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Just a month after unveiling a new emergency furlough scheme, Chancellor of the Exchequer Rishi Sunak has announced a revised plan will be extended through the end of March.
The furlough scheme will reportedly pay up to 80% of an employee’s wages, up to £2,500 a month. The government plans to revisit the policy in January.
“The security we are providing will protect millions of jobs,” Sunak told the BBC.
Furlough Scheme Revised and Extended
The emergency furlough scheme announced in October was widely criticised after it became clear the plan was only projected to save 230,000 jobs. The Institute for Public Policy Research (IPPR) predicted only 1 in 10 employees would benefit.
The revised furlough scheme, or Job Retention Scheme, will reportedly subsidise wages for those unable to work because their place of business is closed or because there’s not enough work for them to do. Anyone who was made redundant after 23 Sept. is eligible to be rehired and furloughed.
Business groups expressed approval for Sunak’s revised furlough scheme.
The Federation of Small Businesses reportedly called it the “right move.”
UKHospitality also welcomed the new furlough scheme, but said broader support would still be needed.
“Extending the furlough scheme is a big boost and will help secure hospitality jobs in the medium term across the whole of the U.K.,” UKHospitality CEO Kate Nicholls said in a release.
“Hospitality is facing a tough winter ahead, though, and businesses will need additional support if they are to survive,” she added. “We will need enhanced grant support to keep venues alive and a solution to the ongoing rent debt problem that continues to linger over the sector. These must come alongside a clear roadmap for a return to business. Without these, the extended furlough scheme alone is not enough to keep hospitality alive and will have been a wasted investment of public funds.
Scottish Chambers of Commerce chief executive Dr. Liz Cameron told the BBC Scottish businesses now have “a glimmer of hope that we may be able to survive and work through this crisis.”
However, she added, there also needs to be an effort to reopen the economy as the furlough scheme alone won’t be able to save all businesses.
The furlough scheme will apply throughout the U.K.
Additional Economic Support Announced
In addition to the revised furlough scheme, Sunak also reportedly announced other plans for economic support.
The government is increasing the Self-Employment Income Support Scheme (SEISS); the third grant will cover the November-to-January period at 80% of average trading profits, up to £7,500 maximum, according to the BBC.
Guaranteed funding for developed administrations in the U.K. is also being increased, to £16 billion from £14 billion.
However, many will still be ineligible for assistance, including those who are newly self-employed, freelancers and others.
Furlough Scheme “Doesn’t Go Far Enough”
While the business sector largely welcomed the revised furlough scheme, some said it doesn’t go far enough; government representatives also weren’t all impressed with the process.
Shadow chancellor Anneliese Dodds reportedly accused Sunak of ignoring objections to the measures “until the last possible moment.”
The Scottish National Party’s Treasury spokesperson at Westminster, Alison Thewliss, said the move was long overdue, but also complained about how long it took.
Northern Ireland Finance Minister Conor Murphy welcomed the new support, but reportedly called it “regrettable” that repeated calls for the furlough scheme to be extended “had not been answered sooner.”
Paul Johnson, director of the Institute for Fiscal Studies think tank, told the BBC the scheme sounded as if it had been “dreamt up on the hoof.”
“Wasteful & badly targeted for self-employed,” Johnson tweeted. “No effort at targeting sectors/viable jobs for employees. Big contrast to position just days ago.”
Heathrow airport chief executive John Holland-Kaye expressed a similar sentiment.
“Whilst we welcome the extension of the furlough scheme, we are clear that it doesn’t go far enough for an aviation sector that has been on its knees since March,” Holland-Kaye reportedly said.
The furlough scheme, originally announced in March, has benefited millions of U.K. citizens.
About 9.6 million people have reportedly been able to take advantage of it at some point during the coronavirus pandemic.
But the furlough scheme’s administrator, HM Revenue and Customs, has reportedly suggested a substantial amount of money — up to 10% of the money delivered through mid-August, or about £3.5 billion — has been paid out either fraudulently or in error.
HM Revenue and Customs says it’s unclear whether the scheme has saved viable jobs or simply delayed the loss of those that are nonviable.
Do you think the furlough scheme extension will help those struggling due to the coronavirus pandemic? Tell us what you think in the comment section below!
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