Job Support Scheme set up to protect UK workers

Chancellor Rishi Sunak has announced the setting up of a Job Support Scheme.

Thursday, 24th September 2020, 3:36 pm
Rishi Sunak

The "top up" scheme will run for six months and will effectively replace the furlough scheme from October 31.

Mr Sunak made the announcement in the Commons this afternoon.

Mr Sunak said a new job support scheme would see the Government “directly support” the wages of people in viable jobs working at least a third of their normal hours.

Workers will be paid for that work as normal, with the state and employers then increasing those wages to cover two thirds of the pay they have lost by working reduced hours.

The Job Support Scheme will give businesses who face depressed winter demand the option of keeping employees in a job on shorter hours rather than making them redundant.

The government had been under mounting pressure to extend its furlough scheme, which has maintained millions of jobs.

The Coronavirus Job Retention Scheme was introduced in March and paid 80 per cent of the wages of workers placed on leave, up to a maximum of £2,500 a month.

Since then, employers of furloughed workers have been asked to pay a contribution.

Other announcements by Mr Sunak included:

*Bounce Back Loans repayment period extended to 10 years

*CBILS loans guarantee also extended to 10 years

*Self assessed tax bills can be paid over 12 months

*VAT rate for hospitality and tourism will stay at five per cent.

Dame Carolyn Fairbairn, CBI Director-General, said: “These bold steps from the Treasury will save hundreds of thousands of viable jobs this winter.

"It is right to target help on jobs with a future, but can only be part-time while demand remains flat.

"This is how skills and jobs can be preserved to enable a fast recovery.

“Wage support, tax deferrals and help for the self-employed will reduce the scarring effect of unnecessary job losses as the UK tackles the virus. Further business rates relief should remain on the table.

“Employers will apply the same spirit of creativity, seizing every opportunity to retrain and upskill their workers.

“The Chancellor has listened to evidence from business and unions, acting decisively. It is this spirit of agility and collaboration that will help make 2021 a year of growth and renewal.”

Mr Sunak delivered his plans in the House of Commons, but Prime Minister Boris Johnson was not there to support him as he was visiting police recruits in Northamptonshire.

Babs Murphy, Chief Executive of the North & Western Lancashire Chamber of Commerce said “These measures announced today will give business and the economy an important boost.

"We have persistently called for additional support to help businesses who are under intense financial pressures to keep their businesses afloat.

“We are delighted that the Chancellor has responded with a significant package of measures that will go some way to help our business community to safeguard jobs as they head into a challenging period ahead.

"His announcement will mean that many firms will be able to hold on to valued employees. Clearly we are anxious to see the detailed small print of these headline announcements.

“However the government must remain open to taking additional action if necessary to support parts of the economy facing unprecedented challenges."

Federation of Small Businesses National Chairman Mike Cherry, said: “There are many measures to welcome here that will make a real difference. It’s particularly encouraging to see that all small businesses will be able to access the new job support scheme without facing excessive paperwork, with a guarantee of help for the next six months."

“On the tax side, the greater space being promised on deferrals and the maintenance of the five per cent VAT rate for hard hit sectors are much needed, promising to shore-up demand for firms that are especially struggling."

Mr Cherry added: “We are concerned that the Chancellor had nothing to say today on support for those who were left out of the first round of support measures, not least the newly self-employed and company directors.

"The Government urgently needs to come forward with an emergency relief package for these groups which have dutifully paid their taxes and deserve help too."

John Phillips, Acting General Secretary of the GMB, said: “Whether this is enough to stave off widespread redundancies depends very much on the detail, and it will be judged not just on jobs but on people’s living standards and ability to pay the bills.

“GMB is calling on all employers who have redundancies planned to halt those processes and reassess based on this announcement.

"If bosses won’t do that, the Government must step in."

The Institute for Fiscal Studies said: "This is a much less generous scheme than the furlough scheme which it is replacing.

"It will also be much cheaper ."