THE furlough scheme will be extended until the end of September, Rishi Sunak has confirmed.
The Chancellor told MPs that the damage coronavirus has done to the UK economy has been “acute” as he began his Budget statement.
He said the Office of Budget Responsibility are now forecasting a "swifter and more sustained recovery than expected".
Sunak told MPs: “As businesses reopen, we’ll ask them to contribute alongside the taxpayer to the cost of paying their employees. Nothing will change until July, when we will ask for a small contribution of just 10% and 20% in August and September.”
Sunak said the support for self-employed workers will also continue until September, with the fourth grant providing three months of support at 80% of average trading profits. He noted for the fifth grant, people will continue to receive grants worth three months of average profits – with the system open for claims from late July.
He said the full 80% grant will be given to people whose turnover has fallen by 30% or more, telling MPs: “People whose turnover has fallen by less than 30% will therefore have less need of taxpayer support and will receive a 30% grant.”
On changes to the self-employed scheme, the Chancellor said: “When the scheme was launched, the newly self-employed couldn’t qualify because they hadn’t all filed a 2019/20 tax return.
“But as the tax return deadline has now passed, I can announce today that, provided they filed a tax return by midnight last night, over 600,000 more people, many of whom only became self-employed last year, can now claim the fourth and fifth grants.”
The economy will return to pre-Covid level by the middle of next year, Sunak said. But he added that Covid-19 has done damage.
He said the economy will be 3% smaller in five years than it would have been.
"The OBR forecast that our economy will grow this year by 4%, by 7.3% in 2022, then 1.7%, 1.6% and 1.7% in the last three years of the forecast."
More to follow.
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