Business leaders welcome furlough extension
Business leaders in the West Midlands have welcomed the Government’s decision to extend the furlough scheme until the end of March.
They say it will give struggling businesses some "breathing space" and help them to maintain their staff during the uncertain months ahead.
In a major U-turn by the Government, the Chancellor said the move is needed because of the economic situation caused by the Covid-19 pandemic.
Black Country Chamber of Commerce chief executive Corin Crane said its was really good news for businesses in the region and gave them stability.
“We have been campaigning hard for an extension to the furlough scheme, so today’s announcements are very welcome. Extending this until March will allow businesses to plan and feel they have a safety net for their employees.
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"We now need a medium term plan over a similar time period that covers all the support that businesses particularly around cashflow and especially to those who have been excluded from support so far," he said.
Greater Birmingham Chambers of Commerce chief executive Paul Faulkner said the announcement was welcome news for businesses, and their employees, struggling to plan even weeks ahead in this fast-changing environment.
“We are pleased to see action has been taken already on a number of points raised in Keep Business Moving, the GBCC’s action plan for government, namely reviewing dates of some existing schemes to ensure they align and reflect the current reality and increasing support for the self-employed to equivalent levels to the employed.
“There are still further areas to be addressed including on tax reliefs and incentives and support for those businesses and individuals falling through the gaps in the existing schemes."
Federation of Small Businesses national chairman Mike Cherry, a Staffordshire businessman, said:“This latest intervention from the Chancellor is bold and much-needed. The ability to furlough staff on these terms until March will give employers an acutely-needed injection of confidence as they head into the festive period beset by disruption. Enabling firms in any location to furlough staff is a very welcome move.
“It’s encouraging to see the extension of generous support to around two million self-employed people – who don’t enjoy many of the benefits afforded to employees, and are the employers of the future – outlined today.
“That said, those who were planning their approaches with an eye on the job retention bonus will be disappointed by this latest update. We look forward to further clarity on this front in the near future."
Legal employment expert Julia Fitzsimmons, partner with law firm FBC Manby Bowdler, which has offices in Wolverhampton, said: “Many businesses have been forced to make decisions which at the start of 2020 would have seemed unfathomable. And many employers have known for a long time that without the furlough scheme, they may struggle to keep on their staff.
Priority
“But the Chancellor has given a lifeline to employers and to millions of workers who may already have been aware they could be unemployed in the coming weeks, potentially even just before Christmas. There’s no doubt that this by offering this extension, redundancies will be avoided. However, it is still a sticking plaster for many businesses and long-term, employers face tough decisions ahead in order to keep their businesses alive.”
Mr Sunak said the Government's highest priority remains "to protect jobs and livelihoods".
He had previously extended the furlough throughout November due to the second national lockdown in England.
The Chancellor told the Commons: "We can announce today that the furlough scheme will not be extended for one month, it will be extended until the end of March.
"The Government will continue to help pay people's wages up to 80 per cent of the normal amount.
"All employers will have to pay for hours not worked is the cost of employer NICs and pension contributions.
"We will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more."
The move comes after the Government continually resisted pressure to extend the furlough scheme which was originally supposed to end in October.
British Chambers of Commerce Director General Adam Marshall said: “A further extension of the furlough scheme and more generous grants for the self-employed are important steps in protecting jobs and providing certainty for our business communities beyond the immediate shock of a four-week lockdown.
"These changes give businesses significant reassurance over an uncertain winter, but many will understandably still wish for the government to give a clearer view of the road ahead. Government must set out longer-term measures over the next 12 months to give firms greater certainty and confidence to plan proactively, rather than to react to changes in support from week to week."nificantly improve the Test, Track and Isolate system, which remains key to keeping the economy open.”
The Confederation of British Industry's chief economist Rain Newton-Smith said: “The Chancellor has built a bridge for business to Spring 2021 and taken much needed steps to help firms across the UK survive this winter.
“Extending the tried and trusted Job Retention Scheme will give companies the certainty and stability they need to help safeguard thousands of jobs into March. Sectors and supply chains under the greatest strain may need more tailored support in the coming weeks."
