RISHI Sunak will today extend the UK Government’s furlough scheme “lifeline” for another five months to help protect millions of British jobs as the country begins to look beyond the pandemic and towards recovery.

Amid an unprecedented economic backdrop, the Chancellor will in his Budget statement to the House of Commons this afternoon again pledge to do “whatever it takes to support the British people and businesses through this moment of crisis”.

The Coronavirus Job Retention Scheme, which began last March and was due to close at the end of April, has protected 11.2 million jobs since the start of the pandemic at a cost of £54 billion to the taxpayer. It will now run until the end of September.

Under this, the sixth extension, employees will continue to receive 80% of current salary until the scheme ends with employers asked - as restrictions are eased and the economy begins to reopen – to contribute 10% of wages in July and 20% in August and September towards the hours their staff do not work.

And, in what the Treasury billed as a “major improvement in access to the self-employed scheme,” Mr Sunak is also set to announce that more than 600,000 people, many of whom became self-employed in 2019/20, will now be able to claim direct cash grants under the Self-Employment Income Support Scheme.

Alongside the Government’s Plan for Jobs, the injection of additional support will, insisted the Treasury, give businesses and hard-working families the “certainty they need as we enter the next stage of our recovery”.

The Chancellor said: “Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK.

“There’s now light at the end of the tunnel with a roadmap for reopening, so it’s only right that we continue to help business and individuals through the challenging months ahead and beyond.”

Last month, Boris Johnson made clear the UK Government would not “pull the rug” on support for businesses and families during the pandemic and expectations are high that the Chancellor will not only extend the furlough scheme but also announce to extend the reduced VAT rate business rate relief, the stamp duty holiday in England and the extension to £20 weekly rise in Universal Credit until, at least, the summer.

But as Mr Sunak pledged to use the Treasury’s “full fiscal firepower” to protect jobs, he also said he wanted to be “honest” and gave a warning, saying: “Once we are on the way to recovery, we will need to begin fixing the public finances.”

This is code for tax rises, which are likely to come in another Budget expected in November.

After today’s Commons statement, the Chancellor will make a precedent, in light of the pandemic, by holding a press conference in Downing St to explain to the public the choices that lie ahead.

Kate Forbes, the Scottish Government’s Finance Secretary, insisted the Budget must provide adequate funding for Scotland and respect the devolution settlement.

“The Chancellor must not turn this into a Budget that centralises resources and decision-making at Westminster. We are still in the throes of a national emergency and it is vital we receive the funds needed to continue to support Scottish businesses and livelihoods,” she declared.

Ms Forbes insisted the Scottish Government had acted decisively to provide help such as extending non-domestic rates relief by 12 months for those sectors worst hit by pandemic as well as grants to businesses.

“This lifeline support is contingent on the receipt of additional consequential funding from today’s Budget. It is, therefore, more important than ever that the Chancellor respects the devolution settlement and allows the Scottish Government to effectively develop its ongoing response to the pandemic.”

Responding to the extension to the furlough and self-employed support schemes, Labour’s Bridget Phillipson chided the Chancellor for delaying the announcements on the eve of the Budget, which, she said showed the “focus is on Rishi Sunak getting his moment in the sun rather than protecting jobs and livelihoods”.

“We need a Budget that secures Britain’s recovery and rebuilds the economic foundations the Conservatives weakened before the crisis. That means a plan to support jobs and businesses, protect family finances and set Britain on the path to a better, more secure future,” added the Shadow Treasury Chief Secretary.

Stephen Flynn for the SNP said Mr Sunak’s “11th hour concession” was welcome but it still fell short of a commitment to retain full support at 80% of pay for as long as it was required by the devolved nations.

“We cannot have a repeat of the damaging cliff edge last autumn when the Tories threatened to withdraw support prematurely. Decisions on public health measures must be driven by the data not arbitrary dates,” stressed the party’s business spokesman.

He added: “The UK has suffered the worst slump of any major economy, unemployment is rising and millions of families have had their incomes slashed. If we are to avoid a protracted downturn, it is crucial that the Chancellor plugs the gaps in support, rules out a return to Tory austerity cuts, and delivers a major fiscal stimulus of at least £98bn to kickstart an investment-led recovery.”

The business community gave a warm welcome to the furlough scheme extension.

Adam Marshall, Director General of the British Chambers of Commerce, said: “The extension of the furlough scheme shows that the Chancellor has listened to our business communities. Many firms will be breathing a huge sigh of relief, particularly those businesses that are still closed or facing reduced demand due to Covid-19 restrictions.

“The furlough scheme has been a lifeline for companies all across the UK. This extension gives firms much more clarity on the way ahead and will allow many to plan with greater optimism and confidence as they look to restart and rebuild over the coming months.”  

Kate Nicholls for UK Hospitality said: “Extending the full furlough support for businesses up to and beyond the full reopening date for hospitality is a very positive move.

“It will help keep businesses afloat and more jobs secure as they trade their way back to prosperity in the months and years to come. It will help businesses bring back staff flexibly which will be particularly helpful to those businesses, such as hotels, which will take longer to recover."

Warren Kenny, Acting General Secretary of the GMB, said: “Protecting jobs must be the first step to protecting incomes and ensuring the country can get back on its feet. Any extension to furlough is welcome but as always with the Budget the proof will be in the pudding.”

He stressed that talk of “fiscal fire power” and “continuing to do whatever it takes” would ring hollow to millions of workers who knew Statutory Sick Pay was not enough to live on and to public sector workers if another pay freeze were on the agenda.

“There’s a very clear choice about how we recover from the pandemic: investment in public works, public services and working people, or more of the same austerity that has left local government and social care crippled. The Chancellor is talking about honesty, let’s start with that.”

Ahead of tomorrow’s Budget it has already been announced that:

*nearly £410m will be released to support the badly-hit culture sector with around £40m going to the Scottish Government;

*a £300m summer sports recovery package will help cricket, tennis and horse racing;

*£57m for jobs and green energy in Scotland, including £27m for the Aberdeen Energy Transition Zone, which aims to transform north-east Scotland into a globally competitive hub for cleaner energies such as offshore wind and hydrogen;

*a £150m fund will help local communities save struggling pubs, sports clubs, theatres and Post Offices;

*a £520m initiative will be announced to support small UK businesses with training and software and

*£2.8m will help fund a joint UK and Ireland bid to host the 2030 football World Cup.

Meanwhile, Mr Johnson signalled the fuel duty freeze was set to continue as he made clear: “I firmly believe the economic recovery is going to be powered by White Van Man amongst others.”