Pleas for Furlough Extension fall on deaf ears at the Treasury

The recently announced four-week delay to the easing of lockdown in England has prompted business groups to call for further government support for businesses. Chancellor Rishi Sunak has rejected the calls for an extension to the furlough scheme and business rates relief.

Sources close to the Chancellor allegedly said that he believed sufficient measures were already in place to cope with a delay, while his decision for furlough to last until September was in case of unlocking delays.

The Coronavirus Job Retention Scheme (Furlough Scheme) begins winding down on the 1st July, and will cease entirely on the 30th September. During the three month period, employers will need to contribute more towards the 80% of their normal working pay that employees should receive.

Ed Miliband, shadow business secretary, said many businesses are concerned about the removal of support while they are still unable to trade or profit, adding ‘the price of any delay to the roadmap must not be paid by businesses’.

The Confederation of British Industry (CBI) said ‘although the delay was regrettable it is understandable’ as a postponement is preferable to lifting lockdown and then reimposing restrictions. However, the CBI also warned of damage to the hospitality sector, leisure and live events.

Tony Danker, Director General of the CBI, said: ‘Continuing restrictions means the government must urgently revisit the support available. That starts with holding back on the tapering of business rates relief and extending the commercial rent moratorium for those sectors most impacted. A solution must also be found for the hard-pressed international travel sector.’

Meanwhile, Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), said: ‘Despite a successful vaccine programme and all the best efforts from small firms, they will be bitterly disappointed to find they face at least another month of restrictions.

‘These sectors and their supply chains need ambitious and targeted support. The 19 July must be the final date for when these restrictions will be lifted.’

Claire Walker, Co-Executive Director of the British Chambers of Commerce (BCC) called for an extension to VAT deferrals and business rates relief. She stated: ‘Government should work with lenders to ensure that appropriate forbearance is in place for those who have used government lending schemes and already started to repay their loan without being able to open fully.’