Rishi Sunak is reportedly set to extend the government’s furlough scheme beyond the end of April in his 3 March Budget.
The chancellor is drawing up plans to extend the £82bn scheme into the summer as the UK looks set to have strict Covid restrictions in place for several months.
The scheme, which sees the government pay up to 80 per cent of wages up to £2,500 a month, was originally supposed to end last October.
The UK’s Covid cases are steadily falling, however deaths are at their highest ever point as the UK rolls out the Pfizer and AstraZeneca vaccines.
Foreign secretary Dominic Raab said on Sunday that he hoped the England Covid lockdown could be eased by March, while media reports on Monday speculated that stringent conditions could be in place until May.
A source close to Sunak told Bloomberg that “support for jobs isn’t going to end” while most businesses cannot open and that the chancellor is likely to extend the furlough scheme beyond April.
It comes days after the CBI and the British Chambers of Commerce, two of the UK’s largest business groups, called for an extension of Sunak’s furlough scheme.
CBI director-general Tony Danker said: “The government must once again stand shoulder-to-shoulder with businesses to underwrite support for the duration, helping viable enterprises to last the course.”
Mayor of London Sadiq Khan also backed the call for an extension of the furlough scheme and an extension of the business rates holiday past March.
“Current plans to end the business rates holiday in March and then the furlough scheme in April create a huge financial cliff edge for employers,” Khan said.
“Without the certainty that support will remain in place for as long as it is needed, many more businesses could decide to cut their losses and close permanently now.”