Chancellor Rishi Sunak has set a budget date barely two months into the new year and extended the government’s support packages for employees and firms hit by the coronavirus pandemic by a further month.
In a move that clearly anticipates prolonged uncertainty for the UK economy, potentially because of a post-Christmas third wave of Covid-19 and the impact of the end of the EU transition period, Sunak said the extensions would give businesses greater certainty to plan ahead.
The furlough scheme – or the Coronavirus Job Retention Scheme, to give it its full title – will now run until the end of April 2021, as will the Self Employed Support Scheme. Businesses will also have 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. Those schemes had been due to close at the end of January.
Sunak said the Budget would take place on 3 March and set out the next phase of the government’s strategy to tackle the virus and protect jobs.
“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,” he said.
“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.”
HM Treasury said that extending the furlough scheme until the end of April would allow businesses currently making use of it to digest proposals to be set out in the budget before making decisions on their future staffing needs.
It said the timing meant firms would know about the next phase of job-support to replace the furlough scheme “well ahead” of the 45-day redundancy notice period they are required to give workers being laid off.