Chancellor Rishi Sunak has announced that the furlough scheme for employers and the business rates holiday for commercial property occupants in England are both to be extended while the Covid-19 crisis goes on.
The furlough scheme, which sees the Treasury contributing to the wages of people who cannot work as normal because of coronavirus, is to remain in place until the end of September.
That support is designed to ensure employees can continue to receive a close-to-normal income and get by even if they cannot work their normal hours because of the Covid situation.
Mr Sunak explained though that an increased percentage of those wages will need to be paid by employers as the country and the economy begins to reopen over the summer.
“As businesses reopen, we’ll ask them to contribute alongside the taxpayer to the cost of paying their employees,” the chancellor told MPs during his Budget speech in Westminster on March 3.
“Nothing will change until July, when we will ask for a small contribution of just 10 per cent and 20 per cent in August and September,” he said.
More than 11 million people have been furloughed and had some portion of their wages supported by the government at some point since the beginning of the virus crisis back in March 2020.
News that the 100 per cent business rates holiday offer is to be extended to the end of June as well will be welcomed by occupants of commercial properties in England who will have one less financial burden to bear for now at least.
The offer of a business rates holiday is designed particularly to benefit retailers, as well as hospitality and leisure sector operators, many of which have been under severe financial pressure since the start of the pandemic.
Non-essential retailers have also been promised access to “restart” grants worth £6,000 to help them get back on their feet once the economy is reopened and lockdown restrictions are loosened.
The British Retail Consortium has welcomed announcements of financial support for businesses made within the Chancellor’s Budget speech but noted too that government-backed “recovery loans” will be crucial for many thousands of retailers currently facing very tough cash flow challenges.
Meanwhile, the Federation of Small Businesses (FSB) has said the government will need to find new ways to positively support jobs growth in the coming months but also welcomed the package of measures promised to SMEs.
“Thousands of small businesses are on the brink of collapse and thousands more are suffering from low confidence as cash reserves dwindle,” noted Mike Cherry from the FSB in a statement.
“They will welcome both the extension of flagship support schemes that have kept them going over the hardest year they have ever faced, as well as confirmation of new support measures around taxation, employment and cash grants.”