The chancellor has unveiled his “Winter Economy Plan” to protect jobs as the UK continues to battle the coronavirus pandemic.
With Britons warned the latest COVID-19 restrictions could last as long as six months – and the looming end of the furlough scheme – Rishi Sunak has set out a raft of new measures.
These are the key coronavirus announcements from his Commons address:
- A new jobs support scheme – which will replace furlough – will see the government “directly support” the wages of people in “viable” jobs working at least a third of their normal hours
- The government will top up a third of the worker’s salary that would have otherwise been lost as a result of working reduced hours – capped at £697.92 a month – which means a third will go unpaid
- It will start in November and run for six months – with all small and medium-sized businesses eligible for the scheme
- Larger firms will have to prove their profits have been affected by the COVID-19 pandemic in order to utilise it
- Businesses will not be able to issue redundancy notices to employees while taking part in this scheme
- The self-employed grant will be extended on similar terms as this new support scheme
- A “pay as you grow” scheme to allow companies more time to repay bounce back loans over a period of up to 10 years rather than six
- Those struggling to pay them back will now be able to choose to make interest-only repayments and “anyone in real trouble” can suspend repayments altogether for up to six months
- VAT will remain at 5% for hospitality and tourism until 31 March 2021 – rather than reverting back to 20% in January
- The deadline for taking out a coronavirus business interruption loan will be extended until 30 November, with the government guarantee on them extended for up to 10 years
The Institute for Fiscal Studies think tank has said the new Job Support Scheme is “significantly less generous” than the preceding furlough system.
Paul Johnson, the director of the IFS, said: “The new job support scheme represents a significant new intervention from government to support jobs through the crisis.
“But it is significantly less generous than the furlough scheme it replaces, though remarkably the chancellor provided no indication of the likely cost of the scheme.”
He added: “With employers now having to pay at least 55% of the normal wages of their employees it is clear that many jobs will be lost over the coming months.”
The hospitality and entertainment sectors have raised concerns about the new measures, due to the inability of venues like nightclubs and theatres to open.
A statement from the Music Venue Trust said: “The measures announced today do not address the need for the UK government to support different sectors of our society which are subject to different restrictions because of its own actions to control the virus.
“This is a very specific challenge to the live music industry, which is not permitted to trade by government restrictions but has not seen any sector support directly offered in this financial intervention.”