The COVID-19 Job Support Scheme
Speaking in the House of Commons, The Chancellor outlined the Job Support Scheme and more financial help for businesses this lunchtime (24 September).
The Chancellor said the resurgence of coronavirus posed a
“threat to the fragile economic recovery”
and protecting jobs was the government’s priority through the
“difficult winter months”
All small and medium-sized businesses will be given the option to cut staff hours and pay with the government and employers paying part of the lost wages.
Large businesses will be eligible if their turnover has been affected by the Covid-19 pandemic.
The Chancellor said employees will work shorter hours rather than being made redundant. Employees must work at least a third of their contracted hours under the scheme. For the remaining hours, the government and employer will pay a third of the wages each.
This means an employee working 33% of their hours would get 77% of their salary. He said the plan would
“support viable jobs”
Employers that make us of the scheme will also be able to claim the previously announced £1,000 job retention bonus.
The measures are needed as the second wave of Covid-19 sweeps the country.
The furlough scheme introduced to prevent mass-redundancies at the start of lockdown in March is set to expire next month. Millions of workers are still receiving part of their salary through the scheme.
The self-employed will also be offered continued support on similar terms to the salary top-up scheme.
The Chancellor also outlined a “pay as you grow” scheme for businesses which have taken government-guaranteed loans during the crisis:
“Loans can now be extended from six to ten years nearly halving the average monthly repayment.”
The Chancellor has also announced improved business loan schemes and tax cuts designed to ease the cashflow pressure on firms struggling during the pandemic. In particular, the tourism and hospitality sectors will now benefit from a reduced 5% VAT rate until 31 March.
“Taken together, these measures should help ease the pressure currently being felt by businesses and workers up and down the country. However, whether it is enough to prevent a surge in unemployment as we head into winter remains to be seen.”
