THE furlough scheme will today be extended until the end of September.
Rishi Sunak’s Budget vow means millions will have been paid to stay at home for a gruelling 17 months.
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Employers will be asked to start chipping in from July in the hope of avoiding mass lay-offs.
The Chancellor’s vow “to do whatever it takes” to protect jobs will add £5billion a month to the pandemic’s £280billion support bill.
But he will also warn today that the time to get the nation's books in order is rapidly approaching.
Mr Sunak is gambling on buying some time to allow the economic recovery to strengthen in order to weather the unemployment hit.
The Coronavirus Job Retention Scheme has protected more than 11million jobs since its creation last March, with Mr Sunak promising further help in the “challenging months ahead — and beyond”.
Employees taking part will continue to receive 80% of their salary — up to a maximum £2,500 a month — for hours not worked until the scheme ends.
In July, business bosses will be expected to contribute 10% of the cost, increasing to 20% in August and September, as the economy reopens.
Today’s Budget will also extend the Universal Credit uplift of £20 for six months and business support measures such as five per cent VAT for pubs and restaurants.
The Chancellor will also announce further support for the self-employed, with more than 600,000 people eligible for cash.
A fourth grant from the Self-Employment Income Support Scheme is available from April, worth 80 per cent of three months’ average trading profits up to £7,500.
In his speech to MPs, Mr Sunak will promise to help struggling workers with the “full measure of our fiscal firepower” but warn that the time is approaching to “begin fixing the public finances”.
He will vow to use every means “to protect jobs and livelihoods”.
£400BN BLACK HOLE
But Mr Sunak is staring at a £400billion black hole.
He will set out “a three-point plan to protect jobs” but also give a reality check over the dire economic situation due to the pandemic.
The Treasury said yesterday that the Budget will focus on “support, honesty and building the future economy”.
At lunchtime, Mr Sunak will tell MPs: “Once we are on the way to recovery, we will need to begin fixing the public finances — and I want to be honest today about our plans to do that.”
It is expected that will mean a hike in corporation tax on businesses and capital gains taxes on millionaire second property owners and investors.
What is the Budget?
THE Budget is when the government outlines its plans for tax hikes, cuts and things like changes to the minimum wage.
It's different to the Spending Review, which sets out how much public cash will go towards funding certain departments, devolved government's and services, such as the NHS.
The Budget is read out in the House of Commons by the Chancellor of the Exchequer. It will be Rishi Sunak's second Budget as Chancellor.
Mr Sunak's first one in March last year has been dubbed the "coronavirus Budget" after it focused on supporting Brits financially through the crisis, rather than the government's "levelling up" agenda as promised in the 2019 general election.
Normally, the Budget is held once a year but the unprecedented circumstances of the pandemic in 2020 saw Mr Sunak give a "mini-budget" in the Commons on July 8
It is also thought Mr Sunak will freeze the rates at which workers start to pay different levels of income tax, meaning more people will be caught in a higher band over the coming years.
Last week, The Sun revealed he had been warned the deficit needs reducing by around £30-40billion now to stabilise borrowing and prevent debt from rising as a percentage of national income.
Ahead of the Budget, Mr Sunak said: “Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes.
“There’s now light at the end of the tunnel, so it’s only right that we continue to help business and individuals through the challenging months ahead — and beyond.”
The furlough move was welcomed by business chiefs.
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The CBI’s chief economist Rain Newton-Smith said extending the scheme will keep “millions more in work and give businesses the chance to catch their breath”.
She added: “The furlough scheme has been a stand-out success.
“It’s common sense to keep the scheme going while business resilience remains fragile.”
The Sun Says
RARELY can a Chancellor have had such conflicting advice before a Budget. And that’s just from Rishi Sunak’s own party.
Raise taxes. Don’t raise taxes. Raise taxes, but cut spending.
We are delighted Mr Sunak won’t be hiking fuel duty. But we fear the £400billion black hole in the finances will spook him into increasing others.
The bottom line post-Covid must be to save jobs and create many more — and to let firms old and new do just that.
Britain is a magnet for investment, with our new independence and potentially a summer explosion in growth.
Any tax raids that put the brake on that look fraught with risk.
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