06 Nov 2020
The UK chancellor announced on Thursday evening an extension of the furlough programme until March next year.
In a major U-turn for the government, Rishi Sunak said the Treasury would allow the scheme to run for a full year by continuing to pay 80% of temporarily laid-off workers’ wages until 31 March 2021.
In addition, he confirmed an expansion in funding for self-employed workers from November to January.
Mr Sunak said it was increasingly clear that the economic effects of the pandemic would last longer than the second lockdown in England, which is due to run until 2 December, and therefore this wage support was needed.
Shadow chancellor Anneliese Dodds said Mr Sunak ignored objections to the government’s previous measures “until the last possible moment.”
She pointed out that he had previously “ridiculed” a furlough extension as "a blunt instrument.”
But Mr Sunak defended his rapid change of policy, saying: “It is not a weakness to be fast-moving in a crisis, but rather a strength.”
Alison Thewliss, the Scottish National Party’s Treasury spokesperson at Westminster, described the “long-overdue Tory U-turn” as “welcome,” but said it came after six months of immense pressure from the SNP and others.
Paul Johnson, the director of the Institute for Fiscal Studies thinktank, said he was “taken aback” by the chancellor’s move.
He tweeted: “Basically return to March schemes (dreamed up on the hoof in 24 hrs) as if nothing learned since. Wasteful & badly targeted for self-employed. No effort at targeting sectors/viable jobs for employees. Big contrast to position just days ago.”