The Treasury shared a photograph of the chancellor during the call.
The Queen last night spoke with Mr Sunak by phone instead of the traditional audience on the eve of the Budget. The Treasury shared a photograph of the chancellor during the call
This is what Rishi Sunak will be dishing out
- The £53billion furlough job protection scheme extended from its current end point on April 30 to the end of September
- Corporation tax up from 19 per cent to 20, with a ‘pathway’ to raising it to 23 per cent. There may be an exemption for entrepreneurs
- Hospitality and tourism firms will benefit from an extension of the VAT cut – probably until the end of the summer
- Business rates holiday for the hardest hit sectors will continue beyond the current deadline at the end of this month
- No increase in the rate of income tax however thresholds are set to be frozen for three years, dragging 1.6million into higher rates
- Fuel duty is set to be frozen after Boris Johnson vetoed plans for an immediate 5p hike
- The stamp duty holiday – a tax break on purchases of homes worth less than £500,000 – set to be extended until the end of June
- An extra £410million for theatres and other arts venues. Cricket to benefit from £300million for sports
- Community groups to receive £150million to support local pubs and sports clubs
- A new £520million scheme to help small businesses grow and give them access to advice from the country’s top business schools
- New £100million taskforce to tackle furlough fraud, which is estimated at up to £5billion
The Chancellor said last night that support schemes, whose total cost is near £300billion, had been ‘a lifeline to millions’.
Today he will vow to use the state’s full ‘fiscal firepower’ to protect jobs and livelihoods.
‘We will continue doing whatever it takes to support the British people and businesses through this moment of crisis,’ he added.
Government sources indicated only last week that the furlough scheme and other support measures would carry on until at least the end of June.
Mr Sunak’s decision to push on until the end of September, three months after all restrictions are due to be lifted, will raise eyebrows.
Mr Sunak’s decision to push on until the end of September, three months after all restrictions are due to be lifted, will raise eyebrows
Treasury sources said the move was to avoid a ‘cut-off’ as some firms resume trading for the first time in more than a year .
‘They don’t want a cliff edge and we have listened,’ said a source. But the Treasury also acknowledged the extension would be a ‘cushion’ if reopening is delayed.
The cost of the scheme is due to be curbed after the economy is reopened.
Furloughed staff now get 80 per cent of pay from the state, up to £2,500 month, with employers paying only national insurance and pension contributions.
From July forms will also have to pay 10 per cent of wages as the state share shrinks to 70 per cent – and in August the figures will change again, to 20 per cent and 60 per cent respectively.
Almost five million people were furloughed at the end of January – double the number in October, but well below the peak of almost nine million last May.
Up to last week the scheme had cost £53.4billion. Business leaders welcomed the new support last night. Kate Nicholls of UK Hospitality called it ‘a very positive move.
And CBI chief economist Rain Newton-Smith said: ‘Extending the scheme will keep millions more in work and give businesses the chance to catch their breath as we carefully exit lockdown.’
Tories’ war of words on tax rises
Business Secretary Kwasi Kwarteng rejected calls for tax rises yesterday as a Tory debate raged over how to tackle the huge deficit caused by the pandemic.
Former party leader William Hague has backed Rishi Sunak to raise taxes in today’s Budget. He said the dire state of public finances meant ‘at least some business and personal taxes have to go up’.
Lord Hague said yesterday that those opposing tax rises harboured ‘dangerous illusions’ that low interest rates would let Britain borrow its way out of the crisis.
But in an intervention that underlines Cabinet tensions, Mr Kwarteng predicted ‘strong growth’ this year and said it was vital that the economic recovery was not ‘crushed’ by higher taxes. He said growing the economy will be the ‘best way to deal with the growing deficit’.
£410m lifeline for arts venues
Theatres, museums and live music venues will be handed a £410million lifeline to help them stay afloat until they are allowed to reopen. Pictured: Florence Nightingale Museum in London, which has announced it is closing for the ‘foreseeable future’
Theatres, museums and live music venues will be handed a £410million lifeline to help them stay afloat until they are allowed to reopen.
Rishi Sunak will unveil the move in today’s Budget alongside fresh support for sport and pubs, which have also suffered heavy restrictions during the lockdowns of the last year.
The move follows talks between the Chancellor and Culture Secretary Oliver Dowden, who last year secured a £1.57billion bailout for the industry. Most arts and cultural events, including theatres, museums and galleries, are expected to get the green light to reopen in May.
But many may be unable to reopen their doors until Step Four of the roadmap from June 21 when the Government hopes to lift all social distancing restrictions that limit the size of audiences.
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