Chancellor Rishi Sunak talks budget and reasons for extending furlough to September

Rishi Sunak spoke to today’s Good Morning Britain of the budget, ‘no jab no entry’ discussions and self-employment support. 

Asked why furlough has been extended past the end of the roadmap, and whether he knows something we don’t, Sunak said: “The approach we took with all of our support yesterday was first and foremost to make good on the promise that we made a year ago which was do whatever it takes to support people, families, businesses through the crises and the budget set that out yesterday. Furlough extension was a part of that, you’re right, to the end of September. We did that for a couple of reasons. I wanted people to have the reassurance that we were going long, beyond the end of the roadmap, because of course things might change. We wanted to accommodate even the most cautious view of exiting the restrictions. Now hopefully that won’t happen and we’re making great progress and thanks to everyone involved in the vaccination drive for making that possible. But it’s also important to remember that just because the restrictions end, businesses will still need to take time to recover, things will take a bit of time to get back to the way they were. I think it’s important to have that extra cushion.”

He added: “It won’t be that the economy snaps back completely to as it was overnight. Businesses are still recovering, many of them have been closed for many months, it takes time for them to rebuild the strength that they had and that’s why the furlough extension is just one part of it, but also there’s lots of other things that will provide support to businesses through the year, for example cuts and discounts to their business rates, we’re giving them cash grants…”

Asked if there will be an autumn pinch for people when universal credit bonuses are no longer available, he said: “If you look at all the different things we’re doing, they all happen at different times throughout the year. The universal credit uplift has been extended in full for six months, that’s well beyond the end of this national lockdown, remember it was put in place temporarily last year when we entered the national lockdown. Obviously we’ve had restrictions for longer than we would have liked. But the national lockdown will end and the universal credit uplift will continue well beyond that through to September as well. But it’s important to remember as well, that’s just one of the things that we’re doing to help those who are on low incomes over the course of this next year and beyond.

Asked why not extend the benefit longer, he said:“That was put in place when we were in a national lockdown, obviously that’s gone on for longer than we would have liked, we are going to exit this national lockdown in the coming weeks and the universal credit uplift will be in place well beyond the end of that. 

“But what I was saying was that’s just one of the things we’re doing to support low income families, the national living wage is being increased above inflation, starting in April that’s a £350 pay rise to those who are full time on the national living wage, also, we’re providing a lot of support for those vulnerable families who need help with their rent payments through something called local housing allowance, that’s a billion pounds of extra investment next year. It will help 1.5m families, about £600 each. We’re also providing 3.5million families with £150 to help with their council tax bills and, what is really important, as the economy reopens, that we focus our attention on giving people the opportunities to get new jobs and to get better jobs. So our apprenticeship incentives, lifetime skills guarantee and the kickstart scheme, all of those billions of pounds of investment to help people get the skills they need, get good jobs and that is the right way to focus our support as the economy reopens.”

Responding to Excluded UK’s criticism of the budget, and of the suggestion of people slipping through the gaps, he said: “That’s why yesterday I was pleased that we could announce a major improvement in access to the self-employment scheme. Last year we didn’t have the tax returns from people who were newly self-employed, now that the tax return filing deadline has passed we do have those returns and that means over 600,000 more people are able to be brought into the system.”

He added: “If you take a step back and look at the sum total of our support for the self-employed over the course of this crisis, we’re going to spend over £30billion supporting those in self-employment. It will be, I think it will stand as the most generous support for self-employment of any country, anywhere in the world. I don’t think anyone can say that that isn’t comprehensive and generous.”

Asked about three million people who are said to be unable to access the support, and of benefits being based on profits, he said: “The scheme is designed to help people whose income has suffered as a result of the crisis. If you didn’t have income to start with then obviously removes a rationale for them needing support.

“Your three million figure, obviously 600,000 of those will be brought into the system as they will be newly self-employed, that is the number of new tax returns we’ve got from people in that year for that last year, so that is actually the gross number of people, they will go through the criteria of course like everybody else. But that’s a big expansion. If you look at the largest group of those people, 1.5m out of that 3m, those people are not majority self-employed. When I met with all the representatives of those self-employment groups… all of them agreed with the principle that we should target taxpayer money on those people who make the majority of their income from self-employment and actually many of those groups suggested a higher threshold of 60% or two thirds and we went with something that was more generous. We said, you just have to be majority self-employed to benefit from these generous cash grants.

“That 1.5m people who are not majority self-employed, the average self-employment income that they have is around £2,000-£3,000, so at that level, lots of the other things we would have done would have helped them and that was probably not the significant part of their earnings at that level, so I think it’s reasonable to take the approach that we have and in aggregate it will stand as a very generous and comprehensive approach.”

He added: “Important to know, if you look at the projects outlined yesterday it is forecast that we actually spend more money supporting those in self-employment than we do on the furlough scheme and I think that should give you some sense of the scale and generosity of what we’re doing.”

Asked if a ‘no jab, no entry’ policy for hospitality or employment is something he’d back, Sunak said: “That is a difficult and complicated question because it raises various practical, legal and ethical issues and we are working through those. The Prime Minister has got a committee and we’ve got an ethicist, doctors and business people working together to look at that particular question, to consider all the questions in the round and then come up with some recommendations in a few months’ time.”

Of whether it’s something he’s minded to back, he replied: “It’s too early for me to use a phrase like ‘minded to’. It’s a committee to examine the various issues that it throws up. There’s obvious challenges. Some people are not able to, for health reasons, get vaccinations, then there’s a practical aspect, how do we verify it, what kind of technology would one use, what circumstances would it be appropriate to use it. So it’s too early to say anyone’s minded to do anything, that’s quite a specific phrase, but I think it’s right that we go through all of that, just surface what the issues and benefits might be and then we can decide and make a decision in the round in the coming months”