What Rishi Sunak has said about extending furlough scheme as coronavirus cases soar

Fears have been raised over ending the furlough scheme as coronavirus cases soar in the UK.

Friday, 11th September 2020, 7:29 am

The scheme is due to end next month having been wound down in September, after it was set up in mid-March at the height of the pandemic.

Around 9.6 million jobs have been supported by the furlough scheme since it was set up to protect workers during the Covid-19 lockdown.

But Mr Sunak has previously insisted the scheme will not be extended, instead putting faith in his job retention bonus offering firms £1,000 per furloughed worker brought back.

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Chancellor Rishi Sunak speaking during a media briefing - Andrew Parsons/10 Downing Street/Crown Copyright/PA Wire

The Treasury Select Committee said Rishi Sunak risks mass long-term unemployment and putting hard-hit viable firms out of business if the worker support scheme comes to an abrupt end on October 31.

In the second report of its inquiry into the economic impact of coronavirus, the cross-party committee of MPs also recommended further action to boost consumer spending after last month’s popular Eat Out to Help Out scheme.

It comes amid growing calls for an extension to the furlough scheme as fears mount over a jobs bloodbath after the Halloween deadline.

Chairman of the committee Mel Stride said: “The Chancellor should carefully consider targeted extensions to the Coronavirus Job Retention Scheme and explain his conclusions.

“The key will be assisting those businesses who, with additional support, can come through the crisis as sustainable enterprises, rather than focusing on those that will unfortunately just not be viable in the changed post-crisis economy.

“This requires a very difficult set of judgements; it is where careful analysis and creative thinking will be critical.”

It claimed the support will be used for a significant number of employees who would have been kept on anyway.

The committee also pressed for another move to help encourage consumer spending, cautioning the VAT cut on hospitality and leisure “may not be enough”.

In the report entitled The Challenges of Recovery, it warned: “Continued consumer caution around re-engaging with the economy, the prospect of more localised outbreaks and a second wave are dampening a full recovery to pre-pandemic levels of consumer spending, with some level of economic scarring almost certain.”

Chancellor Rishi Sunak has previously been asked if he was “completely ruling out” extending the furlough scheme.

He said: “This has been one of the most difficult decisions I’ve had to make. But if you look at it from start to finish of the furlough scheme, the Government will have been stepping in to pay people’s wages for eight months.

“I think most reasonable people will say ‘gosh, that’s not something that can carry on forever’. In common with almost all countries around the world … their versions of this are slowly being wound down toward the end of the year.”

Asked if the furlough scheme would be extended if a second wave hit and resulted in another national lockdown, Mr Sunak said: “I don’t think it’s helpful to sit here and speculate on every potential situation that might arise.

“It’s not something that we want to see happen and we’re doing everything we can … to stop that from happening.”