The multi-billion-pound government scheme to try to protect millions of UK jobs has been extended by a month.
The Coronavirus Job Retention Scheme pays businesses grants covering up to 80% of any employee’s wage (with a £2,500 limit) if they keep hold of staff during the lockdown.
It was originally open for three months and backdated to 1 March, but after social distancing measures were extended for another three weeks Chancellor Rishi Sunak said the scheme would run until the end of June.
Mr Sunak said: “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, it is the right decision to extend the furlough scheme for a month to the end of June to provide clarity.
“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.”
The programme has already seen massive take-up, with British Airways recently announcing that it would use it to subsidise the income of more than 30,000 employees.
Sky News reported earlier this week that ministers were under pressure to extend the scheme amid warnings that employers were on the brink of making massive permanent layoffs.
Figures published recently by the British Chambers of Commerce and the Resolution Foundation think tank suggested that as many as 10 million people would be placed on furlough.
Mr Sunak previously said he would view large-scale take-up as “a success” – with the initial three-month cost forecast to be as high as £40bn.
But there have been concerns over how long it is taking for some firms – who urgently need to pay wages – to access the money.
The Confederation of British Industry said on Thursday: “It’s vital that the Job Retention Scheme starts delivering cash to struggling companies next week, as HMRC is working hard to achieve.”
The Treasury said decisions on the future of the scheme after June would take into account “wider measures to reduce the spread of coronavirus” as well as responsible management of public finances.