UK Chancellor Rishi Sunak on Friday announced an extension to the government's Coronavirus Job Retention Scheme by a month until June following a further three-week extension to the COVID-19 lockdown in the UK.
The Indian-origin finance minister said that the unprecedented furlough scheme he had unveiled in March to keep millions of people in jobs on a forced leave basis while the government covers a large of their salaries has been extended to provide UK businesses with the certainty they need.
We've taken unprecedented action to support jobs and businesses through this period of uncertainty, including the UK-wide Job Retention Scheme. With the extension of the coronavirus lockdown measures yesterday [Thursday], it is the right decision to extend the furlough scheme for a month to the end of June to provide clarity, said Sunak.
It is vital for people's livelihoods that the UK economy gets up and running again when it is safe to do so, and I will continue to review the scheme so it is supporting our recovery, he said.
The scheme, which allows firms to furlough employees with the government paying cash grants of 80 per cent of their wages up to a maximum of 2,500 pounds, was originally open for three months and backdated from the 1 March to the end of May. However, the Chancellor said he would keep the scheme under review and extend it if necessary.
This week the UK's Office for Budgetary Responsibility (OBR), the independent spending watchdog, said the scheme is limiting the impact of the pandemic and related lockdown on employment.
Thousands of businesses up and down the country furloughing their staff, which would help them retain them on their books for when the economy gets back on track after the social distancing measures to curb the spread of the deadly virus are lifted over time.
The UK's Treasury department said future decisions on the scheme will take into account further developments on the wider measures to reduce the spread of coronavirus, as well as the responsible management of the public finances.