UK Businesses Urge Government to Extend COVID-19 Furlough Scheme

Pedestrians walk along an empty shopping street in Leeds, northern England, on Jan. 6, 2021, on the second day of Britain's national lockdown to combat the spread of COVID-19. Oli Scarff /AFP via Getty Images

The UK government should extend its business support measures before the next budget to help firms through the ongoing CCP virus lockdown, a leading British business group said on Tuesday.

In a letter to Rishi Sunak, the chancellor of the Exchequer, the Confederation of British Industry (CBI) urged the government to extend the Job Retention Scheme to the end of June, give firms more time to pay VAT bills, and extend the business rates holiday.

CBI Director-General Tony Danker said that the government’s support measures have “protected many jobs and livelihoods.”

“But almost a year of disrupted demand and extensive restrictions to company operations is taking its toll. Staff morale has taken a hit. And business resilience has hit a sobering new low.”

He urged the government to “stand shoulder-to-shoulder with businesses” and help viable enterprises survive the lockdown.

Noting that “many tough decisions for business owners on jobs, or even whether to carry on, will be made in the next few weeks,” Danker urged the government to take action before the next budget, which is still more than six weeks away.

On Jan. 6, Prime Minister Boris Johnson put the whole of England under a new national lockdown, ditching the local tiered system, which he said had failed to hold back a surge of a new variant of the CCP (Chinese Communist Party) virus.

Under the new lockdown, people are instructed to work from home unless it is impossible for them to do so. All hospitality venues must remain closed as well as non-essential shops.

Lockdown measures are also in place in Scotland, Wales, and Northern Ireland.

The UK government has spent hundreds of billions of pounds on its response to the CCP virus pandemic, including the furlough scheme, support for the self-employed, tax cuts, and extra funding for schools and local councils.

Even before the latest national lockdown was announced, the UK’s public borrowing for the current financial year was forecast to reach record levels in peacetime.

Sunak said last November that the UK will soon see the “economic shock laid bare” and that the country cannot sustain record levels of public borrowing in its attempt to deal with the consequences of the pandemic.

Simon Veazey contributed to this report.