Furlough extended to the end of March and 80% for self-employed for three months
The Government has now extended the Furlough to the end of March next year and increased support to the self-employed. The changes were announced by Chancellor Rishi Sunak today (5 November).
The Furlough scheme and help for the self-employed had already been extended earlier in the week to cover the November lockdown.
“But,” Rishi Sunak said today, “the government is now going further so that support can be put in place for long enough to help businesses recover and get back on their feet – as well as giving them the certainty they need in coming months.
“Evidence from the first lockdown showed that the economic effects are much longer lasting for businesses than the duration of restrictions.”
The announcement comes along with a further round of quantitative easing from the Bank of England, this time of £130billion, bringing the total to £875billion since 2009. That is in addition to government debt that is now more than 100% of annual GDP at just over £2trillion.
The extended Coronavirus Job Retention Scheme (CJRS – the Furlough) will give employees 80% of their current salary (up to £2,500 a month) for hours not worked until the end of March. It will continue to allow furloughed staff to work part-time. As before, employers will have to cover National Insurance and employer pension contributions only for hours not worked by their employees.
The Self-Employment Income Support Scheme (SEISS), which had already been doubled to 80% for the November lockdown, is now giving 80% of profits for the whole of the three-month period of November to January (to a maximum of £7,500, up from the £5,160 maximum previously available).
The Chancellor said: ”I’ve always said I would do whatever it takes to protect jobs and livelihoods across the UK – and that has meant adapting our support as the path of the virus has changed.”
The £1,000 Jobs Retention Bonus (JRB) previously offered to businesses for keeping people employed in January will not now be paid, although the government says it will redeploy a retention incentive at an appropriate time. As the Furlough is being extended to the end of March, the point of the JRB in January no longer exists.
Additional support for devolved administrations
In July, the government announced an upfront guarantee of resource funding for the devolved administrations. Today, the government says it will continue to provide that upfront certainty with an extra £2billion.
That means a total of at least £8.2billion of funding for the Scottish Government, £5billion for Wales and £2.8billion for Northern Ireland.