Furlough extension a step forward but more needed before pro-business Budget, says FSB

  • 21 Dec 2020

The furlough scheme has been extended until the end of April 2021 with the government continuing to contribute 80% towards wages, the Chancellor has announced.

In a move to ensure firms can access the support they need through continuing economic disruption, Rishi Sunak also confirmed he would be extending the government-guaranteed Covid-19 business loan schemes until the end of March.

These changes come ahead of the Budget, which the Chancellor has confirmed will take place on 3 March 2021.


FSB National Chair Mike Cherry said: “Small businesses are facing one of the bleakest winters on record, so extending full, flexible furlough to the end of April is a positive move as they try to navigate a tougher than normal January and February. This is in line with when people are due their fourth self-employed income support grant.

“However, while helpful, furlough does not reduce the cost per hour of employing someone still working and does not protect against the huge range of other fixed costs threatening to push them under before restrictions are lifted.

“It is reassuring to see the extension of the emergency loan application window, giving the Government the breathing room it needs to work with the banks and FSB on creating a successor scheme that is ambitious in scope and accessible to small businesses – not just larger firms.

“The Government must also review a number of other urgent priorities before its March 2021 budget. The newly self-employed, owner directors and suppliers are facing the bleakest of winters, but FSB’s proposals to create a new Director Income Support Scheme (DISS) could allay some of their immediate anxieties.


“To promote job retention and creation, the Government should look at firms who are able to recruit by lowering national insurance costs or by expanding the Kickstart scheme to more vulnerable groups.

“It’s been the opposite of a pro-business year and there’s never been a more important time for the Chancellor to deliver a pro-business, pro-growth budget in 2021 – one which doesn’t create new costs for businesses just as they’re trying to get back on their feet, but instead charts a course to economic recovery.”

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