Chancellor of the Exchequer Rishi Sunak has extended the Government’s Coronavirus Job Retention Scheme (CJRS) to the end of March.
In a speech delivered in the House of Commons this lunchtime (November 5), Sunak said that the further extension – following an initial one-month extension to December 2 – was needed because of the ongoing economic impact of the pandemic.
The news follows Saturday's address by Prime Minister Boris Johnson, which revealed England's 'Lockdown 2' measures would result in the month-long closure of car showrooms and other retail and hositaility venues from today.
Taking to Twitter to address a wider audience following his speech, Sunak confirmed: “To give people across the UK certainty over the winter, I can announce today that the furlough scheme will not be extended for one month – it will be extended until the end of March.
“Employees will receive 80% of their usual salary for hours not worked, up to £2,500 a month."
There are currently no employer contribution to wages for hours not worked.
Employers will only be asked to cover National Insurance and employer pension contributions for hours not worked.
Government said that, for an average claim, this accounts for just 5% of total employment costs or £70 per employee per month.
The CJRS extension will be reviewed in January to examine whether the economic circumstances are improving enough for employers to be asked to increase contributions.
To date, the UK Government said that its total COVID-19 impact mitigation measures have now resulted in support worth £200bn.
On top of this, the government has announced:
- Cash grants of up to £3,000 per month for businesses which are closed worth more than £1 billion every month.
- £1.1bn to Local Authorities, distributed on the basis of £20 per head, for one-off payments to enable them to support businesses more broadly.
- Plans to extend existing government-backed loan schemes and the Future Fund to the end of January, and an ability to top-up Bounce Back Loans.
- An extension to the mortgage payment holiday for homeowners.
- Up to £500m of funding for councils to support the local public health response.
Support for the self-employed has also been extended as part of today's changes.
“We're increasing the support to the self-employed from 40% of trading profits to 80% for November.
“SEISS is calculated over 3 months so this increases the total grant from 40% to 55% of trading profits for November to January and the max grant increases to £5,160.
“Grants will also be paid faster than previously planned with the claims window opening at the end of November rather than the middle of December.”
Sunak said that the increase in fiscal assistance for the self-employed would deliver £4.5bn of support between November and January.