Budget 2021: Furlough extended until September in Rishi Sunak's Budget

THE government's furlough scheme has been extended until the end of September in Chancellor Rishi Sunak's Budget today.

The Budget announcement means millions will have been paid to stay at home for 17 months by the end of the furlough scheme.

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The government will continue to pay furloughed workers' wages up to a maximum of £2,500 a month until the end of June.

Employers will then be required to meet 10 per cent of those wages in July and 20 per cent in August and September as the scheme winds down.

Mr Sunak told the Commons today: "The furlough scheme will be extended until the end of September, there will be no changes to the terms.

"As businesses reopen, we'll ask them to contribute alongside the taxpayer to the cost of paying their employees.

"Nothing will change until July, when we will ask for a small contribution of just 10% and 20% in August and September."

The Chancellor’s vow “to do whatever it takes” to protect jobs and support businesses will add £5billion a month to the pandemic’s £280billion support bill.

But he also warned today that the time to get the nation's books in order is rapidly approaching.

Mr Sunak is gambling on buying some time to allow the economic recovery to strengthen in order to weather the unemployment hit.

The Coronavirus Job Retention Scheme has protected more than 11million jobs since its creation last March, with Mr Sunak promising further help in the “challenging months ahead — and beyond”.

Employees taking part will continue to receive 80% of their salary — up to a maximum £2,500 a month — for hours not worked until the scheme ends.

Today’s Budget also extended the Universal Credit uplift of £20 for six months and business support measures such as five per cent VAT for pubs and restaurants.

The Chancellor also announced further support for the self-employed, with more than 600,000 people eligible for cash.

A fourth grant from the Self-Employment Income Support Scheme is available from April, worth 80 per cent of three months’ average trading profits up to £7,500.

In his speech to MPs, Mr Sunak promised to help struggling workers with the “full measure of our fiscal firepower” but warn that the time is approaching to “begin fixing the public finances”.

He vowed to use every means “to protect jobs and livelihoods”.


But Mr Sunak is staring at a £400billion black hole created by the Covid crisis.

He set out “a three-point plan to protect jobs” but also gave a reality check over the dire economic situation.

The Treasury said the Budget will focus on “support, honesty and building the future economy”.

Mr Sunak told MPs: “Once we are on the way to recovery, we will need to begin fixing the public finances — and I want to be honest today about our plans to do that.”

It is hoped some of the money will be clawed back through a hike in corporation tax on businesses and capital gains taxes on millionaire second property owners and investors.

Mr Sunak has also frozen the rates at which workers start to pay different levels of income tax, meaning more people will be caught in a higher band over the coming years.

Last week, The Sun revealed he had been warned the deficit needs reducing by around £30-40billion now to stabilise borrowing and prevent debt from rising as a percentage of national income.

What is the Budget?

THE Budget is when the government outlines its plans for tax hikes, cuts and things like changes to the minimum wage.

It's different to the Spending Review, which sets out how much public cash will go towards funding certain departments, devolved government's and services, such as the NHS.

The Budget is read out in the House of Commons by the Chancellor of the Exchequer. It will be Rishi Sunak's second Budget as Chancellor.

Mr Sunak's first one in March last year has been dubbed the "coronavirus Budget" after it focused on supporting Brits financially through the crisis, rather than the government's "levelling up" agenda as promised in the 2019 general election.

Normally, the Budget is held once a year but the unprecedented circumstances of the pandemic in 2020 saw Mr Sunak give a "mini-budget" in the Commons on July 8

The CBI’s chief economist Rain Newton-Smith said extending the furlough scheme will keep “millions more in work and give businesses the chance to catch their breath”.

She added: “The furlough scheme has been a stand-out success.

“It’s common sense to keep the scheme going while business resilience remains fragile.”

The Sun Says

RARELY can a Chancellor have had such conflicting advice before a Budget. And that’s just from Rishi Sunak’s own party.

Raise taxes. Don’t raise taxes. Raise taxes, but cut spending.

We are delighted Mr Sunak won’t be hiking fuel duty. But we fear the £400billion black hole in the finances will spook him into increasing others.

The bottom line post-Covid must be to save jobs and create many more — and to let firms old and new do just that.

Britain is a magnet for investment, with our new independence and potentially a summer explosion in growth.

Any tax raids that put the brake on that look fraught with risk.

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