If you’ve watched the news lately, every other question the Government has been asked is what is their exit strategy from the lock down. The new Labour leader, Sir Keir Starmer has applauded the decision to extend the UK lock down by a further 21 days through to the 7th of May, but has also led calls for an exit strategy. Now, the Chancellor has announced a Coronavirus Job Retention Scheme extension to the end of June. That pretty much confirms that the 7th of May will not be the day for a mass exodus from home quarantine and acknowledges that many will be living and working at home for months into the future.
The reasoning behind the Coronavirus Job Retention Scheme extension is to give some certainty to companies that the government will support them as some were already making noises that they’d be making redundancies and that would have meant serving notice in the next few weeks. By giving the Coronavirus Job Retention Scheme extension it’s hoped that businesses will keep employees on the books and being paid with the expectation that at the end of furlough periods they’ll be returning to work.
It’s worth noting that in the US, some 22 million people have been laid off work since the Coronavirus crisis hit, one of the reasons President Trump is desperate to re-start the economy and get people back to work regardless of the continuing pandemic. Many firms will still be downsizing and making redundancies, but in the mean time with the furlough scheme employees are still being paid at the moment.
“We’ve taken unprecedented action to support jobs and businesses through this period of uncertainty, including the UK-wide Job Retention Scheme. With the extension of the coronavirus lockdown measures yesterday, it is the right decision to extend the furlough scheme for a month to the end of June to provide clarity.
It is vital for people’s livelihoods that the UK economy gets up and running again when it is safe to do so, and I will continue to review the scheme so it is supporting our recovery.”
– Rishi Sunak, Chancellor of the Exchequer
Before the Coronavirus Job Retention Scheme extension to the end of June, furloughs were open for three months and backdated from the 1 March to the end of May. However, the Chancellor said he would keep the scheme under review and extend it if necessary which he has now done. Future decisions on the scheme will take into account further developments on the wider measures to reduce the spread of coronavirus, as well as the responsible management of the public finances.
