Furlough scheme to be extended until end of September, Chancellor will announce

2 March 2021, 22:00 | Updated: 3 March 2021, 08:26

The Chancellor will announce an extension to the furlough scheme
The Chancellor will announce an extension to the furlough scheme. Picture: PA

By Maddie Goodfellow

The furlough scheme will be extended until the end of September with employers asked to contribute to workers' salaries from July, the Chancellor is set to announce.

Workers will continue to receive 80 per cent of their current salary until the scheme finishes - with businesses being asked for a contribution from the end of July.

The Chancellor also set to announce that more than 600,000 people, including the newly self-employed in 2019-20, will now be eligible for government support.

Millions of people across the UK will continue to be supported through the next stage of the pandemic with an extension of the government’s furlough scheme.

Rishi Sunak is set to extend the Coronavirus Job Retention Scheme, which has protected 11.2 million jobs since the start of the pandemic, until the end of September.

And in a major improvement in access to the self-employed scheme, he is also set to announce that more than 600,000 people, many of whom became self-employed in 2019-20, will now be able to claim direct cash grants under the Self-Employment Income Support Scheme.

Mr Sunak said: “Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK.

“There’s now light at the end of the tunnel with a roadmap for reopening, so it’s only right that we continue to help business and individuals through the challenging months ahead - and beyond.”

Rishi Sunak is expected to say at tomorrow's budget that the government will continue to "do whatever it takes to support the British people through this moment of crisis". 

Mr Sunak is expected to set out a three-point economic plan focused on supporting people through the Covid-19 pandemic, fixing the public finances and building the future economy.

The Chancellor will tell MPs: "We're using the full measure of our fiscal firepower to protect the jobs and livelihoods of the British people."

Read more: Rishi Sunak says UK economy will face 'enormous strains' post-lockdown

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Mr Sunak is expected to add: "First, we will continue doing whatever it takes to support the British people and businesses through this moment of crisis.

"Second, 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.

"And, third, in today's Budget we begin the work of building our future economy."

The Budget will build on the Government's Plan for Jobs and the unprecedented £280 billion package of support to weather the pandemic.

It was announced on Monday that the Chancellor is to launch a £520 million initiative to support small UK businesses with training and software in this week's Budget.

Rishi Sunak said the Help to Grow scheme could help 130,000 SMEs (small and medium enterprises) become more productive by providing access to some of the UK's top business schools.

The Treasury said that firms will receive expert technology advice and discounted software, as it aims to spark innovation as the UK plots its recovery out of the pandemic.

Mr Sunak said: "Our brilliant SMEs are the backbone of our economy, creating jobs and generating prosperity - so it's vital they can access the tools they need to succeed

"Help to Grow will ensure they are embracing the latest technology and management training, fuelling our Plan for Jobs by boosting productivity in all corners of the UK."

Under the "plan for jobs", Mr Sunak will also commit £126 million to create 40,000 additional traineeships in England and offer cash incentives for employers who take on an apprentice to £3,000 in the Budget.

The Chancellor will also provide more than £400 million of additional support for the badly hit culture sector.

Rishi Sunak is preparing to hand out £408 million to help museums, theatres and galleries in England to reopen once coronavirus restrictions start to ease in the coming months.

Many theatres have not been able to open their doors since March 2020.

In a slew of pre-Budget teasers, Treasury officials also said Mr Sunak will use his fiscal package on Wednesday to give a "significant chunk" of a £300 million sports recovery package to cricket as fans prepare to return to stadiums this summer.

Over the weekend, it was announced that hundreds of thousands of business hit hardest by Covid-19 will able to get 'restart' grants as part of a £5 billion scheme to help them reopen as lockdown is eased.

Rishi Sunak will announce booster payments worth up to £6,000 per premises to help pubs, restaurants, shops and other non-essential retailers welcome back customers and trade safely as measures are gradually lifted.

Hospitality, hotels, gyms, as well as personal care and leisure firms, will be eligible for up to £18,000 per premises as they reopen in the Spring

The Treasury estimates 230,000 firms will be eligible for the higher band, which will be awarded based on their rateable value, and 450,000 shops will also be able to apply.

The £5 billion is targeted at England, but the devolved nations in Scotland, Wales and Northern Ireland will receive an extra £794 million in funding through the Barnett formula.

Read more: Furlough scheme 2021: End date, Budget changes and how to claim

Read more: When is Budget Day 2021 and what time is Rishi Sunak’s announcement?

On Tuesday, Mr Sunak held a virtual call with around 50 people who have been helped by the Government's support schemes during the pandemic - such as furlough.

The Treasury said the Budget will build on the Government's plan for jobs and the £280 billion package of support during the coronavirus crisis.