Furlough scheme extension will cost £7billion as huge economy impact of ...

The Government's extension of the furlough scheme to cover worker wages during the new lockdown will cost £7 billion, MailOnline understands.

As Boris Johnson last night pledged to extend payments at 80% to December, the impact on Britain's already crippled economy emerged, with one expert claiming the new rules will cost £1.8billion each day.

The Prime Minister told a Downing Street press conference that he was sorry about the hardship that businesses have already endured this year.

He said: 'That's why we are going to extend the furlough system through November. The furlough scheme was a success in the spring and supported people in businesses in a critical time. We will not end it, we will extend furlough until December.'

As Boris Johnson last night pledged to extend payments at 80% to December, the impact on Britain's already crippled economy emerged, with one expert claiming the new rules will cost £1.8billion each day

As Boris Johnson last night pledged to extend payments at 80% to December, the impact on Britain's already crippled economy emerged, with one expert claiming the new rules will cost £1.8billion each day

It will have some differences to March in that these measures will be 'time-limited', starting on November 5 and ending on December 2.

This is when the Government will seek to 'ease restrictions' and go back into the tiered system.

Non-essential retail and hospitality services will be forced to close, while schools stay open during the four-week lockdown.

It means that pubs, cafes, restaurants will shut except for takeaway and delivery services.

The Government said the extended furlough scheme will see employees receive 80% of their current salary for hours not worked, up to a maximum of £2,500.

Treasury confirms grants available for businesses which are forced to close 

The Treasury announced that, alongside the extension of the furlough scheme, businesses which are forced to close in England can receive grants of up to £3,000 per month, while local authorities will be given £1.1 billion for one-off payments to firms in their areas.

Homeowners will also be able to take the option of mortgage payment holidays, which had been due to end on Saturday but have been extended.

Chancellor Rishi Sunak said: 'Over the past eight months of this crisis we have helped millions of people to continue to provide for their families. But now - along with many other countries around the world - we face a tough winter ahead.

'I have always said that we will do whatever it takes as the situation evolves. Now, as restrictions get tougher, we are taking steps to provide further financial support to protect jobs and businesses. These changes will provide a vital safety net for people across the UK.'

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Chancellor Rishi Sunak hoped that the furlough scheme, along with a number of changes to support measures would provide 'a vital safety net' for people across the UK who are about to face a tough winter.

However, such levels of support only add to Britain's already crippling levels of debt. 

It emerged earlier in the pandemic that the PM had borrowed more in five months to tackle coronavirus than the Government did in the entire year after the 2008 financial crash.

The bruising economic fallout of the pandemic was laid bare by the Office for Budget Responsibility (OBR) as the UK's national debt surpassed £2trillion. 

In in a bleak 10-page analysis of the state of the public sector finances, the OBR underscored how deep the nation had plunged into the red.

From April to August this year net borrowing ballooned beyond £173billion as the Chancellor bankrolled furloughed employees' wages and handed rescue loans for businesses. 

After Mr Johnson plunged the nation back into a full lockdown, one economist predicted a devastating impact to the tune of £1.8 billion ever day, with restrictions likely to see office parties cancelled and festive spending plummeting. 

Prof Douglas McWilliams, founder of the Centre for Economics and Business Research, told the Sun: I'm afraid it's going to be a bleak Christmas for the economy and it will have devastating effects.

'The retail sector will be particularly hard hit as sales are about 50 per cent

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