Coronavirus

Chancellor considers adding furlough extension to March budget

The exact level of support reportedly depends on how the situation with the virus develops over the next six weeks

Chancellor Rishi Sunak is reportedly considering another extension to the government’s Job retention Scheme (JRS) as it continues to try and mitigate the impact of covid-19 on the UK economy.

According to Bloomberg, Sunak is considering a fifth extension to the furlough scheme that will cover roughly 5 million workers in the UK.

The scheme, which sees 80% of workers’ salaries covered by a combination of their employer and the government has already been extended until the end of April.

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According to sources cited by Bloomberg, Sunak is considering extending the scheme until the summer, with the exact level of support depending on how the situation with the virus develops over the next six weeks.

In December, the furlough scheme was extended until the end of April 2021 with the government continuing to contribute 80% towards wages to employee’s pay.

The government also extended current government-guaranteed Covid-19 business loan schemes until the end of March.

This included the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme, which had initially been due to expire at the end of January.

The furlough scheme was first introduced in March 2020 in a bid to reduce permanent redundancies caused by the coronavirus. It was originally set to end in November, but the chancellor later made the decision to extend the support amid the second lockdown this winter.

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