19:08 GMT19 April 2021
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    Chancellor Rishi Sunak is delivering a budget statement to MPs in the UK House of Commons on Wednesday, as the government vowed to set out "the next phase of the plan to tackle the virus and protect jobs" during the ongoing coronavirus pandemic, while the Chancellor faces the daunting task of repairing public finances once the crisis is over.

    The Coronavirus Job Retention Scheme that has served as a lifeline supporting workers amid the layoffs and lockdowns that the COVID-19 pandemic entailed will be extended until the end of September, Chancellor Rishi Sunak is to announce in the new UK government budget, writes The Guardian.

    Also known as “furlough”, the support scheme which pays 80 percent of employees' wages for the hours they cannot work in the pandemic was introduced at the start of lockdown in March 2020, and has already been extended twice, with the last extension coming in November. The scheme is currently estimated to have cost the Treasury around £50bln ($69bln).

    As the UK Spring Budget statement is to be delivered to the House of Commons at around 12.30 GMT, the Chancellor will announce the government’s commitment to doing "whatever it takes to support the British people and businesses through this moment of crisis".

    Earlier, the Treasury added that the budget would have three themes: “Support, honesty and building the UK’s future economy.”

    ​“We’re using the full measure of our fiscal firepower to protect the jobs and livelihoods of the British people,” Sunak will state, according to the outlet, as more provisions are offered for workers and the self-employed.

    The government's chief finance minister is to reveal a three-point long-term plan to extend more support to people in the months ahead, while seeking to subsequently rebuild the post-pandemic economy and repairing public finances after recovery is underway.

    Furlough Lifeline

    In line with the cornerstone policy aimed at supporting the population during the COVD-19 challenges – the furlough scheme – ‘furloughed’ employees will continue to receive up to 80 percent of their pay for hours not worked. However, as of July, the government will contribute 70 percent and employers will have to pay 10 percent for hours not worked. In August and September the government will pay 60 percent and employers 20 percent.

    The scheme, which witnessed over a million food and accommodation workers on furlough at the end of January, with 938,000 in the retail sector, was set to finish at the end of April.

    11.2 million jobs have been supported by the scheme since March 2020.

    However, in line with the government's lockdown roadmap for the nation, gyms, hairdressers and non-essential shops will reopen no sooner than by 12 April at the earliest. Pubs and restaurants will be able to serve customers outside if lockdown restrictions are eased by then.

    People queue to enter an NHS Covid-19 vaccination centre in Westfield Stratford City shopping centre in east London on February 15, 2021 as Britain's largest ever vaccination programme continues.
    © AFP 2021 / TOLGA AKMEN
    People queue to enter an NHS Covid-19 vaccination centre in Westfield Stratford City shopping centre in east London on February 15, 2021 as Britain's largest ever vaccination programme continues.

    Support will be extended to an additional 600,000 people, including many self-employed, who were not eligible for grants earlier.

    The self-employment income support scheme (SEISS), which allows workers whose business has been impacted by the pandemic to claim money from the Government, has been in place since the first lockdown, in May, and was worth 80 percent of past average monthly trading profits for those eligible at the time.

    The scheme will continue through April 2021, when the fourth grant will be available to claim, worth 80 percent of three months' average trading profits up to £7,500, while the chancellor will reveal the details of a fifth grant.

    This time around, hundreds of thousands more people will be eligible for the grants, with available tax return data for 2019-20 making this possible in the wake of criticism that newly self-employed people missed out on the grants earlier.

    Speaking ahead of the Budget, the chancellor 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."

    Applauding the decision to extend the scheme, Kate Nicholls, chief executive of UK Hospitality was quoted as saying:

    "Extending the full furlough support for businesses up to and beyond the full reopening date for hospitality is a very positive move. It will help keep businesses afloat and more jobs secure as they trade their way back to prosperity in the months and years to come.

    ‘Building a Future Economy’

    The decision comes as unemployment in the UK amid the pandemic has already reached a rate of 5.1 percent and was forecast by the Bank of England to soar to 7.75 percent in the middle of the year, unless the job support schemes were extended.

    The Chancellor is also to extend the business rates and stamp duty holidays, and maintain the £20 a week boost in universal credit for six months.

    However, there have been reports ahead of the budget announcement that the Chancellor is to unveil a spate of tax hikes, with business groups bracing themselves for a growth in corporation tax from its current rate of 19 percent.

    ​The chancellor is expected to say:

    “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.”


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