Published on Tuesday, April 14, 2020

Chancellor promises furlough scheme will be up and running by end of month

Chancellor Rishi Sunak has promised the furlough scheme set up by the Government to help companies during the coronavirus lockdown will be up and running by the end of the month.

At Tuesday's press briefing, the Chancellor said the system is currently being tested and will be open to applications on April 20. After that, payments will be made within 'several days'.

He also said he was investigating the possibility of underwriting 100% of the money made available for small companies under the Government's emergency loan scheme, and said the number of grants being made to small businesses is increasing.

He was responding to criticism that measures the Government has put in place are not happening quickly enough, amid fears many companies will manage to pay staff their April wages but will struggle to survive after that.

Business groups have said companies will have to decide by April 18 whether they will be able to keep workers on their payroll beyond the end of May.

Under the furlough scheme, the Government will cover 80% of wages, up to a maximum of £2,500, for workers who have been temporarily laid off.

Sunak said: "We have never had anything like this in the UK before. We had to build a brand-new system from scratch. I have always said the scheme will be up and running by the end of April. That is where I am.

"At the moment we are on track to deliver that. The system is built. We are in the process of testing it will small groups of employers at the moment. The working assumption is that it will open on April 20 for applications and then there is a period of several days between submission and application and receiving the cash."

He said all applications will be subject to fraud checks before any cash is released.

Referring to grants available to to small businesses, the Chancellor said: "That money has left central government and gone to local government to administer to those grant schemes. A third has already been dispersed to business, about £3-£4 billion, but there is still more to go

"I spoke to the local government secretary of state about that and he is intensifying his efforts to make sure we can get that money out there as quickly as possible."

On the subject of small business loans, he said: "There has been enormous improvement from where we were.

"At the end of the week before last, about 1,000 loans had been issued. That number is now up, I think four times, to the end of last week. The amount in terms of millions of pounds that have gone out the door is, I think, five times.

"Changes we made are making a difference. I'm grateful to all the bank staff who have worked over the Easter weekend to work through the backlog."

The furlough scheme is initially available to businesses for the months of March, April and May.

Sunak said he would look to other countries to see if the Government could 'learn and improve' on the new small business loan scheme, which provides interest-free loans that are 80% guaranteed by the state.

Former Chancellor George Osborne, among others, has called for the Government to follow schemes in Switzerland and Germany, where the state guarantees 100% of the loan.

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