Furlough extension: Is furlough being extended?


The Prime Minister and Chancellor have been urged to act before the end of the scheme in October following warnings that a sudden withdrawal of the scheme could leave millions in dire financial situations. The Jobs Retention Scheme has been a lifeline for millions who were struck with uncertain employment at the onset of the coronavirus crisis.

While the economy has now opened back up, many have returned to work – but a large chunk are still on the wage subsidy scheme.

During Prime Minister’s Questions on Wednesday, Boris Johnson was urged to act urgently by Labour and SNP MPs to prevent what one MP described as a “tsunami of job losses”.

And on Wednesday night, Labour leader Sir Keir Starmer warned of a “wave of job losses this winter” if the Government does not ensure economic support for those still relying on the scheme.

Some sectors, such as performing arts, nightclubs, and other hospitality venues, have been unable to reopen due to ongoing Government restrictions.

Is furlough being extended?

The Jobs Retention Scheme, launched by the Chancellor at the start of the pandemic, is not going to continue in its current form.

The current shape of the ‘Winter Economy Plan’, announced on Twitter last night, is yet to be revealed with Mr Sunak unveiling his plans later today.

He tweeted last night: “As our response to coronavirus adapts, tomorrow afternoon I will update the House of Commons on our plans to continue protecting jobs through the winter.”

The Confederation of British Industry has recommended a wage top up scheme for those workers who can still work 50 percent of their hours.

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The employer would have to pay the actual hours worked in full, the employee would be paid for two-thirds of the lost hours on top of that, with the cost shared between the Government and the employer.

According to a recent Office for National Statistics survey, around a 10th of employees in the UK were still on furlough at the start of September – around 2.2 million people.

When the scheme ends at the end of October, these employees would either have to pay these wages in full or cut jobs.

As it currently stands, the length any new scheme has not been made clear, but as the economic effects of COVID-19 could be felt for another generation, the help is unlikely to run just for the short term.

The Chancellor is also expected to announce extra measures alongside job protection measures.

He is expected to reveal a VAT cut and a slew of cheap loans that could help boost the economy.

Loan schemes are expected to be aimed at businesses with increased repayment terms and low interest.





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