Prime Minister Boris Johnson has stated that, based on current data, there is no reason to extend support for businesses impacted by the coronavirus pandemic.
In response to a question about business support, he said: “We always made sure that the furlough scheme would continue until September to take account of the whole spread of the road map. The Chancellor has always been very, very clear about that.”
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No extension to furlough support
He added: “On the basis of what we can see now … in the data, on the basis of the vaccine effectiveness that we can see now, we don’t think that we’ll need to change that.”
The furlough scheme will force employers to contribute 10% of an employee’s wage from the start of July, rising to 20% in August, as taxpayer support is cut from the current level of 80%. Employees will continue to receive the same amount.
Johnson’s comments come as he announced a delay of alleviating lockdown restrictions any further, until 19 July.
The initial Covid lockdown roadmap for England outlined June 21st as when the country was expected to move into step 4 of easing restrictions. This has now been delayed by a minimum of four weeks.
‘The Question is a matter of balance’
Joining the Prime Minister at the press conference, Chief Medical Officer Professor Chris Whitty said a balance had to be struck between protecting people and opening up society.
“No one thinks at the end of the four-week delay the risk is gone,” he said.
“There will still be substantial numbers, there will be substantial numbers in hospitals and sadly there will be some people who will go on to die of this.
“The question is a matter of balance.”
Professor Whitty added that the virus would continue to mutate and there would continue to be a loss of life, he said: “we will have to live with this virus – which will continue to cause severe infections and kill people – for the rest of our lives”.
“Where does the balance lie?”
Kate Nicholls from UKHospitality, which represents over 730 companies operating around 85,000 pubs, clubs, restaurants and cafes, warned that businesses could lose out on £3bn in sales, due to the delays on lifting restrictions.
‘Delay the tapering of government payments’
Prior to the Prime Minister’s announcement, The British Chambers of Commerce (BCC) alsp said business support measures should reflect the level of restrictions announced and remain in place until the economy is able to reopen fully.
"We would be calling for the government to provide further cash grants, at least equivalent to levels provided during the first lockdown, and to delay the tapering of government payments into the furlough scheme, planned for the start of July," said BCC co-executive director Claire Walker.
"The government should also look at extending the trade credit reinsurance scheme beyond the end of June to minimise possible disruptions in insurance coverage."
The Guardian reported Chancellor Rishi Sunak has reportedly told two sources that he had intentionally “gone long” at the March budget by announcing furlough would last until September for exactly this reason.