Chancellor announces Job Support Scheme to replace furlough from November

By James McAllister

- Last updated on GMT

Chancellor announces Job Support Scheme to replace furlough from November

Related tags: Job Retention Scheme, Coronavirus, Job Support Scheme, Vat cut, Government, Chancellor of the exchequer

Chancellor Rishi Sunak has announced a new wage subsidy programme that he says will 'allow firms to preserve viable jobs'.

Set to launch on 1 November following the cessation of Coronavirus Job Retention Scheme (JRS), the six-month Job Support Scheme (JSS) will see the Government continue to pay a portion of employee's wages. 

Under the new scheme employees must be able to work a minimum of 33% of their contracted monthly hours. 

For remaining hours not worked, the Government and employer will pay a third of wages each, meaning employees only able to work 33% of hours would still receive at least 77% of their pay. 

The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.

Sunak says the JSS will be open to businesses across the UK, even if they have not previously used the furlough scheme.

It is targeted, primarily, at small and medium enterprises (SMEs), although larger businesses that can demonstrate their turnover has fallen during the pandemic will also be eligible.

Elsewhere, the Chancellor confirmed that the current VAT cut to 5% for the hospitality and tourism industries will be extended from next January until the end of March.

He has also announced that the Treasury's UK-wide programme of business support loans will remain open for applications until the end of November, with the terms regarding paying back the loans increased.

SMEs who took out a Bounce Back Loan will be able to follow a 'flexible' repayment system that's been dubbed Pay as You Grow.

This provision includes extending the length of the loan from six years to 10, cutting monthly repayments by nearly half.

Interest-only periods of up to six months and payment holidays will also be available to businesses.

Businesses that borrowed under the Coronavirus Business Interruption Loan scheme (CBILs) will also be given the ability to extend the length of loans from a maximum of six years to 10 years.

The application extension will apply to CBILs; the Coronavirus Large Business Interruption Loan scheme (CLBILs); the Bounce Back Loan scheme; and the Future Fund. 

Announcing the new measures earlier today (24 September) to the House of Commons, the Chancellor 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."

The arrival of the new support package comes as hospitality businesses across the UK face up to six months of imposed restrictions - including a 10pm curfew on opening hours - aimed at reducing the spread of Covid-19.

Responding to the Chancellor,'s announcement, UKHospitality chief executive Kate Nicholls said: “The announcement of further restrictions yesterday was a significant hammer blow that will inevitably depress trading. It was crucial that the Chancellor delivered support today that specifically targeted the hospitality sector which has been hit harder than any.

“The announcement of flexible employee support is a move in the right direction, but hospitality needs more targeted efforts to support jobs. Almost 1 million people in our sector are still on furlough.

"We need Government to go further in hospitality, recognising the greater restrictions imposed upon us, and pick up the full cost of unworked hours. This would be a relatively low cost for huge reward for our workforce.

"Full support to sustain people in their jobs during what could be a pretty bleak winter for hospitality would be a great step forward.

“Looking ahead, the extension of the VAT cut was absolutely critical. UKHospitality had pushed hard for it, so it is great to see the Government taking note of our major concerns about recovery into 2021, though this must be extended further.

"The announcement of longer tax deferrals and the option of longer loan repayments should deliver some much-needed breathing room for employers.

 “Things were looking grim for our sector yesterday and we were desperately hoping for some good news. The Chancellor has given us some reason to be positive again, but we urge him to engage with the trade on specific measures to keep people in work.

"While some of these measures announced today will give businesses a future to shoot for, and hope that they can begin to rebuild, we are still not out of the woods.”

Michael Kill, CEO of the Night Time Industries Authority (NTIA), adds that more clarity over support is needed with regards to the majority of businesses in the night-time economy who do not know when, or if, they will be able to reopen their doors. 

"These businesses cannot be allowed to collapse as the diversity and creativity of the UK’s night-time economy will die with them," he said.

"We are also very concerned that the extension of business support loans will result in more painful debt for those already overburdened financially, many of whom are languishing in up to three quarters of commercial rent debt with no certainty on when this will be due. 

"More support will be needed. The majority of our sector is still unable to even open and trade.

"Night-time economy businesses have been unfairly targeted by the new 10pm curfew, which we believe has no scientific basis and will prevent businesses from rebuilding the necessary revenue to stay afloat.

"The Government must rethink this curfew and consider further sector-specific support for our industry if it wants to save Britain’s most loved cultural institutions.”

Related topics: Legislation

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