A new emergency jobs scheme will be introduced to protect jobs during the coronavirus (COVID-19) downturn this winter, Chancellor Rishi Sunak has announced.
The Jobs Support Scheme, which will replace the furlough scheme when it ends on 31 October, will see workers get up to 77% of their normal salaries for six months.
It aims to stop mass job cuts after the government introduced new measures in its Winter Economy Plan to tackle coronavirus.
The Chancellor said that employees will have to be working for at least a third of their normal hours to qualify for the new scheme, which begins on 1st November.
Between them, the government and the employer will then cover part of their salary for the remaining hours not worked. The government will cover a third of this sum, capped at £697.92 per month, while firms cover a further third.
The Jobs Support Scheme is designed to sit alongside the Job Retention Bonus.
In addition, the government is extending the Self Employment Income Support Scheme Grant (SEISS). A third grant will cover three months’ worth of profits for the period from November to the end of January 2021. This will be worth 20% of average monthly profits, up to a total of £1,875.
Mr Sunak also announced that businesses that have borrowed money through the government’s coronavirus loan schemes will be given more time to repay the money.
Additionally, a VAT cut for hospitality and tourism companies will also be extended until March. The cut from 20% to 5% – which came into force on 15 July – had been due to expire on 12 January next year.
Mr Sunak said: ‘The resurgence of the virus, and the measures we need to take in response, pose a threat to our fragile economic recovery. Our approach to the next phase of support must be different to that which came before.
‘The primary goal of our economic policy remains unchanged – to support people’s jobs – but the way we achieve that must evolve.’