Pleas for furlough scheme extension after Freedom Day delay

15 June 2021, 07:12

Rishi Sunak has not extended the extension scheme, despite the end of lockdown restrictions being delayed
Rishi Sunak has not extended the extension scheme, despite the end of lockdown restrictions being delayed. Picture: PA

By Kate Buck

Unions and politicians have called for the furlough scheme to be extended after the Prime Minister announced Freedom Day would not be going ahead as planned.

The Government has said there will be no changes to the original timings regarding the end to current financial support measures, meaning businesses who are forced to remain closed will need to start contributing to furlough payments from 1 July.

Boris Johnson yesterday announced a four-week delay to the easing of Covid-19 restrictions, and current rules - with some exceptions - are now set to remain in place until July 19.

He blamed the delay on the spread of the Delta variant, which it is feared could cause a surge in hospitalisations if restrictions are eased too quickly.

Read more: Freedom Day delayed - PM faces fury over not closing borders to Delta variant

Read more: 'Kick in the teeth' - business owners react to roadmap delay

Tory MP and chairman of the Justice Select Committee Sir Bob Neill said it was "unconscionable" for the support not to be extended.

Speaking in the House of Commons, Sir Bob said: "Has (Mr Hancock) not recognised that just a few weeks or 'a little longer' in the prime minister's parlance, makes the difference between survival or closure for some businesses.

"Will he recognise that therefore forcing businesses to remain closed for a further period without financial support being extended for the same equivalent period is unjust, unconscionable and unsupportable - will he take that back to the chancellor and the prime minister please?"

Labour Mayor of London Sadiq Khan is also among senior figures backing an extension.

Read more: Roadmap delay - What are the rules now?

He said: "The government must now act urgently to extend economic support to all businesses who need it."

The criticism comes after a number of Tory MPs voiced their opposition to the delay to Freedom Day.

The hospitality sector is feared to be amongst the worst-hit, with pub bosses warning the delay will cost the sector £400 million.

She said: "The delay will cost our pubs £400 million for this period alone, but inevitably much more as confidence deteriorates and as a key part of the summer season is lost that is so critical to our sectors viability.

Emma McClarkin, chief executive of the British Beer & Pub Association (BBPA), said the delay is "hard for our sector to stomach".

"Pubs and licensees are struggling to recover with the current restrictions they face and debts are accumulating.

"Every week the current restrictions stay and uncertainty continues, the likelihood of pubs being lost forever increases.

"A full package of Government support is now critical for our sector until it is guaranteed to open fully without any restrictions."

General secretary Frances O'Grady said: "The Government must step up and provide urgent targeted support for these industries. We cannot afford for more companies to go to the wall, taking good jobs with them.

"The Chancellor also needs to announce now that he will extend furlough for as long as is needed, rather than cutting it off abruptly in three months' time.

"Working people need this certainty now - not a rollercoaster approach to protecting livelihoods."

Manuel Cortes, general secretary of the Transport Salaried Staffs Association, said: "Continued restrictions are sadly needed, but they will only be effective if sufficient support is also provided. You can't take with both hands and expect people to comply."

Paul Fleming, general secretary of the actors' union Equity, said: "The Government's approach is once again a catastrophic blow to Equity's members and their live performance workplaces - from pubs and clubs to theatres.

"There's no dispute that public health comes first but the Government can't just expect a limitless reserve of resilience from our industry.

"Introducing real grants to commercial and subsidised producers to make up for reduced capacity could transform the number of shows which are open."

The Treasury has backed the decision not to extend the scheme.

A spokesperson said: "The furlough scheme is in place until September - we deliberately went long with our support to provide certainty to people and businesses over the summer."