Chancellor to extend furlough scheme until September

In his Budget speech later today, Rishi Sunak will say that the furlough scheme, which pays 80% of employees’ wages for hours they lose to the virus, would help millions through “the challenging months ahead”. 

The furlough extension will come as a relief to the retail sector, which has been one of the worst hit alongside hospitality by store closures and job losses. 

Office for National Statistics data from February showed that more than 4.7 million people in the UK were on furlough in February, of which just under 1 million worked in retail. 

Speaking ahead of the Budget, 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.”

Extending furlough will be part of Sunak’s ‘three-point plan’ to rebuild the economy post-Covid, and to do so he will warn of tough economic times ahead and possibly raise taxes.

The chancellor is also expected to unveil a £5bn grant scheme to help struggling high street shops and hospitality firms in England reopen after lockdown, and a £400m scheme for closed theatres, live music venues and cinemas. 

Last October, Sunak said balancing the nation’s books was “a sacred duty” and he has been urged by former Conservative chancellor Philip Hammond to cut spending rather than raise taxes.