Chancellor Rishi Sunak has today unveiled the successor to the government’s furlough scheme, which will end as scheduled on 31 October.
The new package of coronavirus impact mitigation measures is the ‘Jobs Support Scheme’, beginning on 1 November.
This will see the government and employers covering two thirds of employees pay for the next 6 months, as long as the staff member works at least a third of their usual hours.
In the House of Commons this afternoon, Sunak detailed: “The job support scheme will support viable jobs. To make sure of that, employees must work at least a third of their normal hours and be paid for that work as normal by their employer.
“The government, together with employers, will then increase those wages, covering two thirds of the pay they have lost by reducing their working hours, and the employee will keep their job.”
However, he did not define what the government sees as a ‘viable’ job.
Sunak added: “Many businesses are operating safely and viably, but they now face uncertainty and reduced demand over the winter months. What those businesses need is support to bring people back to work and protect as many viable jobs as we can.
“The government will directly support the wages of people in work, giving businesses who face depressed demand the option of keeping employees in a job on shorter hours rather than making them redundant.”
The furlough scheme has cost the taxpayer £39.3bn so far, with nearly 3m workers (12% of the UK’s workforce) are on partial or full furlough leave, according to the Office for National Statistics.
The government will also be extending the self-employed grant on similar terms as the new jobs support scheme.
Furthermore, businesses that have borrowed money through the government’s loan scheme will be given more time to repay the money.
There is also positive news for the hospitality and tourism sector, as the VAT cut for those companies will be extended until March. The reduction from 20% to 5% VAT, which came into force on 15 July, had been due to expire on 12 January next year.