Earlier this month, England entered into a second national lockdown in a bid to curb the rising coronavirus cases. But while the lockdown is set to last just four weeks, Chancellor Rishi Sunak has extended the furlough scheme across the whole of the UK until March.
The scheme – also known as the Coronavirus Job Retention scheme (CJRS) – will see employees receiving 80 percent of their current salary for hours not working due to the virus and lockdowns.
Mr Sunak also announced support for millions of self-employed workers with another grant covering November to January.
However, the extension of the furlough scheme has been criticised by economist due to the country entering its worst ever recession.
Now Richard Skellet, founder of Charity Digital Anthropology, has revealed the UK Government will have spent twice as much on the furlough scheme compared to Germany.
Economist blasts Rishi’s extension of furlough (Image: Getty)
Thousands of businesses forced to close again (Image: Getty)
Speaking to Express.co.uk, Mr Skellett said: “Furlough, from day one, saw employees at home, paid for doing nothing at enormous costs to the taxpayer but also at enormous costs to our competitive advantage against the likes of Germany, who already had their Kurzarbeit scheme.
“The German scheme allowed short hours working to support businesses to keep going.
“In comparison with the UK’s furlough, the cost of Kurzarbeit is much less, with their Government investing €23.5bn into the scheme at the start of the pandemic, expanding in August to the end of 2021 at an estimated cost of €10bn.
“By comparison, the UK’s furlough scheme will have cost £60bn, about twice as much as the Germans are spending.
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Chancellor Rishi Sunak to extend furlough scheme (Image: Getty)
“The German economy has contracted by 9.7 percent in the second quarter of 2020, much lower than the UK which has seen a 20.4 percent drop.”
Mr Skellett also claimed the Government’s loan scheme “is not working” and has not been working since the first lockdown in March.
He continued: “Additionally, we have stifled flexibility in workforces through implementation of IR35, lack of support to SME’s and the fact that the UK Government’s coronavirus loan scheme is not working and hasn’t been since it was introduced in March.
“Most companies haven’t been able to secure anywhere close to the 25 percent of revenue promised.
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What is furlough? (Image: Express)
“This is because the Government passed the buck to the banks to make the decisions instead of doing the same as Germany, where the government took the responsibility away from the banks.”
During the initial outbreak of the virus, Germany managed to curb the infection rate but have – like the rest of the world – recently recorded a higher number of cases.
But Mr Skellett argued the UK has “lost the competitive edge” against Angela Merkel’s state.
He said: “We have already lost the competitive edge especially to Germany.
Businesses forced too close again during lockdown (Image: Getty)
“We should have been focusing our efforts on working with companies to help them in the challenges ahead regarding Brexit.
“The UK Government are handicapping business through legislation and the way it has handled both furlough and the coronavirus land scheme.”
When announcing the furlough extension Mr Sunak said: “I’ve always said I would do whatever it takes to protect jobs and livelihoods across the UK – and that has meant adapting our support as the path of the virus has changed.
“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.
London deserted during lockdown (Image: PA)
“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.”
On top of the furlough extension, the Government also announced cash grants of up to £3,000 per month for closed businesses.
Around £1.1bn is expected to be given to local authorities and there are plans to extend the existing government-backed loan schemes.
There will also be an extension to the mortgage payment holiday for homeowners as well as up to £500 million of funding for councils.
