The announcement that the furlough scheme would be extended into March 2021 came as a huge relief to some, while provoking worry in others that this means we will be in lockdown until next year.
So will we be in lockdown until March 2021? Naturally it all depends on whether lockdown 2 is working, but rumours over an extension to the lockdown have continued since the restrictions were first announced, with many believing that the lockdown will be extended over Christmas at least.
Chancellor Rishi Sunak announced the plans to extend furlough on November 5 as confirmation that he would do “whatever it takes to protect jobs and livelihoods across the UK”. He didn’t say, however, whether this explicitly meant that the UK should start preparing for the government’s rules and lockdown shop closures to last way into the spring.
Furlough was issued to protect 9.6 million jobs earlier this year, before it was due to come to an end in October, as many hospitality venues and other businesses were starting to get back on their feet. Although restrictions started lifting largely in July with pubs and restaurants, hairdressers, barbers and the like reopening their doors fully to customers, the scheme continued into the winter to support the gradual return.
So is that what’s going on here again? Or is the long extension of the furlough scheme the first sign that the UK is set to take another long lockdown?
Will we be in lockdown until March 2021?
The government has said that the lockdown won’t be lasting any longer than until December 2, with Prime Minister Boris Johnson confirming both publicly and privately that the short lockdown should be enough to quell the surge in coronavirus in England.
He told parliament that the restrictions, which sees all non-essential retail closed and rules on exercise outlined, that the lockdown would “end automatically on December 2”.
And followed up by saying, ““We will then, I hope very much, be able to get this country going again, to get businesses, to get shops open again in the run up to Christmas,”
Naturally, this wouldn’t include those still under the UK self-isolation rules as this will continue long into next year and potentially until there is a longer term plan for quelling coronavirus, such as a vaccine or properly functioning test and trace system.
Rishi Sunak’s statement on furlough seems to support this idea as the chancellor said, “It’s clear the economic effects are much longer lasting for businesses than the duration of any restrictions, which is why we have decided to go further with our support.
“Extending furlough and increasing our support for the self-employed will protect millions of jobs and give people and businesses the certainty they need over what will be a difficult winter.”
This would suggest that the furlough scheme is up and running until March 2021 to carry businesses through the next few months and help them with any challenges in re-opening after the month-long lockdown.
Sidonie Warren is the founder of boutique paper shops, Papersmiths, and agrees with this idea. “I believe the extension is the government’s way to give business owners the support to keep people in jobs regardless of lockdowns or rate of recovery. And it’s probably a long enough period for businesses to think it’s worth delaying or changing their mind on redundancies they’ve made or were about to. I do think there will continue to be local restrictions until there’s a vaccine, and furlough will support the businesses and people through those restrictions.”
But other experts, namely those in medicine and others in business, seem to think differently.
As the government announced their three tier lockdown system and London promptly moved up into tier two, Gary Marlowe, chair of the BMA’s London region council said in the BMJ that local health services were already “buckling under the pressure” of Covid-19 in hospitals and that “stemming the rise of infection rates through a circuit breaker or temporary lockdown is a necessary step.”
He added, however, that the most important thing was having a plan for when lockdown measures were lifted as people “cannot live in a never ending tier 3.”
“After months of empty promises and confusion, we also urgently need the government to get its act together and finally deliver a fit-for-purpose test, trace, and isolate system and vastly improved public health messaging to help everyone, from all our communities, mitigate against the risks and prevent the spread of Covid.”
This, along with other medical experts’ testimonies, suggests that we’ll keep having national or circuit breaker lockdowns until either a successful vaccine is rolled out or there is an effective, fully functioning test and trace system.
“We are all fatigued by this virus and weary of adjusting our lives around Covid-19, but I believe we have no other choice than to move back into a national lockdown.” Professor Sir Robert Lechler PMedSci, President of the Academy of Medical Sciences, says. “All of the evidence points towards this being the only step we can take together to prevent the high number of deaths predicted.
“A national lockdown will buy us some time to get back on track and bring the R number down. It will not be a complete fix, but it is a crucial way for us to regain control, regroup and develop further interventions.”
While those in business have pointed to the extension of the furlough scheme as one of the biggest indicators that lockdowns might continue, but with breaks between them. As leading hospitality experts Maincourse tell GoodtoKnow, “England’s national lockdown is expected to run until 2nd December however most think it will be at least another 4 weeks beyond that.”
“Effectively this has pole-axed any hopes of a good Christmas for the Retail and Hospitality sectors, and some think that the Furlough Scheme extension to March implies that a lockdown even longer than that is expected.
“This is not necessarily the case as we know coronaviruses proliferate seasonally, and HMG [Her Majesty’s Government] may be anticipating sporadic lock downs over the winter, or just a very quiet quarter 1 of 2021 without significant lock downs. This may then entail paying workers flexibly for the lower hours that they work, and getting support for the hours contracted but not worked.”
If we do stay in lockdown until March 2021, however, it’s not only big businesses like Sainsbury’s (who recently announced they were cutting 3,500 jobs) that will suffer. Smaller businesses are already concerned that a long lockdown will hold them back.
Sidonie Warren of Papersmiths says that furlough is undoubtedly positive for her team, as it means their jobs are protected and as soon as shops are allowed to reopen, her team will be back in action. But she adds, “The lockdown falling at the time of year when we generate 80% of our profits is a blow.
“The only downside to the furlough extension is that it sounds like there may be a delay to the Coronavirus Job Retention bonuses. I create a weekly cashflow forecast for our business using the accounting software Xero. I regularly update it with changes in our revenue and news on the various levels of government support. And I was counting on Job Retention bonuses, which provide cash grants to small businesses who bring furloughed employees back to work, coming into our bank account in January. It looks like that support will be delayed until the end of the furlough scheme, as late as April, which is a hit to our cash-flow.
“I’m hopeful that I can convert enough of our bricks-and-mortar customers into online customers for this festive season to see us through!”
So while it’s impossible to say that lockdown will continue until March 2021, those in medicine, business and finance seem to believe that the extension of the furlough scheme is the government’s way of preparing for whatever might come our way. Coronavirus is worse than the flu and there is currently the Pfizer vaccine showing good results, but that doesn’t necessarily mean that we won’t be facing lockdowns into next year.
What is the new government furlough scheme?
When it was first launched in March, the government subsidised 80 per cent of the pay for those that were unable to go to work. This is set to be the same this time around, explains Anthony Morrow, CEO and co-founder of Open Money, “From an employee’s point of view, they won’t see any difference to their pay with them still receiving 80% of their salary [in the second lockdown].”
“It’s become more generous from an employers perspective with Government paying the full 80% and employers only having to pay pension and NIC.”
Anthony says that employees can be furloughed regardless of their employment status so anyone unable to work during the second lockdown, whether they are full time, part-time or work for an agency, will be eligible as long as they were on the payroll from October 30.
He even says that those on furlough can take on other jobs, “as long as it doesn’t breach their existing contract.”
“My view is that the Chancellor is wanting to give employees and employers a decent level of security so pushing this out for five months does that. It will remove some anxiety over the Christmas period and obviously, it will avoid chopping and changing if we don’t come out of lockdown as planned in December, or if there is a move to localised lockdowns over the coming months.
“As a measure of support for both businesses and workforce, furlough is a really useful tool to bring a level of security to avoid huge job losses and business failures which politically is really tough to deal with.
He adds, “I think it’s essential within lockdown as there needs to be protection for people not feeling as though they have to go to work and break rules. This is one of the problems with track & trace and self-isolation – it can only work if people are comfortable in doing it from a financial point of view.”