The government has extended the furlough scheme until the end of June.
Chancellor Rishi Sunak said the scheme would remain under review as he extended it until at least the end of June as employees are forced to stay at home to slow the spread of coronavirus.
It allows employees to get 80 per cent of their salaries up to a maximum of £2,500 a month.
‘It is vital for people’s livelihoods that the UK economy gets up and running again when it is safe to do so, and I will continue to review the scheme so it is supporting our recovery,’ Mr Sunak said.
Businesses and unions broadly welcomed the Chancellor’s announcement.
Trade bodies and business groups said the government must now ensure the application scheme’s launch on Monday must be quick and easy, allowing for speedy access to the cash to pay staff.
Unions said there would now be ‘no reason’ for redundancies, but also called on ministers to ensure workers are protected longer-term during a recovery.
Dame Carolyn Fairbairn, CBI director-general, said the government deserve credit for the decision, which she said would ‘help protect the economy and prevent unnecessary job losses through this new lockdown phase’.
And Mike Cherry, national chairman at the Federation of Small Businesses (FSB), said it would be important for businesses to access the payments quickly once applications launch.
He said: ‘With revenues drying up completely over the past three weeks, thousands of small employers have had to pay March’s payroll out of their own pockets.
‘The retention scheme must pay out swiftly. Until now, the only means to easing the cashflow crunch for many small firms has been the, to date, lacklustre coronavirus business interruption loan initiative. Small business all over the country are on the brink today. They need cash now.’
Unite general secretary Len McCluskey said he was hugely relieved to hear the decision and thanked the government.
He added: ‘Yes, there have been gaps and teething troubles, but the fact that employers were told that the state would stand behind their employment costs if they stand behind their workers has helped stave off mass unemployment.
‘With this clear statement from the Chancellor that the furlough scheme will not be withdrawn in the coming weeks, our appeal now is to employers to do the right thing by your workers. Turn to this scheme, keep people safe and keep workers in their jobs until they can return to work.’
In today’s Car Dealer Live broadcast, experts from UHY Young Hacker discussed the furlough scheme and how it affects car dealers in detail. You can watch it below.