The UK furlough Jobs Retention Scheme will be extended by four months to October for all sectors and regions, the chancellor Rishi Sunak has announced.
Speaking today in the House of Commons, Sunak said the scheme has helped seven-and-a-half million people and one million businesses to keep people in employment.
Sunak said the scheme will be made more flexible from July to help with the transition back to work which will allow part-time working.
But he said the current support of 80% of salaries to £2,500 a month will remain. Further details will be announced at the end of this month.
“This scheme has been a world leading intervention supporting livelihoods and protecting futures. As we re-open the economy we will need to support people back to work. We will do so in a measured way,” he said.
The extension of the furlough scheme will mean businesses will be supported for eight months at an estimated cost of £14 billion a month.
Sunak said firms in the aviation sector are able to access support from the measures already in place, like the Jobs Retention Scheme.
He said while all firms have an opportunity to engage with government, it would be inappropriate to discuss any bilateral discussions that are going on with specific companies in the sector about any additional tailored support.
The chancellor was asked whether the extension of the furlough scheme should mean British Airways reverses its announcement of 12,000 potential job losses due to the COVID-19 crisis.
He said the government has provided “considerable support to companies to get through this crisis” and it will work to make sure it can protect as many jobs as possible.
Leisure and hospitality
Asked by Brighton Green Party MP Caroline Lucas whether Sunak would consider a special programme of support measures for the leisure and hospitality sectors, he said:
“I agree it’s a sector that’s been most impacted by what we’ve been going through which his why it’s received the most support.”
Sunak said over one million businesses in the sector have been eligible for £25,000 cash grants and the sector as a whole has been given a business rates holiday worth £12 billion this financial year.
The chancellor added he will keep all economic measures under review.
Chief executive of the Airport Operators Association Karen Dee welcomed the extension of furlough support.
She said: “The extension of the Job Retention Scheme and the promised flexibility from August is a major step forward and will be welcomed by all airports.
“However, with open-ended quarantine restrictions planned, aviation is unlikely to be in a position to recover meaningfully before October.
“This was underlined this morning by Health Secretary Matt Hancock saying that is ‘likely to be the case’ that summer holidays will be cancelled.
“Aviation needs further government support to get us through this prolonged period of near-zero passengers and revenue.
“The chancellor should announce an extension of business rate relief to airports, provide relief from Civil Aviation Authority charges and provide sector-wide liquidity support to reflect that existing scheme will now not be suitable following the quarantine announcement.
“Other countries have already taken dramatic steps to support their aviation industries. The chancellor should do likewise to ensure his economic support measures are truly world-leading and prevent UK aviation from falling behind our global competitors.”