Chancellor unveils new job and freelance support schemes set to begin after furlough system ends
The scheme will help, according to the Chancellor, save 'viable' jobs
The Chancellor Rishi Sunak has unveiled a new package of financial support systems to help companies weather a winter with coronavirus.
While the furlough scheme will not be extended past the previously stated end of October deadline, Chancellor Rishi Sunak has revealed a new "Job Support Scheme" to help "viable" jobs.
According to the Chancellor's new system, "employees must work at least one-third of their normal hours and be paid for that work by their employers." Their pay will then be bolstered by equal contributions from both employers and the government, as per the infographic by the Treasury below.
From 1 November, for the next six months, the Job Support Scheme will protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19. pic.twitter.com/8NpIKpQV8y— HM Treasury (@hmtreasury) September 24, 2020
Under this system, if an employee works for a minimum of 33 per cent of their hours, they will be paid for that time. The employer will then have to provide a further percentage of the employee's wage, which is then matched by the government.
The scheme is open to all small- and medium-sized businesses as well as large businesses that can prove they have suffered losses during the pandemic. It will run for six months from November. Sunak did, however, warn that: ""I cannot save every business. Or every job."
What defines a "viable' job is a loose term, as jobs that may not be viable in the immediate sense may certainly be so by the beginning of 2021.
In other news, the self-employment scheme will be extended in line with the new job support scheme, though it is uncertain whether or not the scheme will help those that have previously not been given funds. As it stands, those who are unsupported by these schemes will remain unsupported. The scheme will now cover 20 per cent of average monthly trading profits via a grant.
Sunak added that the "resurgence of the virus...poses a threat to fragile economic recovery. Our task is to move to the next stage. Nurture the economy by protecting jobs." He stated bluntly that it is "fundamentally wrong to hold people in jobs that only exist within the furlough".
The Chancellor will also provide an extended VAT cut (from 20 per cent to five per cent) for the hospitality and tourism sectors and will extend loan repayment dates. Tax bills can now be spread over 11 smaller repayments without interest.
Shadow Chancellor Anneliese Dodds fired back at Sunak on his awful timing: "The delay in introducing this new scheme will have impacted on business confidence." Many theatres have already made large-scale redundancies, with the Lyric Hammersmith Theatre in west London only the latest venue making cuts. Dodds went on: "The deadline for redundancy consultations for large firms came and went last week with our government doing nothing."