Rishi Sunak’s furlough plan is brilliant but the delay and dither has cost thousands of jobs

On the day the Bank of England forecast unemployment would hit nearly 8%, there’s only one response to Rishi Sunak’s decision to extend furlough to March: about time.

The number of people facing redundancy as lockdowns spread from hospitality firms and retailers to the accountants, lawyers and others who service them is spiraling by the day.

The furlough scheme was brilliantly devised by the chancellor in the Spring and implemented skillfully on the fly. 

But the guidance he gave the country when it approached the end of its allotted time was abysmal.

Rather than take stock of the virus’s persistent spread in early autumn and extend the scheme then, he pressed on with the line that furlough had to finish on October 31.

The consistency of that message led employers to plan for the cut-off accordingly. 

Where Covid lockdowns were making it impossible to resume their operations, they shed their furloughed staff.

Each redundancy was a tragedy for those laid off and a costly upheaval for employers spending much-needed cash on redundancy pay.

Then, as the new lockdown was declared at the weekend, they were told the furlough scheme was being extended by a month after all.

“Huh?” came the collective response. “But we just…”

The dithering as October 31 approached undoubtedly cost thousands of jobs that could have been saved.

I say “thousands” rather than “hundreds of thousands” because last weekend’s extension, timed only to cover the four week lockdown that started today, was far too limited to make a vast difference to employers.

Why? Because nobody seriously thinks that, when the current closures and work-from-home rules end in a month, we’ll go back to normal.

We all know we’ll be in for tier 3 or tier 2 misery to Christmas and into Spring. So a one-month respite for furlough payments was never going to make much of a difference to employers’ staffing plans

Today’s extension to March from the Chancellor is a recognition of that.