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UK’s Furlough and Business Loan Schemes Extended Again

December 21, 2020

UK Chancellor Rishi Sunak announced on 17 December that the Coronavirus Job Retention Scheme (CJRS) is to be extended until 30 April 2021. This represents a further extension of one month.

The Chancellor also announced that the government’s contribution to employees’ salaries for hours not worked will remain at 80% (capped at £2,500 per month). The other eligibility criteria for the CJRS will also remain unchanged until 30 April 2021, about which more detail can be found in this LawFlash. The CJRS has paid out a portion of the salaries of nearly 10 million jobs so far from over 1 million businesses.

Further, the Chancellor revealed that the government-guaranteed coronavirus (COVID-19) business loans will be extended until the end of March 2021. These loans were originally due to stop at the end of January 2021.

The Chancellor had indicated in a previous statement in early November 2020 that a decision regarding any extension to the CJRS would be made in January 2021. This latest announcement was, therefore, unexpected. He said that these measures had been revealed now to provide “certainty and clarity” for affected businesses ahead of the new year. The Chancellor’s announcement coincides with further changes to the “tier” allocations across the regions of England, with a general picture of tighter restrictions across the country particularly because of the new variant of COVID-19 primarily affecting London and the South East of England. This is likely to put even greater strain on many employers and employees, particularly those in the hospitality, travel, and leisure sector. Wales, Scotland, and Northern Ireland operate their own independent rules for coronavirus-related restrictions.

Finally, the UK budget has been confirmed for 3 March 2021, in which the government will set out future plans to support business and employees. This means that, for those employers considering making 20 or more positions redundant, they will have time to consider any further support offered in the budget before confirming any redundancies and consulting with employees (with minimum statutory consultation periods of 30 days for 20 to 99 redundancies and 45 days for 100 or more redundancies).

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Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

London
Matthew Howse
Pulina Whitaker
Lee Harding
Louise Skinner