MPs call for targeted extensions to job furlough scheme

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Targeted job furlough scheme
PREFERRED OPTION: Chancellor Rishi Sunak had expressed the view a job retention bonus scheme is the way forward rather than prolonging furloughs CREDIT: Rishi Sunak Twitter @RishiSunak

MPs have called on Chancellor Rishi Sunak to think about certain extensions to the UK’s job furlough scheme due to end next month.

“The chancellor should carefully consider whether a targeted extension of the Coronavirus Job Retention Scheme and/or other targeted support measures might be required and explain his conclusions”, the Treasury Select Committee recommends in its second report on the economic effects of the Covid-19 crisis.

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Sunak has so far at made it clear that rather than prolong the furlough initiative his preferred option is the job retention bonus.

This is whereby companies would receive a one-off £1,000 payment for every employee they take back on who they previously claimed for under the scheme, and who remain continuously employed until the end of January next year.

The committee is however of the view that it is not clear whether the job retention bonus is “good value for money as it’s not effectively targeted”, and says furlough support should continue to help businesses which stand a good chance of successfully coming out the other side of the Covid-19 pandemic crisis or risk mass long-term unemployment.


“The key will be assisting those businesses who, with additional support, can come through the crisis as sustainable enterprises, rather than focusing on those that will unfortunately just not be viable in the changed post-crisis economy,” commented the committee chair, Tory MP Mel Stride.

“This requires a very difficult set of judgements; it is where careful analysis and creative thinking will be critical”, Stride commented.


“As the committee has said throughout the crisis, the chancellor must continue to show flexibility in his approach.

“We hope that the Treasury’s unwillingness to implement the recommendations from our first report is not a sign of how it will respond to this one”, he added.

The furlough scheme had supported the jobs of more than nine million people at some stage during the pandemic.

Workers in sectors like hospitality and entertainment have been particularly reliant on the programme.

To date the scheme has cost the UK government somewhere in the regions of £35 billion.

A further recommendation to the chancellor in the select committee report, which focuses on challenges which arise as lockdown restrictions are lifted, include not being too quick to raise taxes, maintaining this could “stifle economic recovery.”

The committee also expressed concerns about the level of debt of firms which have taken out Covid-19 support loans.




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