Chancellor Rishi Sunak is expected to announce a further extension to the government’s furlough scheme until May in his Budget speech next week.
The paper also cites government sources that following the May extension, the scheme will begin to be gradually wound down. It is thought that Sunak is also looking to reinstate a scheme that will see a one-off payment given to businesses that bring back furloughed workers.
The latest furlough figures from the ONS showed that furloughing of staff in the wholesale and retail sector peaked on 24 April at 1.9 million furloughed. This dropped to 356,400 employments furloughed at 31 October. The number of people furloughed then increased in November to 739,400 at 30 November. Provisional figures show that by the end of December this had decreased to 689,500 people currently placed on furlough.
The news comes after it was reported earlier this week that the chancellor was also planning to raise corporation tax in the upcoming budget to pay off the estimated £400bn borrowed by the UK throughout the pandemic.
However, it is believed the Sunak sees the decision as a “matter of fairness”, with the chancellor holding the view that companies have benefited from millions of taxpayer support throughout the ongoing crisis.
Sunak, who was the brains behind business rates relief and other Covid aid, has reportedly told Treasury officials that a rise in corporation tax would still allow Britain to hold a competitive position with other G7 countries. Currently corporation tax is set at 19%.