Sunak told to extend furlough or risk mass unemployment

By James McAllister

- Last updated on GMT

Chancellor Rishi Sunak told to extend furlough or risk mass unemployment

Related tags: Furlough, Job Retention Scheme, Coronavirus, Government, Trade union

The Chancellor has been warned by both leading business groups and the trade union movement that Britain faces a period of mass unemployment if furlough isn't extended.

As reported by The Guardian​, groups including the TUC have told Rishi Sunak that the economy is too fragile to end the Government’s Job Retention  Scheme (JRS) at the end of April.

It has previously been reported that the Chancellor is understood to be weighing up another extension of the scheme​, but no announcement is expected until the March Budget.

France O’Grady, the TUC general secretary, said Sunak should not wait until the Budget, but should announce immediately that furlough would remain in place until the end of the year.

“It would be a dereliction of duty of any government [not to extend furlough]," she said.

“The Government must understand we need to work our way back to growth, and for that we need people in jobs. Otherwise we are going to end up with real, deep economic and social problems.”

The JRS was originally introduced at the onset of the pandemic.

In its current form the scheme pays 80% of employee wages up to £2,500 a month, although employers are required to cover the costs of pension and National Insurance contributions.

Adam Marshall, director general of the British Chambers of Commerce, called for a furlough extension from April to July and said the Chancellor should not be fooled into thinking that the planned phased relaxation of lockdown restrictions meant the problems of business were at an end.

“What one can’t do is say that once the vaccine rollout has happened, everything will be OK," he said.

"That is not the case. You’ve got businesses in deep trouble, and still the possibility of flare ups in the virus. It’s not a case of just vaccinate and forget about it.”

Pressure has been growing on the Chancellor to not wait until the Budget to announce further financial support measures for businesses grappling with the uncertainty caused by the ongoing nationwide lockdown.

Both UKHospitality and the British Beer & Pub Association have made repeated calls for the Chancellor to step in and confirm what additional support will be put in to help the sector through the coming months. 

Last month the Confederation of British Industry (CBI) called on the Government to announce extensions to business support measures sooner rather than later​, in order to ensure the survival of firms until the economy reopens.

In a letter to the Chancellor, CBI director-general Tony Danker called for the furlough scheme, business rates holiday and deferral of VAT to be extended until at least the summer.

He added that the announcement of such extensions will be needed ahead of the Budget to help protect UK companies through the Spring.

Related topics: Business & Legislation

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