The Treasury has announced it will extend the UK’s coronavirus job retention scheme by one month until the end of June in a sign that an economic recovery may be some way off.
The scheme was originally open for three months and backdated from the 1 March to the end of May, but it will now run until at least the end of June.
Chancellor Rishi Sunak said it was “the right decision” after the government extended the coronavirus lockdown for another three weeks yesterday.
The job retention scheme allows firms to “furlough” employees – keep them on the staff without them working – with the government paying cash grants of 80 per cent of their wages up to a maximum of £2,500.
Responding to the announcement, the CBI said:
“The Chancellor’s welcome extension of the Job Retention Scheme beyond the end of May will help protect the economy and prevent unnecessary job losses through this new lockdown phase. Once again, the Government deserves credit for showing agility in the face of unprecedented challenges.’
“This extension means that firms will no longer be forced to issue redundancy notices over the next few to days to comply with 45-day consultation requirements, and can instead return to focusing on protecting jobs and their businesses’.
“No firm wants the Scheme to last for longer than it needs to, but it’s absolutely clear that these vital support systems must stay in place until it’s safe for people to return to work and we can begin to restart and revive our economy.”