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Business leaders call on the Chancellor to extend the furlough scheme until the end of 2021

The Chancellor is under increasing pressure from business leaders to extend the furlough scheme even further. With the unemployment rate soaring across the country, The Trades Union Congress (TUC) is encouraging the Government to extend the Coronavirus Jobs Retention Scheme to the end of 2021.

First introduced at the start of the pandemic in March 2020, the furlough scheme has been extended several times and has so far cost almost £50billion. It is currently due to end at the end of April, having previously been set to finish in October 2020. With no end to the Covid-19 pandemic in sight, organisations such as the TUC and the Confederation of British Industry are leading calls for a further extension to the Government help scheme.

High rates of unemployment and redundancies

The demands come following recent data revealing that UK unemployment is at its highest level for more than four years, with the unemployment rate now hitting 5%. As many businesses continue to struggle, the number of redundancies has also grown exponentially. New job vacancies also stand at around half of what was available pre-pandemic.

Need for ongoing support

The TUC has noted that the largest rises in unemployment during 2020 occurred when the furlough scheme was due to end or when the support available was reduced. It argues that the Government needs to understand the damage caused by withdrawing support or failing to confirm the continuation of support until the last minute. With the future of the job retention scheme currently in limbo, there are fears that many more jobs may be lost before the end of April.

No fool proof solution

Regardless of the future of the furlough scheme, business leaders have warned that pressure on the job market is likely to continue increasing, with the economy anticipated to continue shrinking during the first quarter of the year, in part due to the mass closures of businesses in retail, hospitality, and leisure.

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We know that accounting can be difficult during this unprecedented time. Contact CWR Accountants if you need professional accountancy support with your bookkeeping or payroll.