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Business

Chancellor unveils Job Support Scheme

UK Chancellor of the Exchequer Rishi Sunak has set out a series of new measures to support businesses amid the ongoing novel coronavirus (Covid-19) pandemic, including a replacement for the furlough scheme.

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Chancellor Rishi Sunak had been under pressure to extend the furlough scheme

Businesses, trade groups and other organisations had raised concerns about the end of the furlough scheme next month, with fears that the abrupt end to the initiative could lead to mass job losses.

However, Sunak moved to ally fears by announcing the Job Support Scheme, a new initiative designed to help protect viable jobs.

The scheme, which will begin in November and run for six months, will see the government again support companies in paying the wages of staff, but under different terms to the furlough scheme, which has so far cost the taxpayer £39.3bn.

Companies will have the option to bring back furloughed staff on less hours than previously.

These staff will be required to work at least one third of their usual hours and the company to pay them for this work, while the government and employer will each pay a third of the wages for the other hours they do not work. Government support will be capped at £697.92 per month.

The scheme will be open to businesses of all sizes, but for larger companies, it will only be available if the firm can show its turnover has fallen during the Covid-19 crisis.

It is fundamentally wrong to hold people in jobs that only exist inside furlough

Companies that did not make use of the original furlough scheme will also be able to access the new initiative.

“It is fundamentally wrong to hold people in jobs that only exist inside furlough; we need to protect jobs that provide genuine security,” Sunak said.

“Now is the time to move to next stage of our strategy, to nurture recovery and protect jobs in the difficult winter months.”

Other measures set out by Sunak include extending the existing self-employed grants on similar terms to the new jobs scheme by an additional six months, while the deadline to apply for Covid-19 loans will also be extended to the end of the year.

The payment period for Covid-19 bounceback loans can be extended from six to 10 years, while businesses that have one of these loans can apply to suspend any repayments for up to six months if they are in trouble.

Government guarantee on the Coronavirus Business Interruption Loan Scheme (CBILS) will also be extended from six to 10 years.

In addition, a new ‘pay as you grow’ option will also be available to any business that has taken out a Covid-19, while another loan scheme will be introduced in January to offer further support.

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