UK's Covid furlough scheme extended until autumn

UK Chancellor Rishi Sunak is set to use Wednesday's budget announcement to increase the government furlough scheme until September.

The scheme has been in place since March 2020 and has seen the government effectively covering 80% of someone's wages up to a maximum of £2,500 (€2,888) and have protected 11 million jobs so far and cost around £50 billion (€57.7 billion).

Read more: UK economy sees biggest drop in 300 years

The scheme has already been extended twice and is set to last until at least the end of September when Sunak hopes Britain's economy can start returning to normal.

The chancellor has promised to offer "full fiscal firepower" at the Treasury's expense and is set to finally extend the furlough to help self-employed people.

This is to be followed by a £20-a-week increase to Universal Credit which is expected to run until September.

He is set to unleash a three-point plan to support people through the coming months, rebuild the economy and help recover in the wake of the crisis.

From July 1, the government will offer up to 80% of wages, but employers will be asked to help out. They are set to initially pay 10% of the wages, increasing to 20% by August.

For self-employed people, the furlough scheme will cover 80% of three months' trading value, up to £7,500.

Sunak hopes to keep unemployment levels below the 7.5% peak forecast back in November.

The move has been criticised by the Labour Party, who said the extension should have been announced months earlier, which may have resulted in business owners living with a degree of uncertainty over wages and revenue.

Read more: UK jobs down 43% owing to the coronavirus, report finds

In a statement made on Tuesday evening, Sunak said: “Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK.

“There’s now a light at the end of the tunnel with a roadmap for reopening, so it’s only right that we continue to help business and individuals through the challenging months ahead and beyond.”

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